Mixed messages on troubled Scots firms' fortunes

Two pieces of research covering troubled Scottish businesses paint contrasting pictures of firms' fortunes over the past quarter and looking ahead.

Blair Nimmo, head of KPMG's UK restructuring operation. Picture: Contributed

Accountancy giant KPMG found that the total number of insolvencies continued to grow in the three-month period, showing a year-on-year jump of 3 per cent to 269 and compared to 206 in the prior quarter.

Blair Nimmo, head of restructuring for KPMG in the UK, said: “The latest insolvency statistics reflect the position immediately prior to the EU referendum when generally, businesses were adopting a ‘wait and see’ approach in a relatively stable environment.”

He added that while the impact of Brexit is yet to be seen, it “is likely to have a negative impact on future insolvency levels”.

However, rescue and recovery firm Begbies Traynor said separately that it expects that in the months after Brexit, while large capital spend will be limited further, there will be “some winners for whom the weaker pound is a bonus” such as utilities and tourism-reliant firms.

Begbies found that overall, the levels of Scottish firms experiencing “significant” distress, indicating the early signs of financial problems, have steadied in the last three months. They rose just 2 per cent year on year to 13,959, compared to a 20 per cent jump in the previous quarter.