3,000 Northern Ireland land businesses face cash problems
Thousands face cash problemsMORE than 3,000 Northern Ireland businesses still face financial difficulties despite the burgeoning economy, a recovery specialist has claimed.
Begbies Traynor said there were 3,643 firms experiencing "significant" money problems over the last three months of 2013 – up 2% on the quarter before.
The firm's Red Flag Alert, which assesses the health of United Kingdom companies, also found that the numbers of companies facing critical financial distress grew by more than one-third, from 41 to 56, over the final six months of last year.
That contrasted with a slight fall in companies with critical problems in the UK as a whole.
Companies with critical problems, according to Begbies Traynor's definition, are those facing county court judgments of over £5,000 over a three-month period, those facing winding-up petitions, or those in corporate voluntary arrangements.
The increases in troubled company numbers contrast with signs of recovery in the economy, including steady improvement in business activity across many sectors – as demonstrated by the Ulster Bank purchasing managers' index – and a stabilising housing market.
Joan Houston, a Begbies Traynor partner in Belfast, said: "While the UK has shown strong growth in certain regions, Northern Ireland's business community has continued to struggle in difficult trading conditions.
"The 37% increase in the number of firms in critical financial distress refers to 41 companies in the third quarter compared to 56 in the fourth quarter 2013.
"Those in significant distress appear to be stabilising. The longer term outlook shows a more stable decline approaching a plateau," she added.
The 2% rise in companies facing significant financial distress was in comparison with a 5% increase in London, 4% in the north east of England, 2% in Wales and 1% in Scotland.
In the UK as a whole, Christmas trading triggered falls of 24%, 22% and 7% respectively in the numbers of companies in hotels, food retailing and general retail facing acute difficulties.
Ms Houston said small to medium-sized firms in Northern Ireland in manufacturing, travel and tourism and food production had "room for optimism".
And Ric Traynor, executive chairman of Begbies Traynor Group, said the overall UK picture was improving.
"With businesses feeling more confident about their outlook for 2014, so too are customers thanks to strengthening property prices, improving job security and wage inflation," he said.
"While this positive sentiment is encouraging, we cannot overlook the fact that a large population of businesses continue to suffer from "significant" distress resulting from funding, management or accumulated debt issues.
"2014 will be a key period for these businesses to either sort out their problems, and prosper, or finally reach the end of the road."