Bryan Williams: BWA Insolvency principal on company liquidations reaching a 10 year high

Company liquidations are at a 10 year high.  

Data from the Companies Office shows there were 2,500 liquidations last year – the highest since 2014.  

Company receiverships are also the highest they've been since 2012, at 186.  

BWA Insolvency's principal Bryan Williams told Ryan Bridge he doesn't think it's as bad as the Global Financial Crisis. 

He says how the geopolitical environment will change and impact New Zealanders may alter things. 

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Episode Transcript

Speaker 1 (00:00):
Company liquidations. You would have seen this. They hit a
ten year high. Two and a half thousand businesses went
under last year, seven hundred more than twenty twenty three,
and until consumer confidence burst back into the scene, it's
expected to continue. Brian Williams of BW and BWA Insolvency
is with us this morning.

Speaker 2 (00:15):
Brian, Good morning, Brian, good morning.

Speaker 1 (00:17):
Is this as bad as it looks calling at the
worst and ten year high?

Speaker 2 (00:22):
Well, I don't think it's as bad as the GFC.
I wonder whether what might change the future though, is
your conversation with your previous interviewer and how the geo
political environment will alter and how it will impact on
New Zealanders and the New Zealand economy.

Speaker 1 (00:37):
That's going to be a big determinant going forward. What
about the IID have apparently been cracking down on prosecutions
on liquidating companies who aren't paying taxes. Is that plate
had an effect?

Speaker 2 (00:50):
Definitely? I think that's one of the drivers of the
volume of the liquidations today. The IIDA appears to have
a policy of either pay or die, and if if
you can't pay, you shouldn't survive, and I think that's
really appropriate. Quite Honestly, companies have for many, many years
in some instances not met their obligations to the commissioner,

(01:13):
and they need to either pay it, make arrangements, or
they can't continue. And I think that's what we've seen
today statistically, is the idea saying, well, we've lost patients
and we're going to make that decision for you.

Speaker 1 (01:28):
It's heartbreaking in a lot of ways because for a
lot of these companies, they will be hard working, you know,
fastidious people who are doing all the right things, but
just not getting ahead. If you are on the edge
right now and you've chewed through your equity, you've chewed
through your cash, it could still be a long time,
could still be six months to a year before some
kind of spending sugar hit comes to save you.

Speaker 2 (01:49):
Right well, I don't think it's going to come quickly.
And one of the problems is the expenses that haven't
preached across the last two or three years have backing
out much of the gross profit that companies are earning.
And secondly, weather's been a shortfall of liquidity. They've borrowed
money and tear lenders have fed into that. So with

(02:11):
punitive interest rates, that's just soaking up whatever gross profit
they are going to be earning in the future, which
is again staffed by the lack of disposable income. Now
that will change as interest rates go down, but I
suspect that many people in the economy, and the economy
is the aggregate of all of those participants. Individuals will

(02:33):
consolidate their affairs and to just take a breeder and
have a coupany for a while and see what the
future may bring.

Speaker 1 (02:40):
Brian, Thank you, Brian Williams, b and bwa Insolvency. For
more from the Mic Asking Breakfast, listen live to news
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