14/08/2017 - 12:57

Record administrations in June

14/08/2017 - 12:57

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Corporate administrations in Western Australia fell for the 2016-17 financial year, down by 5.2 per cent on the previous period, although a poor result for the three months to June suggests it is too early to call a recovery.

There were 960 corporate administrations in the 12 months to June. Photo: Attila Csaszar

Corporate administrations in Western Australia fell for the 2016-17 financial year, down by 5.2 per cent on the previous period, although a poor result for the three months to June suggests it is too early to call a recovery.

There were 960 corporate administrations in the 12 months to June, according to the latest data from the Australian Securities and Investments Commission.

However, 309 of those came in the June quarter, an increase of 36 per cent on the June quarter 2016.

Construction and accommodation services were among the sectors hardest hit during the quarter, with 64 construction industry administrations in WA and 29 in the accommodation sector.

HLB Mann Judd principal Kim Wallman said the 2017 financial year had the second highest number of external administrations on record.

“The June 2017 quarter is the highest ever quarter for companies entering into external administration, with May 2017 being the single largest month on record,” Mr Wallman told Business News.

That was despite a national downward trend, with Australia-wide external administrations at an eight-year low of 8,031, he said.

“We are struggling over here in the west compared to the rest of Australia,” Mr Wallman said.

“Clearly this relates to the downturn in the mining industry and the multitude of industries that supported the mining and exploration companies.”

He said a rise in the number of court voluntary liquidations indicated more directors were taking action themselves to enter external administration, rather than other creditors or the Australian Taxation Office forcing the move.

Part of that trend was the ATO’s use of director penalty notices as a way to recover assets, Mr Wallman said.

Banks are being more accommodating by assisting clients with work-outs and not making so many formal appointments, he said.

Personal insolvencies, bankruptcies and debt agreements, which apply to individuals, were up around 21 per cent (2 per cent nationally), Mr Wallman said, with many flowing from the downturn in property prices in towns such as Port Hedland, Karratha and Newman.

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