Insolvency specialist says it has seen a surge in approaches from struggling businesses

The UK faces an 'epidemic' of business failures next year, with companies in the retail, motor and property sectors most at risk, a leading insolvency specialist has warned.

As the economic downturn deepens Tenon Recovery said calls for assistance from companies in the retail, restaurant, motor industry, property and leisure industries in the last two months were nearly 200% higher than the same period last year.

“We believe the symptoms we are seeing now are a precursor to a potential epidemic of insolvencies in 2009,' said Carl Jackson, head of Tenon Recovery.'It is quite usual for some non-seasonal businesses to turn off the lights in the run up to Christmas as they know they will not be able to survive in the New Year but we have never seen such a broad spread of businesses fail so early.'

The primary characteristics of a troubled business include weak equity base, low profit, losses, weak management, substantial debtors, and a high fixed cost base, according to Tenon.

It has published a financial 'health check' to help struggling companies, including advice on management information, management control and systems and processes.



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