UK Financial Risk Indicators
Whether you’re a financial professional, investor, or simply someone looking to stay informed about the state of the UK economy, we have the financial risk insights you need to make informed decisions.
Below is a selection of key statistics from the Company Watch database. Explore our comprehensive financial risk solutions here.
You can also view the official Government Insolvency Statistics here.
Total number of live companies
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Any company with an H-Score® less than 25 falls into our Warning Area.
These companies are showing similar traits to companies that have failed in the past and are at serious risk of distress themselves. Not all companies in the Warning Area will go on to fail, but a high number do (around 60%).
% of companies in Warning Area by age
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% companies in Warning Area by industry
Year-on-year % change - companies in Warning Area by industry
(May 2023 vs May 2024)
Total Zombie Companies
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Zombies are companies that earn just enough money to continue operating and re-pay the interest on their debt.
With rising interest rates in 2023, it is likely that many of these zombie companies will be forced into liquidation.
WUPAs vs NOIAAs
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A winding-up petition is a legal action that can be taken against a company by one of its creditors or by the government if the company owes money.
All petitions can be found in the London Gazette. Details of the document filed at the Gazette, including Gazette Entry Date, Event Description, Appointment Date, Practitioner Company, Practitioner Name and Court can all be found on our online platform.
A notice of intention to appoint administrators is when the company files a document to the court to outline that it intends to go into administration if a solution cannot be found to its immediate financial problems.
Phoenix Company Creation Per Month
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Phoenixism is the practice of setting up multiple businesses to avoid paying debts. When a business becomes insolvent, a company director can set up a new one, transfer the old assets and continue trading. The debts are left with the old business, meaning they can be written off when the business declares bankruptcy. This can happen multiple times, allowing directors to dodge their creditors indefinitely.
Sometimes Phoenixism can help bolster the economy, and companies avoid mass layoffs. But directors can repeat this process many times, often with the intention of defrauding creditors, and you won’t always be able to spot them. Find out more about Phoenix companies here.
Interest Cover <= 1.5 (latest period)
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Interest coverage ratio is calculated by dividing a company’s earnings before interest and taxes (EBIT) by its interest expense during a given period.
If a company has a ratio below 1.5, this indicates that the company may not have enough capital to pay interest on its debts.
Companies Issuing Profit Warnings
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A profit warning is an official statement to the stock exchange from a publicly listed company that says that it will report full-year profits materially below management or market expectations.
On average, one-in-five companies delist within a year of their third warning, most due to insolvency. Making companies that issue 3 or more warnings especially vulnerable.
EY publish a quarterly profit warning report which can be found here.