Sharp drop in business performance sees six firms a day go bust
UP to six companies a day were going bust in Ireland during the first three months of this year, according to new figures released yesterday.
Two sets of separate data pointed to a sharp deterioration of business performance in the period, with company information firm Vision-net indicating that 462 companies were declared insolvent in the first quarter of 2012. Of those, it says 166 were liquidated, 189 entered receivership and seven had examiners appointed.
The figures don't include Eircom's application yesterday to enter examinership in what will be the biggest such process in the history of the state. No other major examinerships were recorded in the first quarter.
Vision-net also stress-tested 31,070 companies and found that 50pc of them were deemed high risk. Just 31pc were judged to be low risk.
Separate figures from InsolvencyJournal.ie, which is published by Kavanagh Fennell, found that 431 firms went bust in Ireland during the first quarter of 2012.
It said construction firms accounted for 26.1pc of the firms it says failed in the first three months. However, it also noted that the number of failures reported in March fell 21pc compared to February.
It also said that construction, along with services, continue to be hardest hit.
Ken Fennell, of Kavanagh Fennell, said "urgent changes" in the examinership process are required.
He said: "The continuing low level of examinerships is a worrying trend as it would suggest to us that companies still consider the examinership process expensive and cumbersome."
The number of receiverships fell 22pc in March compared to February.
The least affected sector in the first quarter was the motor trade. No such firms went bust in the first three months. The trade accounted for 7pc of total insolvencies in 2011.
The director general of the Society of the Irish Motor Industry (SIMI), Alan Nolan, said he was still "fairly cautious" regarding the outlook for 2012. He predicted a fall of about 15pc to 76,000 new car sales this year.