Companies failing on the rise, insolvency data shows

The number of Australian companies hitting the wall is expected to exceed 10,000 by the end of the financial year, underpinned by the collapse of construction firms.

The Australian Securities and Investment Commission’s latest insolvency data reveals 7742 companies tumbled into external administration between July and March.

That was a 36.2 per cent increase on the prior corresponding nine-month period.

Construction companies accounted for the greatest number of firm failures, being 2142 nation-wide, followed by accommodation and food services at 1174.

The high number of collapsed construction companies has been tied to rising construction costs, demand from government stimulus, labour challenges and supply chain issues.

ASIC’s data also showed the number of restructuring (878) and court liquidation appointments (1593) skyrocketed by 294 per cent and 218 per cent, respectively.

By the end of the financial year, ASIC said it expected the number of companies to enter external administration would hit 10,000 by June 30.

ASIC said that would be a level not seen since the 2012-13 financial year.

In the first half of FY24, local firm WA Insolvency Solutions said it handled 19 creditor voluntary liquidations, 12 receiverships and five voluntary administrations.

That was alongside two small business restructures and two deeds of company arrangement. WAIS was named WA's top insolvency firm by appointment for the first half of FY24, according to Insolvency Australia.

Other stressors impacting WA businesses included cash-flow pressures, the Australian Tax Office re-focusing on its collection efforts, industry instabilities and director/shareholder disputes, according to WAIS.

The Perth frim worked on the administration of Rockingham brewery and restaurant Sound Brewing Co, which was sold to South West brewer Cheeky Money Brewing Co.

That was one of three local breweries that ran into trouble in the past six months.

Hall Chadwick administrators executed a deed of company arrangement to pull South Fremantle pub Running With Thieves out of administration with mining fleet provider Northfleet .

GTS Advisory orchestrated a deal for Perth brewery FOUND. to acquire Golden West Brewing Co, which fell into administration in February.