We don’t talk nearly enough about the motor trade in this blog. After all, most of us have cars, albeit admittedly many have been parked on the drive for nearly a year, writes David Little, one of the Partners in our Restructuring and Rescue team.
A recent survey carried out by the Finance & Leasing Association (FLA) found that over two thirds of its members expect an increase in the number of retail motor dealership insolvencies over the next twelve months, although most (54%) anticipate this increase to be slight and 31% of respondents expected no change.
Respondents were divided on the outlook for economic conditions, with 52% expecting some improvement over the next twelve months, while 44% expected conditions to worsen.
However, the news isn’t all gloomy. The asset, consumer and motor finance industry sees opportunities for growth over the next year, despite the heightened uncertainty caused by the latest restrictions to deal with the COVID-19 pandemic.
If the latest UK-wide lockdown and the vaccine rollout are successful in bringing the COVID-19 crisis under control, most respondents expected growth over the next twelve months – almost 70% of respondents expected some increase in new business over that period, with 37% expecting new business to increase by 10% or more.
Commenting on the survey results, reported here Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “The results of the Q1 2021 survey reflect the industry’s concerns about the adverse impact of prolonged uncertainty on businesses and households.
“But the results also point to the underlying pre-crisis strength of FLA members which has helped them weather the pandemic so far. The specialist knowledge of finance providers means the industry is in an ideal position to help drive forward Government initiatives such as levelling-up and net-zero.”
The pandemic has triggered a string of company collapses since April 2020 and has left many others in a severely weakened position. Whilst most businesses only approach a restructuring during times of extreme financial difficulty, businesses can restructure at any time.
Whether the situation calls for restructuring, insolvency, or bankruptcy we are capable of acting on both domestic and international matters of all shapes and sizes. We do not work in any one individual industry sector and instead – in line with the diverse makeup of our existing clients and our own expertise – operate in a broad range of business sectors so that we can add the most value.
The Corporate and Commercial Team, as a central part of Bishop & Sewell’s multidisciplinary restructuring team, takes a commercial approach in order to rapidly maximize value for those businesses who either find themselves in financial distress or wish to get ahead of any potential problems on the horizon or generally want to amend the structure of their business to something more suitable for their particular needs.
The team also acts for and with, insolvency administrators, investors, directors, shareholders, lenders, bondholders, creditors, private equity, debt funds, pension scheme trustees and landlords.
With broad experience in corporate law and transactional practices we work together with the other restructuring, insolvency or bankruptcy disciplines in order to offer a joined up specialised toolkit able to tackle complex finance, corporate, employment, litigation and real estate matters.
These are fast-moving and uncertain times, and a timely properly planned restructure can save a company.
The above is accurate as at 12 February 2021. The information above may be subject to change during these ever-changing times.
The content of this note should not be considered legal advice and each matter should be considered on a case by case basis.