Strong performance for Scottish pubs and restaurants continues – R3

As in January, pubs in Scotland were rated as being the least likely of any UK region to enter insolvency in the March figures, with 17 per cent being at higher than normal risk of insolvency against a UK average of 21.1 per cent.

Scottish restaurants maintained their second-lowest ranking out of the UK’s regions, at 21 per cent, just edged out by the North West of England at 20.9 per cent, and 1.5 percentage points lower than the UK average of 22.5 per cent.

The transport and haulage sector was another stand-out, with 22.7 per cent of firms at higher than normal risk of insolvency – a full 10 percentage points lower than the UK average of 32.7 per cent, and only beaten by Northern Ireland.

Taking all business sectors into account, Scottish firms had the lowest overall risk profile, with 19.9 per cent of all companies deemed at higher than normal risk, compared to 24.9 per cent in the UK as a whole.

Tim Cooper, Chair of R3 in Scotland and a partner at HBJ Gateley in Edinburgh, said: “Scottish cuisine is gaining an international reputation, while our pubs are no less renowned, so it’s great to see their financial outlook remaining strong. Whatever else is happening in the world, Scots know the benefit of a good meal out, or a drink with friends – they’re even better when combined.

“An issue to watch out for, however, is the incoming business rates changes, which will have a particular impact on pubs and restaurants. It remains to be seen whether the Scottish Government’s relief measures will do enough to cushion the impact of the rise. Businesses in the sector to need to avoid complacency and should seek advice sooner rather than later if a rates rise is causing problems.

“The transport and haulage sector is known for its volatility, so the relative stability of Scotland’s hauliers and logistics businesses is welcome. The way that consumer demand has held up since the festive season probably plays a major part in this, with the need to transport goods and products across the country, and further afield.

“Even though Scottish businesses top the tables in terms of stability, though, that’s no excuse to ignore any problems which do arise; one in five businesses is still at higher than normal risk of insolvency, after all. The good news is that getting help and advice from a professional can drastically increase a business’s chances of survival, and the earlier advice is sought, the better.”

The figures are from R3’s latest insolvency risk tracker.

The tracker is compiled using Bureau van Dijk’s ‘Fame’ database and measures companies’ balances sheets, director track records and other information to work out their likelihood of survival over the next 12 months.