• Sat. Apr 20th, 2024

North East Connected

Hopping Across The North East From Hub To Hub

Businesses in the North East’s leisure sectors are reaping the rewards of the summer heatwave and England’s unexpectedly strong showing in the World Cup.


According to the latest business stability research by insolvency and restructuring trade body R3, the North East’s pub and hotel sectors have seen the proportion of firms with a higher than normal risk of entering insolvency in the next 12 months fall in the last few weeks of bright summer sunshine.


The North East restaurant and pub sectors both have the lowest proportion of companies with a higher than normal risk of any region in the UK, while the hotel sector is in second lowest place in its list.


And while the insolvency risk facing the regional retail sector has risen marginally in the last month, it has done so at a much slower rate than at any other point in 2018, which suggests the warm weather has also encouraged more customers to get out and spend.


Overall, regional firms in eight of the 11 key industries that R3 monitors currently have a better or identical rate of business stability when compared with the national average, with the cross-sector average for all North East industries (40%) remaining slightly better than the overall national figure (41%).


On the downside, well over half (52%) of the North East’s professional services firms are now currently considered to be at higher than normal risk of insolvency, compared to a national average of 49%.


R3’s insolvency risk tracker is compiled using Bureau van Dijk’s ‘Fame’ database and measures companies’ balances sheets, director track records and other information to work out their likelihood of survival over the next 12 months.


Andrew Haslam, chair of R3 in the North East and head of specialist business advisory firm FRP Advisory LLP’s Newcastle office, says: “With the Great Exhibition of the North and the Tall Ships Race being staged in the region this year, our leisure industries would have been hoping for a summer boost, but the heatwave and England’s success in the World Cup seems to have made things even better for them.


“With the Exhibition GEN running right through the summer and the holiday season now kicking into full swing, our pub, hotel and restaurant owners will clearly be hoping to see this momentum sustained.


“The general picture for regional retailers is rather less rosy, as the number of High Street names that are continuing to struggle would clearly indicate, but even this slowdown in the rate at which the sector’s insolvency risk is rising will be welcomed.


“The trend for overall business insolvency risk remains persistently upwards, and owner/managers need to be prepared to act quickly if they identify any problems on the horizon, so they have the chance to take the steps required to address them.”