Red Flag survey shows rise in Scottish businesses in financial distress

The number of Scottish businesses suffering significant and critical financial distress increased last year despite an improving picture across the UK as a whole.

Begbies Traynor’s latest Red Flag survey reported that 135 Scottish firms had found themselves in the most serious state of distress in the first quarter of 2014.

The figure is 6% higher than the equivalent number from the same period last year, when 127 Scottish firms were found to be at significant risk of going to the wall.

Across the UK, the report found 3,063 businesses experiencing critical problems which means a firm has entered into a company voluntary arrangement, faced a winding-up petition or had decrees against it of more than £5,000 in the most recent three-month period a reduction of 7% on the 3,283 figure from a year earlier.

Figures for the number of Scottish firms in ‘significant distress’, one stage down from critical, increased by 2% to 12,439 in the first quarter, but remained below the rate seen elsewhere across the UK.