Company administrations up 6% in 2024

Company administrations rose 6% in 2024, with 1,330 companies calling in advisors in the year, up from 1,259 in 2023, according to data from Kroll.

The numbers are significantly higher than years affected by the pandemic when there were 995 (2022), 659 (2021) and 1,068 (2020) respectively.

The sector with most administrations was manufacturing with a 20% increase year-on-year.

This was followed by last year’s highest scoring sector, construction, which was marginally down.

Historically, construction and manufacturing are typically more affected as these industries typically operate on thin margins and are also exposed to recent factors including higher energy costs, access to finance, skills and immigration challenges as well as supply chain disruption.

The sectors with the biggest increases in 2024 were among recruitment businesses which saw a 53% increase alongside media and technology companies, which increased by 50%.

Within the media and tech sector, this uptick relates to numerous challenges including declining advertising revenues across traditional media.

There was also a broader slowdown across the sector with lenders and venture capital firms becoming more risk averse towards start-ups alongside regulatory changes.

Benjamin Wiles, head of UK restructuring, said: “While we have seen a small uptick in company administrations, which do reflect distress in the market, I’d say overall 2024 was relatively calmer compared to previous years especially as the rate of inflation eased and we saw the first in cut in the Base Rate.

“While all businesses are different, we do see cycles when certain industries can have challenges following years of growth, like the recruitment sector. However, some issues can have a long tail. For example, at the start of the year we saw a high number of solvency issues facing transport and logistics companies, who continued to manage issues relating to higher fuel costs and hiring staff.”

He added: “Looking ahead to 2025, we will see more challenges for businesses with higher taxes and wage increases. We are already speaking to companies who are planning ahead. For larger corporate businesses, some of these added costs can be absorbed or investment can be delayed. However, among small and mid-sized companies, it may be tougher and I would expect to see an increase in insolvencies, especially in sectors like retail and hospitality.”