Corporate insolvencies down 14%

May 17, 2018
There were 188 corporate insolvencies in Q1 2018 according to the latest insolvency statistics published by Deloitte. When compared with Q1 2017 (219), this represents a decrease of 14% and is in line with the average rate of decrease observed over the last five years.

The 188 corporate insolvencies are broken down as follows:

  • Creditors' voluntary liquidations accounted for the majority, with 118 recorded in the period (59%). In the comparable period in 2017, creditors' voluntary liquidations accounted for 114 of the appointments recorded;
  • 54 receiverships were recorded (27%), compared with 86 in Q1 2017. This mix of insolvencies is typical of prior periods;
  • There were 13 court liquidator appointments, up six from Q1 2017. Of these 13 appointments, petitions were brought by creditors of the companies in 61% of cases, by the Revenue Commissioners in 23% of cases, and the balance by the company itself; and
  • Examinerships continue to remain at low levels with only three examinership appointments in the period. This represents just 1% of the 188 corporate insolvencies and is a marked decreased from the 12 appointments recorded in Q1 2017. This very low level of examinership take-up is consistent with prior periods.
Commenting on the findings, David Van Dessel, Partner in Restructuring Services at Deloitte, said: "Acting early is key to helping companies to recover through restructuring and I would encourage any director currently struggling to seek advice. Identifying and getting assistance from a qualified and experienced insolvency practitioner will help the overall process and the statistics show examinership is a success for the majority of companies who take this early action.

"Statistics from the USA show that one in three companies which enter an insolvency process choose a restructuring. The equivalent statistic in the UK points to a figure of one in seven. In Ireland, the number is one restructuring out of every 100 corporate insolvencies."

Corporate insolvencies in Q1 2018 by region:

  • Leinster: 123 (65% of total appointments);
  • Munster: 49 (26%);
  • Connaught: 14 (7%); and
  • Ulster: two (1%).
Corporate insolvencies in Q1 2018 – top five industries:

  • The construction industry had 42 appointments (22%). This is a 17% increase on Q1 2017, when 36 appointments were recorded;
  • The services industry recorded the second highest level of appointments with 34 (18%). This is a decrease of 55% from Q1 2017. Since 2015, the service industry has consistently recorded the most corporate insolvencies, this current period being the first since then where it is not in the top spot;
  • The third slot was again taken by the retail sector where there were 28 insolvencies, 15% of the total, unchanged from Q1 2017;
  • The manufacturing sector is fourth with 10 insolvencies, 7% of the total, and up significantly from two appointments in Q1 2017; and
  • Finally, in fifth place is the hospitality sector with 12 insolvencies in the period. Looking closer at the service industry appointments, 50% of appointments were in the area of business service provision, followed by consultancy services (2%) and banking services (1%).
Commenting on the level of construction industry appointments, Vincent Sorohan, Director of Real Estate at Deloitte, said: "While a significant portion of corporate insolvencies in the last quarter were construction industry-related, these are mainly legacy cases related to the property crash. Construction activity continues to expand at an increasing pace, particularly in the house building sector, and the real challenge facing the industry appears to be a looming skills shortage which may have knock-on effects down the line for companies. It will be interesting to monitor this particular industry in 2018 and beyond, especially in light of recent announcements such as the news in Ireland of the Sammon Group opting for examinership, the fallout from which has yet to fully hit the construction sector."