NEARLY 1,000 businesses across Worcester are in 'significant financial distress' according to a new report.

Figures provided by city firm Begbies Traynor suggest there are 912 businesses struggling, down three per cent over the last quarter of 2019.

The firm's Red Flag Data Alert for Q4, monitoring the health of UK companies, reveals that nationally there are 494,000 businesses in significant financial distress with the real estate and property support services, along with the support services, construction and retail sectors particularly badly affected.

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This is a rise of 81 per cent since 2016, and a significant number of these companies were formed after 2014, demonstrating that younger businesses are the most vulnerable to failure.

When looking at sectors in Worcester that are in financial difficulty, health & education and retail businesses are in the most distress – increasing eight per cent and two per cent respectively between Q3 and Q4 2019.

More positively, the figures also revealed that some sectors in Worcester are showing tentative signs of stability during the same time period, with the number of troubled firms in construction and support services down on the previous quarter

Mark Malone, partner at Begbies Traynor, said: "These figures clearly demonstrate the impact of this indecision, so with political certainty and a clear Brexit path, businesses in Worcester should, at last, be able to plan for 2020 with a greater sense of clarity.

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"However, the macro-economic climate is complicated, and we are seeing clear winners and losers, as evidenced by this latest Red Flag data. Currently, we do not know if the failing performance within some sectors is due to short term confidence issues, or more fundamental economic and structural issues.

“The landscape of UK business is slowly changing. In order to capture the attentions of consumers and clients, businesses need to demonstrate that they not only have a compelling product or service at the right price, but also one that has strong environmental credentials to boot."

Companies with 'significant problems' include those with minor CCJs (of less than £5k) filed against them or which have been identified by Red Flag’s proprietary credit risk scoring system, which screens companies for a sustained or marked deterioration in working capital, contingent liabilities, retained profits and net worth.