MORE than a fifth of big businesses in Scotland are “financially stressed”, according to new research. A study by KPMG found 21% of firms with revenues in excess of £10 million are suffering financial distress.

It also suggested 3% of these companies are facing acute financial distress. However, the figures are lower than those for the rest of the UK, where 24% of businesses are in the same position of stress – with 4% facing acute financial distress.

Blair Nimmo (pictured), KPMG’s UK head of restructuring, said: “The analysis reflects our historical experience of the Scottish economy – namely that it doesn’t experience the same levels of volatility as in England.

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When we drill into the data, the population experiencing more acute financial distress in Scotland has remained flat across the last five years. In the north of England and London, for example, distress growth rates of more than 10% have been experienced.”

“However, business leaders in Scotland can’t rest on their laurels. The more disappointing results experienced elsewhere, in combination with increased signs of distress in Scotland, is concerning and businesses need to be alert to take early action to rectify issues.”

The leisure and hospitality sector is one of those with the highest proportion of stress at one in three firms while one in four consumer production companies reported the same. One in five business services and industrial manufacturing firms is showing stress. Building and construction businesses have made an improvement on the previous year, with just one in six suffering financial distress.

Alan Flower, head of KPMG’s restructuring advisory team in Scotland, said: “No doubt Brexit uncertainty has had its impact on these results. Despite recent progress on that front, until a trade deal is done the impact assessed and its operation experienced, uncertainty is going to be the new norm.”