More than 200 Sheffield businesses have been plunged into financial trouble since June

More than 200 Sheffield businesses have been plunged into financial trouble since June, a new study has revealed.

Friday, 30th October 2020, 3:15 pm

Financial distress is increasing across Sheffield’s economy, with every industry sector experiencing a substantial rise in financial difficulties, according to the latest research from leading independent insolvency and restructuring business advisory firm Begbies Traynor.

The Red Flag Alert data reveals that 212 (6%) more Sheffield businesses were in financial trouble by the end of September than at the end of the second quarter of 2020 in June.

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Sheffield firms have been hit hard by Covid-19.

Across Yorkshire 2,000 (7%) more businesses were affected since Q2. The increase comes despite a backlog of court action preventing many county court judgments and winding up petitions being issued.

Year on year, a further 500 businesses were in distress in Sheffield, equating to a 14% increase, and affecting a total of 4,000 firms in the city. Across the UK as a whole the data showed distress increasing by 14% since Q3 2019, and 6% since Q2 this year, with 557,000 businesses now in financial difficulties.

Despite the Government’s summer Eat Out to Help Out campaign, which saw more than 100 million subsidised meals sold during August, bars and restaurants remained one of the worst hit sectors.

In Sheffield, the number of financially distressed bar and restaurant businesses leapt by 20% year on year, with an 11% rise since Q2 and 179 businesses in trouble in the sector.

The city’s hotels also saw a 14% quarter-on-quarter climb in distress.

Sheffield real estate and property services firms also continued to struggle, with a 25% year-on-year increase in distress in Q3 and a 9% quarterly increase, affecting more than 400 businesses. A further 33 property companies had become financially distressed since the end of June.

Kris Wigfield, managing partner at Begbies Traynor in Sheffield, said: “Last week’s promise by Rishi Sunak of greater financial support for businesses that are reeling from the effects of being placed in the higher Tier 2 and Tier 3 categories, as Sheffield and much of Yorkshire now has, is welcome news.

“However, there are real fears that for many businesses, particularly in the region’s hospitality industry, the funding may have come too late to save those that have suffered from the chronic lack of revenue brought about by the blanket 10pm curfew and Tier 2 ban on households mixing indoors.

“Seeking professional advice is always the best course of action for any small business that finds itself in financial trouble. There may well be strategies that, if put in place now, could help to future-proof an organisation, even in the face of the combined uncertainties of the covid pandemic and the increasingly likely prospect of the Government failing to secure a trade deal with the EU.”