Firms of all sizes are vulnerable to economic realities if they fail to adapt their businesses to compete, SRA executive director Richard Collins has warned.
This week London firm Manches became the second top-100 firm this year to be bought out of administration after suffering from the difficult economic climate. It was acquired by top-100 rival Penningtons on Monday in a pre-pack deal that will ensure 265 jobs are saved but creditors are left worrying what - if anything - they will be repaid.
Collins (pictured), speaking at an SRA conference in Birmingham today, said the authority had seen many firms with a lack of adequate succession planning and continuing in the assumption they would be too big to fail.
‘We’re seeing firms people always felt would have been safe but they’re exiting the market in a disorderly way in a moment of crisis,’ he said.
‘It’s even more important for firms to have robust plans about what is the future of the firm. This is an issue affecting firms in the top 100 - it’s no longer inevitable firms of a particular size will survive, the market will not let them.’
Earlier in the conference, SRA chief executive Antony Townsend defended the authority’s stance on firms in financial trouble and said a pre-pack administration was usually more favourable than intervening.
‘Let’s not underestimate the extent of the problem - some firms are in dire financial straits,’ he said. ‘Our resources are not infinite, but being able to direct our resources during times of significant financial pressure to where they’re needed most has been crucial in averting large-scale disorderly collapses.
‘What we’re seeing is firms either getting themselves back onto a firm financial footing by working with us, securing a takeover/pre-pack and interventions only as a last resort, and usually when it involves a case of dishonesty.’