Worrells Solvency and Forensic Accountants has released its fourth edition of The Worrells Insolvency Report.
The Report aims to show the extent and reach of insolvency appointments, in all its forms, across Australia. By crunching the data, and adding insight to the numbers, Worrells hopes it helps to soften the perception on debt issues and the available solutions to rehabilitate financially.
Recent reports of specific industries continue to make the headlines, with the construction industry and retail trade featuring heavily. The construction industry continues to suffer losses under its traditional business model structure and sustain government scrutiny around licensing and subcontractor payment schemes.
This business reform in conjunction with independent statutory office actions like Fair Work Australia’s recent cases, along with franchising and retail groups coming under increased pressure: these market conditions will affect all business owners, large and small, and inherently the professional community who advise them.
Worrells, a national mid-tier insolvency solutions firm, affirm that the relevance of sound information and advice has never been more relevant.
Managing partner, Raj Khatri said, “The level of personal accountability and liability in today’s business landscape has never been so high. Business owners can’t afford to be ignorant of risk of external intervention.”
The Worrells Report shares analyses in corporate insolvency appointments by industries across Australia. The comparison of the two previous financial years as a percentage of total appointments shows which industries are susceptible to insolvency challenges. And is presented as an annual analysis and as a top-five industry by state/territory.
Chris Cook, Partner in Worrells Brisbane, said “Given the Worrells Report is now in its fourth edition, we can clearly observe what trends are forming and can connect possible relationships between ancillary businesses that support and service the predominant industries for Australia’s economy.”
The Worrells Report found that for the last two financial years, New South Wales, Victoria, Queensland, and Western Australia has followed the same top-five profile of ‘Other (business and personal) services’ ranking at first position; ‘Construction’ at second; ‘Accommodation and food services’ at third; ‘Retail trade’ at fourth; and finishing with at ‘Transport, postal and warehousing’ at fifth position.
Mr Cook said, “Naturally, each state/territory has its own orientation in respect to natural resources, climate for agricultural/tourism, and business persuasions. But it is interesting to see the correlations present in the data sets”.
Despite the heat felt for many years in the mining industry, in this year’s Worrells Report, ‘Mining’ dropped out of its top-five industry analysis. Whereas ‘Accommodation and food services’ has increased as an annual percentage by two percent (2017-18 against 2016-17), but year-on-year for that industry—it has experienced 21 percent more corporate insolvency appointments. A similar statistic is revealed for ‘Retail Trade’, year-on-year that industry has experienced 19 percent more corporate insolvency appointments.
“Our experience in the last 12 months is indicative of what the Australian Securities and Investments Commission’s statistics report. The enquiries and discussions we have daily with business owners and their advisors tells me that there’s more stress and pressure to come in the construction and retail industry and trading environments.”
“Times have simply changed the game, and there’s many variables to substantiate why. We share our insights in the hope that more people are proactive in speaking to us about the available solutions to rehabilitate financially.”
The Report is available for download via the Worrells website.
Worrells has 27 offices nationally and 29 partners, across Qld, NSW, ACT, Vic, SA, and WA. Worrells has been providing solvency management, insolvency administration, and forensic investigation services for over 45 years.
Partner, Worrells Brisbane