Corporate insolvencies in Q1 2019 amounted to 195, up from 188 a year earlier, according to Deloitte.

Eight out of ten companies entering an insolvency process during the period were incorporated more than five years ago.

Deloitte partner David Van Dessel (pictured) commented: “Overall, the figures suggest that the steady decrease in corporate insolvencies observed over the last number of years may be levelling out.

“The largest cohort of companies that enter a formal insolvency process are companies in the 5 to 20 years old age bracket. This may indicate that lingering debt issues and an inability to turnaround poor trading results encountered as a result of the economic crash in 2008 and subsequent years are still having an impact.

“It is also interesting to note that the 21 receiverships recorded in Q1 occurred in companies over 10 years old, further pointing to the trend of lingering legacy bank debt continuing to play a prominent role in corporate insolvencies.”

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Creditors’ voluntary liquidations (CVLs) accounted for three out of four corporate insolvencies in the quarter, while the number of court liquidations doubled year-on-year to 24.

Van Dessel added: “The persistent high incidence of insolvent liquidation, particularly when considered against the decrease in corporate receiverships, would suggest that difficult trading conditions and other company specific factors are beginning to replace legacy bank debt as the leading cause of corporate insolvency.

“Legacy bank debt remains an overhanging issue in the economy and an increase in corporate receivership appointments throug 2019 and into  2020 is anticipated, as recent acquirers of non-performing loan books commence enforcing security.

“It is worth noting that the directors of some corporate entities have taken the necessary steps to wind-up their companies post-receivership, which they are obliged to do as directors of an insolvent entity and those incidences would be included in the CVL statistic.”

van Dessel expects full year corporate insolvency figure to be around 800, which is more than double the incidence of corporate insolvency experienced before the recession of 2008.

He added that there are many options available to directors of struggling companies and it may be possible to implement a viable turnaround strategy if advices are sought in good time.

“In circumstances where this is not possible, early advice is still recommended so that an appropriate wind-up strategy can be devised and put in place to minimise the risk and costs for the company, its creditors and stakeholders,” van Dessel stated.