Efficient companies suffer, too

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The Independent Online
(First Edition)

WELL-RUN companies, along with those whose management weaknesses have been exposed by the tough trading conditions, are increasingly falling victim to the recession, according to a survey published yesterday, writes Roger Trapp.

The first six-monthly report by the Society of Practitioners of Insolvency said that management failure was still responsible for the largest proportion of corporate collapses, accounting for 31 per cent of all failures.

Nigel Hamilton, of Ernst & Young, the society's president, said that even efficient companies were finding it difficult to continue in the present climate, with loss of markets and cash flow problems either preventing them from saving money or using up what they had set aside.

On the Government announcement that it would reverse economic policy to aim for growth and jobs, he added: 'I find it difficult to see how we can turn the thing round as we approach winter.'