THE number of businesses entering administration has risen to a 15-month high.

However, the number of business insolvencies of all kinds fell, suggesting a number have some hope of rescue.

Insolvency Service figures for February show corporate insolvencies falling 3.2 per cent month-on-month to 1,515, but still 12.6 per cent higher than in February 2020.

Of those, 109 were administrations – the highest since December 2020, when there were 150.

Garry Lee, chair of the restructuring and insolvency industry body R3’s Southern and Thames Valley region, which covers Hampshire, said: “The monthly fall in corporate insolvencies was driven by a reduction in all types of corporate insolvency process, with the exception of administrations, whose numbers increased to a 15-month high.

“This increase suggests that there are a number of insolvent businesses which have some prospect for rescue, given this is one of the main statutory purposes of the administration process.

“Wherever possible the insolvency profession in Dorset and Hampshire will work to secure the rescue of businesses in administration to help ensure better outcomes for the business, its staff and its creditors.

“However, despite the month-on month decline overall, the figures released today show corporate insolvency numbers were significantly higher than this time last year and the year before.”

As well as 109 administrations, February saw 1,329 creditors’ voluntary liquidations, 74 compulsory liquidations and three company voluntary arrangements.

The slight month-on-month drop in overall corporate insolvencies came as domestic legal restrictions were lifted under the government’s “living with Covid” plan.

Restrictions on the use of winding-up petitions are coming to an end later in March, which could see an increase in creditors turning to legal action to recover unpaid debts.

Mr Lee, an associate director in the recovery and restructuring services department at accountancy firm Smith & Williamson’s Southampton office, said: “Now is the time for directors in Dorset and Hampshire to be alert to the signs of financial distress and to take action if they show themselves.

“We know conversations about a business’ financial position are some of the hardest to have.

“However, speaking up about concerns at an early stage with a qualified and regulated advisor typically leads to a better outcome than waiting until the problem worsens.”