Restructuring Update Q3 2024

Overview

PwC’s latest Insolvency Barometer shows insolvencies in the Republic of Ireland are up 35% for the first nine months to end September 2024 (661). 

That’s compared with the same period in 2023 (491). And it’s an increase of 86% compared with the same period in 2022 (356).

Our latest Insolvency Barometer further shows there were 15% more insolvencies in Q3 (232) compared with Q2 (201). That’s 45% higher than the same quarter in 2023, and 73% higher than the same quarter in 2022. 

If this trend continues into Q4, total insolvencies will reach over 900 by the end of 2024. 

The annual insolvency rate has risen to 32 per 10,000 businesses, more than double the rate of 14 per 10,000 recorded in 2021. 

It’s still below the 20-year average of 51 per 10,000 businesses, however, and far below the previous peak of 109 per 10,000 businesses recorded in 2012.

Retail insolvencies spiked during Q3 of 2024

Retail insolvencies are up 77% over Q1 and Q2 this year, with the sector now accounting for one in four of all insolvencies so far in 2024.

Hospitality insolvencies hold steady

Hospitality insolvencies remained steady in the third quarter, with 31 recorded. That level was consistent with Q2 (30) and below Q1 (49).

Liquidated hospitality companies left behind €380,000 of liabilities on average 

Based on the most recent financial statements of the hospitality companies liquidated in the past 21 months, the average total liabilities left behind was just over €380,000.

Liquidations account for 84% of all insolvencies

Liquidation remains the most common form of insolvency, accounting for more than 84% of all insolvencies so far in 2024. Almost all (99%) of liquidations involved SMEs.

Insolvencies still concentrated in Dublin

Insolvencies continue to be concentrated in the east of the country. Over 53% of all insolvencies for the year so far have been recorded in Dublin (344).

Five ways to optimise your company’s cash culture

1. Make cash everyone’s business

Cash is bigger than the treasury and finance departments. They both have a key coordinating role in effectively managing cash, but it’s the operations of the business that make daily decisions that impact cash. Push cash up everyone’s agenda.

2. Cash can mean different things to different people, so make cash relevant to everyone

Having a common cash language across the organisation (operations and finance) is vital to instilling a proactive cash-conscious culture that produces:

• reliable cash forecasting;

• effective expenditure management and tactical actions;

• cash reporting and incentivisation, tailored to audiences across the organisation;

• management of cash tax and government incentives;

• centralised management of true cash availability and foreign currency cash; and

• effective management of banking and other financing facilities.

3. Forecast cash and conduct appropriately granular scenario planning

This should involve operations and finance teams, as they are essential in reflecting and understanding the real operational risks in the current volatile market.

4. Understand and share your minimum cash thresholds

This will help colleagues in the wider business manage their daily decisions and cash commitments (once the decision is made, the cash is committed).

5. Optimise supplier and customer working capital terms and relationships

This will help conserve and generate the cheapest form of cash available to you.

We are here to help you

The months and years ahead will be challenging for many Irish businesses, but we are ready to help you. Contact us today.