iscoverChanging market conditions mean more businesses are likely to face insolvency in 2015, says RSM Bird Cameron.
RSM Bird Cameron says insolvencies to rise
17 December 2014
•
4 minute read
The firm says underperforming businesses have largely escaped insolvency in 2014 but that that may change next year.
Andrew Beck, national head of insolvency and turnaround at RSM Bird Cameron said the negative expectations reflect recent growth figures that are below expectation, confidence that is low, the fact the Federal Government continues to struggle to implement its budget repair measures and the mining boom coming to an end.
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
“This could undoubtedly lead to an uplift in business distress in 2015 and beyond,” Mr Beck said.
“With interest rates remaining low, and no sign of this changing in the short term, underperforming businesses have been able to maintain commitments to their financiers. This means it is unlikely that the financiers will seek to enforce their security any time soon and these zombie companies will continue to battle on.
“Businesses that are already struggling need to move quickly to assess the viability of their current business model and take swift action to avoid ending up on the insolvency list in 2015.”
According to RSM Bird Cameron, the insolvency sector has had a quiet year with formal appointments dropping 18 per cent nationally in the first nine months of the calendar year. While the Eastern seaboard experienced a drop in formal appointments of 21.6 per cent, Western Australia saw a significant uplift in appointments in the September 2014 quarter. This is reflective of the distress that many mining and associated companies are experiencing as the mining capex program slows down.
You need to be a member to post comments. Become a member for free today!
