Scottish company insolvencies up 46% in six months

The number of insolvencies between January and June is up from 479 in the previous six months.

The number of companies in Scotland declared insolvent has risen by 46% in six months, according to new analysis.

KPMG said economic volatility is behind the trend, with Brexit creating uncertainty for businesses.

The professional services firm advised businesses to plan for worst-case scenarios and be fiscally cautious.

It said there were 698 corporate insolvency appointments between January and June, up from 479 in the previous six months.

Of the 698 cases, the vast majority (661) involved a company liquidation, while 37 were administration and receivership appointments.

The number of insolvencies in the quarter ending 30 June is similar to that of the same period the previous year.

'Climate of uncertainty'

Blair Nimmo, KPMG head of restructuring, said: "While there is clearly a trend towards an increase in corporate insolvencies, there are some signs of resilience.

"The last quarter has remained far more static and a number of industries are taking proactive measures to put themselves on a more stable financial footing, including retailers, hoping corporate voluntary arrangement proposals could head off the prospect of administration.

"The ongoing Brexit discussions and change of Prime Minister and Cabinet have undoubtedly create a climate of uncertainty but there are wider challenges at play, creating a toxic mix of issues for businesses going through a period of distress."

He added: "The best approach for any business in Scotland right now is to maintain a fiscally cautious approach, ensuring you maximise reserves, proactively and regularly review contingency plans and - ultimately - plan for any worst case scenarios.

"A number of challenges could be on the horizon, but with a resilient, focused approach, including taking appropriate advice at an early stage, Scotland's business community can continue to grow sustainably in the long-term."