London businesses experienced the highest number of critical problems in the first quarter of this year, outpacing the rest of the UK, according to new figures.
New data from Begbies Traynor Group has revealed a surge of 86.2% among London-based companies facing critical problems in the first three months of 2006 compared to the same period last year.
Some 2,294 businesses in the capital made the firm’s critical list, up from 1,232 in Q1 2005, the most dramatic rise in the whole of the country.
Across the UK there was a 9.96% increase in critically troubled companies, rising from 11,492 in the last three months of 2005 to 12,637 during Q1 2006, accounting for a monthly average of 4,212.
The capital’s retail firms increased their share of the total from 1% to 7% of all companies facing critical problems, according to the report.
Some sectors, however, managed to better their health. IT and manufacturing companies in London recorded a 1% decrease in their share of the total.
“Being on the critical list doesn’t necessarily mean these companies are doomed to fail,” said Nick Hood, senior London partner at Begbies Traynor. “Many companies can be turned around provided their directors take remedial action, and sooner not later.
“Sadly, it’s all too common with most companies that end up in administration or receivership for the directors’ inherent optimism to have made them behave a little naively and simply hoped that their problems would go away.”
