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Whilst barely a fortnight goes by when a well-known Australian company doesn't bite the bullet to stay afloat these days, recent statistics revealed by the corporate regulator paint a grim picture of the situation with a 36 per cent spike in the number of businesses that entered voluntary administration in the nine months to 31 March this year.
The Australian Securities and Investments Commission (ASIC) reports that during this period 7,742 companies entered external administration, which is in excess of 2,000 more than in the nine months to 31 March 2023.
Out of these external administrations, construction (2,142), and accommodation and food services industries (1,174) represented the greatest number of company failures, accounting for nearly 27.7 per cent and 15.2 per cent respectively.
The increase was greater still for restructuring (878) and court liquidation appointments (1,593), rising by 294.6 per cent and 218.8 per cent respectively.
ASIC forecasts that with only one quarter remaining this financial year, it’s expected that for the full 12 months the number of companies entering external administration will be greater than 10,000 - a level not seen since FY13.
However, it must also be noted that the number of registered companies in Australia over the past decade has risen from 2 million to 3.3 million, so the ratio of companies entering external administration compared to the number of registered companies is still below FY13 levels.
Recent high-profile administration appointments include Black Hops Brewing, Marquee Retail Group, LVX Global, Godfreys, Redback Technologies, Euclideon, St Hilliers Contracting, and Halo Food Co.
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