The number of company voluntary arrangements (CVAs) so far this year already exceeds the total for last year as some insolvency experts say they have seen their “highest ever” number of CVA enquiries.
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Data from the British Property Federation (BPF) reveals that there have been 16 CVAs so far this year compared with 13 for the whole of last year, the first year the BPF started recording the number of CVAs.
A quarterly CVA breakdown shared exclusively with Property Week shows there was one CVA in the first quarter and six in the second quarter and that there have been nine so far in the third quarter. By contrast, there were two CVAs in Q1 2019, five in Q2, three in Q3 and three in Q4.
If the number continued growing at the current rate, it could top 24 by the end of the year, almost twice the number seen last year.
Melanie Leech, chief executive of the BPF, said: “The change process retail is going through will continue. And if you layer on top of that the impact of coronavirus, you can only see the number of CVAs increasing throughout the rest of the year.”
The findings come as advisers report a sharp increase in CVA enquiries. Katie James, head of business support and insolvency at Blake Morgan, said she had been asked to advise on four potential CVAs in the past six weeks alone.
“We are seeing more enquires for CVAs than I have ever seen and I think that’s only going to continue,” she said.
Blair Nimmo, UK head of restructuring at KPMG, predicted Q4 2020 could be “even busier” for CVAs than Q3. “You’ve seen an acceleration of CVAs and I would expect that to continue,” he said.
Nimmo added he did not believe CVAs were being misused. “We’re not choosing CVAs because they suit us. We’re choosing CVAs because we think they’re the best tool for the company and its stakeholders relative to what you might get in an administration.”