OVER SEVEN COMPANIES went out of business each day in February, according to a new report from business and credit risk analyst Vision-net. Meanwhile, 9 per cent fewer start-ups were launched last month than in February 2011.
Between 1 and 27 February, 207 companies collapsed – a 16 per cent increase on the same period of last year.
Of those 207 companies, almost half (49 per cent) entered receivership, another 49 per cent were liquidated, and an examiner was appointed to the rest of the companies. The number of companies put into receivership is up 120 per cent on February 2011.
Vision-net also says that of the 13,765 companies it stress-tested last month, over half (53 per cent) were considered high-risk and in danger of collapse.
Despite recent figures from the CSO which show an increase in overseas visitors to Ireland last year, Vision-net says that the hospitality sector continues to struggle in the current economic climate and that three out of five hotels and restaurants are in danger of going out of business.
The company also says that 2,363 business names were registered in February – down 9 per cent on last year.
Of those start-ups, one-fifth are professional services, making that the most popular sector for start-ups. New wholesale and retail companies accounted for 17 per cent, while one in ten of the start-ups is in the social and personal services sector. Eight per cent of the new companies are in health and social work.
Vision-net’s managing director Christine Cullen says that February’s figures show that despite recent major job announcements and buoyancy in the export and tourism sectors, the domestic economy remains vulnerable. Credit availability remains a serious concern for business viability, she warned, saying that the “rate of business failure remains alarmingly high as companies struggle to access credit and consumer demand remains weak.”
‘Our research has shown that the biggest cause of business failure is poor cash flow, meaning that businesses are not running out of customers but rather out of money.
Throughout February, 326 commercial and consumer judgments were registered which totalled €20.8 million, though consumer judgments accounted for the bulk of that amount (€18.9 million).
The Revenue Commissioners succeeded in 77 cases it took against consumers, with recorded judgments reaching almost €3.3 million. Meanwhile, banks were awarded 16 judgments against consumers, valued at over €13 million.