UK Company Liquidation Statistics - Indices for predicting Bankruptcies and Liquidations


Report Date: 21/05/2024



COMPANY STATUS


There are about 5 million registered companies in the UK. Of which 4.9 million are active and 100 thousand are in administrations or due to be liquidated. "Active" companies include "dormant" companies of which there are about 600 thousand.

The table below shows the breakdown of companies on the Companies House register by status (active, administration, in liquidation etc) as at 01-Apr-2023 and how many of those remain on the register a year later. Calculating the ratio of companies that came off the register give the "Liquidation Ratio".

Not suprisingly, companies that are in administration or in the process of being liquidated have very high (~99%) Liquidation Rates. Interestingly companies that are Active but have received a "Proposal to Strike Off" from Companies House have a relatively high 12 month Liquidation Rate at about 60%. Companies classified as "Active" have a 12 month liquidation rate close to 10%, but this varies over time.

Number of Companies by Status


Status on 01-Apr-2023 Number of Companies on register on 01-Apr-2023
A
Number of same Companies still on register on 01-Apr-2024
(any status)
B
Number of Companies that liquidated
A-B
12 month Liquidation Rate
(A-B)/A
Active 4,892,314 4,408,738 483,576 9.88%
Active - Proposal to Strike off 314,987 141,406 173,581 55.11%
Liquidation 106,245 50 106,195 99.95%
In Administration 2,608 33 2,575 98.73%
Live but Receiver Manager on at least on 1,409 173 1,236 87.72%
Voluntary Arrangement 561 462 99 17.65%
In Administration/Administrative Receive 272 2 270 99.26%
RECEIVERSHIP 191 4 187 97.91%
ADMINISTRATIVE RECEIVER 108 1 107 99.07%
VOLUNTARY ARRANGEMENT / ADMINISTRATIVE R 1 1 0 0.00%
TOTAL 5,318,696 4,550,870 767,826 14.44%


OVER TIME



Liquidation rates for Active companies vary over time. The variance over time is particularly pronounced when looking at shorter timeframes. As can be seen in the chart below, the 3 month liquidation rate averages close to 5%, but for much of the year it is closer to 1%. Note: "Active - proposal to strike off" companies are not include in "Active".



PROGRESSION INTO THE FUTURE


Obviously, the longer the timeframe, the higher the Liquidation rate. The table below shows liquidation for different timeframes for active companies.



COMPANY AGE


Company age is somehwat correlated to liquidation rates. Companies less than 25 years old have higher liquidation rates than older companies (although companies less than 2 years old of very low short term liquidation rates).


Note: The age of incorporation is not known for about 4% of companies and these have very high Liquidation Rates, which is why the curves in the graph above appear lower than expected.



COMPANY TYPE


Liquidation rates vary significantly for types of company. For example, a PLC (Public Limited Copmany) has roughly have the liquidation rate as a Private Limitred Company.





CATEGORY OF ACCOUNTS FILED


Liquidation rates also vary by the category of accounts that companies file. Companies that file no accounts have a 12 month liquidation rate about 7 times greater than companies who file full accounts.




Some industries fare better than others. The table below shows 12 month liquidation rates for the main industry sectors.



INDUSTRY SECTOR


Some industries are inherently less risky that others. In the table below we can see how liquidation rates vary by industry sector.

12 month Liquidation Rates of ACTIVE companies by Industry Sector

SIC Label Companies 12 month Liquidation Rate
Warehousing and support activities for transportation 31,559 18.2%
Manufacture of coke and refined petroleum products 332 17.5%
Mining of coal and lignite 140 17.1%
Postal and courier activities 12,362 16.5%
Retail trade, except of motor vehicles and motorcycles 327,224 16.3%
Public administration and defence; compulsory social security 7,830 15.2%
Activities of households as employers of domestic personnel 988 14.9%
Manufacture of wearing apparel 8,941 14.0%
Wholesale trade, except of motor vehicles and motorcycles 153,617 13.8%
Land transport and transport via pipelines 96,649 13.7%
Repair of computers and personal and household goods 7,213 13.7%
Gambling and betting activities 1,876 13.5%
Services to buildings and landscape activities 53,677 13.4%
Manufacture of motor vehicles, trailers and semi-trailers 4,716 13.4%
Manufacture of food products 20,030 13.1%
Food and beverage service activities 176,449 13.1%
Information service activities 34,590 12.8%
Security and investigation activities 18,513 12.7%
Manufacture of leather and related products 1,495 12.4%
Manufacture of tobacco products 171 12.3%
Manufacture of other transport equipment 3,534 12.1%
Advertising and market research 34,521 12.1%
Mining of metal ores 517 11.8%
Manufacture of textiles 6,852 11.6%
Civil engineering 29,469 11.4%
Manufacture of chemicals and chemical products 6,203 11.4%
Waste collection, treatment and disposal activities; materials recovery 9,743 11.0%
Other personal service activities 192,015 10.7%
Publishing activities 34,944 10.6%
Wholesale and retail trade and repair of motor vehicles and motorcycles 85,221 10.6%
Computer programming, consultancy and related activities 238,954 10.6%
Employment activities 43,918 10.5%
Printing and reproduction of recorded media 12,621 10.3%
Mining support service activities 4,525 10.2%
Architectural and engineering activities; technical testing and analysis 78,675 10.2%
Activities auxiliary to financial services and insurance activities 26,390 10.1%
Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting ma 9,036 10.0%
Residential care activities 23,235 9.7%
Travel agency, tour operator and other reservation service and related activities 16,155 9.6%
Manufacture of computer, electronic and optical products 8,149 9.5%
Manufacture of beverages 6,376 9.4%
Programming and broadcasting activities 4,832 9.3%
Telecommunications 17,526 9.3%
Manufacture of furniture 8,927 9.2%
Rental and leasing activities 20,648 9.2%
Activities of head offices; management consultancy activities 245,578 9.2%
Air transport 3,357 9.1%
Other manufacturing 29,228 9.0%
Office administrative, office support and other business support activities 245,128 9.0%
Manufacture of paper and paper products 2,893 8.9%
Water collection, treatment and supply 1,675 8.9%
Education 85,373 8.9%
Manufacture of other non-metallic mineral products 4,487 8.7%
Activities of extraterritorial organisations and bodies 139,060 8.5%
Construction of buildings 188,658 8.4%
Specialised construction activities 254,818 8.4%
Veterinary activities 5,382 8.3%
Other professional, scientific and technical activities 178,182 8.3%
Repair and installation of machinery and equipment 28,983 8.3%
Remediation activities and other waste management services. 2,841 8.2%
Motion picture, video and television programme production, sound recording and music publishing activities 62,336 8.2%
Manufacture of basic metals 2,558 8.1%
Sports activities and amusement and recreation activities 57,920 8.0%
Scientific research and development 10,581 8.0%
Creative, arts and entertainment activities 48,808 8.0%
Social work activities without accommodation 23,566 7.9%
Manufacture of basic pharmaceutical products and pharmaceutical preparations 1,711 7.7%
Sewerage 1,003 7.4%
Financial service activities, except insurance and pension funding 128,740 7.2%
Other mining and quarrying 1,999 7.2%
Extraction of crude petroleum and natural gas 2,070 7.1%
Manufacture of electrical equipment 5,740 6.9%
Human health activities 132,573 6.8%
Water transport 3,668 6.6%
Manufacture of fabricated metal products, except machinery and equipment 20,581 6.5%
Manufacture of rubber and plastic products 5,809 6.4%
Accommodation 36,719 6.4%
Fishing and aquaculture 3,839 6.3%
Activities of membership organisations 20,389 6.1%
Legal and accounting activities 74,575 6.1%
Electricity, gas, steam and air conditioning supply 14,878 5.8%
Crop and animal production, hunting and related service activities 29,663 5.8%
Manufacture of machinery and equipment n.e.c. 9,223 5.7%
Forestry and logging 4,524 5.4%
Real estate activities 394,588 5.0%
Libraries, archives, museums and other cultural activities 2,839 5.0%
Insurance, reinsurance and pension funding, except compulsory social security 7,652 3.9%
Undifferentiated goods- and services-producing activities of private households for own use 106,722 2.1%


FINANCIAL PERFORMANCE


It is interesting to look at how liquidation rates vary relative to financial performance. For financial performance we look at 3 main measures and whether they are negative or positive: A company that is negative on all three measures is in a poor financial position and is liquely to have a high probability of liquidating in the near future. Many companies do not report these all these figures especially net profits, but we also consider "no data" as an attribute. Nearly all non-dormant companies report Net Assets, but relatively few report net profit.

12 month Liquidation Rates vs Financial Performance

Net Assets Retained Earnings Net Profit Companies 12 month Liquidation Rate
no data Negative Positive 1,095 17.3%
no data Negative Negative 1,430 16.9%
no data Negative no data 50,815 13.7%
no data no data Negative 23,500 12.2%
no data no data no data 1,340,871 8.8%
no data no data Positive 40,664 8.5%
Positive no data Negative 136,245 8.4%
Negative no data no data 4,741,270 7.1%
Positive no data no data 17,862,077 6.9%
Negative Negative no data 3,284,722 6.1%
Negative no data Negative 112,772 6.1%
no data Positive Negative 554 6.0%
Negative Negative Negative 208,522 5.2%
Positive no data Positive 316,585 5.2%
Positive Positive Negative 141,062 4.8%
Negative Positive no data 8,442 4.7%
Negative no data Positive 40,753 4.2%
Positive Negative no data 392,162 4.1%
Negative Negative Positive 77,238 3.9%
no data Positive no data 17,708 3.4%
Positive Positive no data 9,144,656 3.4%
Negative Positive Negative 620 3.1%
Positive Negative Negative 47,068 3.0%
no data Positive Positive 3,005 2.5%
Positive Positive Positive 858,136 2.4%
Positive Negative Positive 27,204 2.1%
Negative Positive Positive 1,284 1.2%
TOTAL 38,880,460 5.9%




Note: the data on this page is updated every month.
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