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Uncertain year ahead as business confidence continues to fall

Tuesday, November 23rd, 2010

UK businesses have lowered expectations for 2011 as business confidence weakens according to the latest UK Business Confidence Monitor (BCM). This suggests that economic growth next year will be slower than forecast with companies reluctant to invest and back the recovery.

Key findings for Q4 2010 include:-

• The Business Confidence Index (BCM) has fallen since Q3 2010 by nearly 10 points. It fell from +21.5 to +11.9 with the pace of decline accelerating

• The percentage of businesses less confident about the coming 12 months has risen from 19% in Q3 to 24% this quarter

• Expected turnover growth over the next year has declined from 4.9% last quarter to 3.5% as firms become more realistic about economic conditions

• Confidence in the retail and wholesale, manufacturing and engineering, and property sectors has fallen significantly

Financial indicators improve though forecasts weaken

There is continued improvement in companies financial results with business turnover, profit and exports all increasing this quarter. Despite this, expectations for future growth have been revised as companies become more realistic about 2011. Expected turnover growth over the next 12 months declined from 4.9% in Q3 2010 to 3.5% in Q4. Forecast gross profit growth for the year ahead has also fallen from 4.4% to 3.3%.

Confidence falls in most sectors

The BCM Confidence Index fell sharply in most industry sectors this quarter. Confidence in the Manufacturing and Engineering sector, which saw growth earlier in the year attributed to the inventory cycle, fell from +34.6 last quarter to +16.5 this quarter. The Property sector CI fell from +25.0 in Q3 to +8.3 as the housing market weakens. Retail and Wholesale is the least confidence sector with a CI of +1.7 compared to +23.2 the same time last year. With the increase in VAT in January many retailers will be hoping for a good Christmas.

Customer demand a bigger problem

Combined with lower confidence, 44% of businesses report customer demand is a greater challenge than 12 months ago, up from 37% in Q3 2010. Sectors where customer demand gives particular cause for concern this quarter are Manufacturing & Engineering and Property and Construction, as well as Banking, Finance & Insurance. The challenge of customer demand reflects the softening in the economy.

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clicking here.

Proud supporters of BBC Children in Need

Friday, November 19th, 2010

CBC International has today made a donation to ‘BBC Children in Need, the annual British charity appeal organised by the BBC.

Each year since 1980, the BBC has set aside one evening of programming to show events aimed at raising money exclusively destined for charities working with children in the UK,  it has raised over £500 million to date.

In 2009, the last completed event, the charity raised over £20 million on the broadcast evening and they will no doubt look to better that this year.

The money contributed to Children in Need is distributed to organisations supporting children in the UK aged 18 and under who have mental, physical or sensory disabilities; behavioural or psychological disorders; are living in poverty or situations of deprivation; or suffering through distress, sex abuse or neglect.

The show will be broadcast this evening (Friday 19 November 2010) with this years theme and slogan being ‘Show Your Spots, Let’s Raise Lots!

Commenting on our donation, Managing Director, Roy Caligari said, “We are pleased to be supporting BBC Children in Need this year, as we consider it to be a very worthwhile charity.  Their hard work over the years has helped a number of children through a wide range of difficult circumstances and we hope this will continue in the future.”

Please show your support for BBC Children in Need and make a donation today.  Donations can be placed online or by various methods outlined on their dedicated website.

(Registered charity England & Wales no. 802052 and Scotland no. SC039557)

Mortgage shortage still affecting housing market, says Persimmon

Tuesday, November 16th, 2010

Lack of mortgage availability for first time buyers is holding back the housing market, said housebuilder Persimmon today.

In a trading update covering the period from July 1 to November 15, it warned “further recovery in industry output and sales will be dependent upon an increase in the supply of mortgage products on appropriate terms”.

However, the firm, which has two developments within the region at Sefton and Ellesmere Port, said it was currently trading in line with expectations.

Sales volumes remain stable and prices and margins are holding firm, but the normal autumn increase in visitor levels and reservations failed to materialise.

The group says it expects to increase sales revenues by about 10% this year and complete the sales of 9,400 homes, compared with 8,976 in 2009.

It is also generating good cash levels and expects total borrowings to be lower than £80m at the year end, which is ahead of previous forecasts.

Today’s update also confirmed that the group is fully sold up for the current year and has more than £460m of sales already reserved beyond 2010, compared with £500m in 2009.

So far, in the second half of its financial year, the group has acquired about 4,000 new housing plots on 41 sites.

The update said: “We expect our performance for 2010 to demonstrate the progress we have made in pursuing our strategy of operating margin improvement and growth in operating cash generation.

“With the strength of our balance sheet and high quality land holdings we will continue to successfully develop our business in these challenging markets.”

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of LDP Business News and the full original article can be found by clicking here.

UK200Group comment on inflation figures

Tuesday, November 16th, 2010

Members of the UK200Group of independent accountancy and lawyer firms have commented on today’s news that inflation in the UK has remained above target after increasing to 3.2 per cent in October.

Jonathan Russell, partner, ReesRussell and vice-president, UK200Group:

“The increase in the rate of inflation is a matter for concern for both the Government and the Bank of England. The Bank of England’s mechanism to control inflation works on a monetary basis, which is essentially about controlling the supply of money. This can be done either by restricting the money in circulation, quantitative easing, or by interest rates.

“The problem at the moment is that the underlying inflation is not a demand-driven inflation so restricting monetary supply would not lessen demand and hence prices. This means the armoury of the Bank of England is pretty ineffectual and any restriction in the money supply would probably have a negative impact on the fragile recovery without impacting on inflation.

“In essence, therefore, the Bank of England can do little but wait and see and hope that their longer-term prediction of a gradual rise in inflation followed by a steady reduction in 12 to 18 months’ time is correct.”

www.twitter.com/uk200group

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clicking here.

Dealer motor finance market share grows in September

Tuesday, November 16th, 2010

Car dealers enjoyed a good September, as figures from the Finance & Leasing Association showed an increase in new and used car finance compared to September last year. The number of new cars sold on finance to consumers was up by 5% and the number of used cars by 6%, despite a fall of almost 19% in the total number of private new car sales in September.1

And, consequently, the percentage of new cars sold to consumers on dealer finance over the last 12 months rose by more than two percentage points, from 47.5% in August to 49.6% in September, showing that dealer finance remains a popular choice for consumers.

However, despite the welcome growth in the consumer market, business usage of financing for cars dropped by 17% for new cars, and by 4% for used cars in September.

Commenting on September’s motor finance figures, Paul Harrison, Head of Motor Finance, said:

“The rise in the use of motor finance is great news for dealers, coming as it does in such an uncertain and volatile economic climate. Over the year we have seen ups and downs in the number of people using dealer finance for both new and used cars, so it is encouraging to see a strong performance in the important month of September.

“But we still have some concern about the business cars sector, where new loans have fallen. Businesses are still cautious about investment and this is likely to continue while the economic effects of last month’s Comprehensive Spending Review remain unclear.”

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clicking here.

Time to Pay squeeze to hit vulnerable businesses hardest in 2011

Monday, November 15th, 2010

New research which looks at the challenges facing businesses in 2011 found that almost a third (29%) of insolvency experts think that a squeeze of the Time to Pay facility would be the most harmful potential development. The impact of public sector cutbacks and a modest rise in interest rates were joint second, with 23 percent each.

R3 President, Steven Law commented:

“Our members have seen how invaluable the Time to Pay scheme has been to businesses. We believe that it is important that it remains available as a breathing space for viable businesses, but that it is not used as an alternative credit facility for ‘zombie companies’.”

The three industries that insolvency experts believe face the biggest threat from the public sector cutbacks are health and social work (12%); wholesale and retail (16%); and construction. Almost half of R3’s members (48%) believe that the construction industry will bear the brunt of the impending public sector cuts, as we see a considerable reduction in spending on education and social housing. There are fears that the expected increase in private sector contracts will not be enough to make up the shortfall leaving the industry in a vulnerable position. Given that the construction sector accounts for the greatest number of trading-related bankruptcies, there is a worry that a large number of failures in this industry will lead to an increase in related personal insolvencies.

Steven Law continued:

“Previous R3 research found that one third of small businesses are reliant on public sector contracts so our members expect the fall-out of the public sector cuts to have a significant impact on the private sector in 2011. In view of upcoming cutbacks, businesses reliant on public sector contracts should attempt to diversify their income stream towards a broader customer base.”

The research also looked at how planned policy changes would impact on businesses and found that half of insolvency practitioners believe that the impending VAT increase is the biggest challenge facing businesses during 2011.

Steven Law continued:

“The rise in VAT will make spending more expensive, serving a further blow to struggling businesses, such as retailers and restaurateurs, that rely on consumer spend. As a percentage, the hotel and restaurant industry suffered most during the recession and many vulnerable businesses will find themselves either shouldering the extra tax burden or suffering a further fall in consumer demand by passing the tax on. In fact, our members expect the retail sector will witness the greatest number of insolvencies next year.”

R3 is the trade body for Insolvency Professionals, and represents 97% of the UK’s Insolvency Practitioners.

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clicking here.

Credit Control Hints & Tips for the Retail Motor Industry

Friday, November 12th, 2010

An article written for the Retail Motor Industry Federation (“RMI”) Magazine by Stephen Rose, Client Services Manager of CBC International

Credit Control Hints & Tips for the Retail Motor Industry

In the current climate, every business wants as much trade as possible and as we all know, ‘cash is king’ however, this should not come at the cost of a robust credit control procedure.  When a business concentrates on sales the credit control can often be the first thing that gets put to one side.  How many times have you heard the phrase, “I’ll do it later”? or “that can wait, I’ve got more important things to do”!….

Without a good credit control procedure you will often find that you have an increased number of bad debts and therefore the extra work that you’re doing can often just go to pay towards the debts that people have left behind. That’s why we’re here to help! As RMI understands that members want to concentrate on making money, they enlisted the support of CBC International (operating as RMI Debt Recovery Services), a specialist credit management firm based in Liverpool to assist members with the collection of their accounts.  CBC is here to help members if necessary however, RMI feel that it is important that members also help themselves.  CBC has kindly provided some helpful hints & tips in order for you to improve your internal procedures:

  • When the owner approaches you to fix their vehicle, ensure that you collect as much data from them as possible. (e.g. full name, telephone numbers, address, email address etc) This short exercise can then assist you to contact the owner by all available means and ultimately help recover accounts should those owners not pay you within the agreed time period.
  • Ensure that you have a well drafted terms of business (“TOB”).  Should you have to take any legal action in the future, the TOB is what the court will rely upon to assess on what basis the work was carried out and what was agreed between both parties.  It could be possible to recover collection charges from the debtor if a provision is contained in your TOB, we can advise on this.  Make sure that you specify your terms of payment, such as 30 days from invoice date.  This should also be stated on invoices.  If possible, get the owner to sign you TOB at the time they bring the vehicle in.
  • Do not extend large amounts of credit unless you have conducted a credit report on the owner. If the owner is an individual they would have to give you authority to conduct a report however, this could be a clause that was inserted in the TOB in order for you to be fully satisfied that they have the ability to pay a debt.
  • Ensure that an owner inspects the vehicle prior to leaving the garage so that you can minimise the risk of a dispute arising relating to the work that you have carried out.

We hope that you will find these tips useful and you can apply them to your business however, if you wish to discuss any aspects of your credit control procedure or you would like assistance recovering accounts, please call CBC International on 0151 515 3014,  email them (enquiries@cbc-international.co.uk) or visit their website (www.cbc-international.co.uk) and they will be happy to provide your business with the support that being an RMI member guarantees.

This article featured in the September/October edition of the RMI Magazine and is very much applicable for not only members of the RMI but everyone in the Retail Motor Industry.  If you would like information on joining the RMI, please visit their website – http://www.rmif.co.uk/index.php?op=page&id=7

Alternatively, if you would like to discuss any service that is offered by CBC, please do not hesitate in contacting us as per the contact details above.

Vacation Membership Debt Recovery (Update)

Friday, November 12th, 2010

November 2010

We have recently been in discussions with a worldwide vacations club with regards to assisting them with collections through their office in Thailand.  We hope this could be the beginning of a long standing business relationship and we are confident in producing good quality results for this client.

If you would like to discuss how CBC International can help your firm, or you would like to discuss any aspects of our services, please contact us by telephone on +44 151 515 3014 or email us and we will be happy to discuss any requirements you may have.

October 2010

We have recently been instructed by a professional property management company in Cyprus to recover their outstanding maintenance charges from UK owners.

We are also in discussions with other resorts throughout Europe who wish to utilise our expertise in this field.

August 2010

This month, we have received a number of new instructions from a large tourist complex based in the Canary Islands.  Instructions have been received from this firm for several years and we are pleased that our proven track record in recovering their accounts has resulted in us being instructed again.

June 2010

Since our blog post in November 2009, we have secured work from another two large Vacation Membership organisations who are based in Malaga & Tenerife respectively.

We now provide our services to a number of main Vacation Membership resorts throughout Europe and we are looking to approach further operators within the industry to discuss our services in 2010 and beyond.  We now have an in depth knowledge of the industry enabling us to resolve a number of issues and ultimately recover more outstanding fees for our clients.

November 2009

CBC International has been the appointed Debt Recovery specialists for a large tourist complex in the Canary Islands since 2006.  We are pleased to announce that as of today, we have been appointed in a similar capacity by one of Europe’s leading Vacation Membership companies.

Stephen Rose, Client Services Manager of CBC International said, “I am pleased that CBC’s reputation has attracted another large client within this particular industry.  I have no doubt we will provide them with an excellent service and we look forward to a long standing business relationship.”

Merseyside councils strike match funding deal to secure £30m of European cash

Friday, November 12th, 2010

Merseyside will get its hands on £30m of European funding after local councils agreed to provide match funding.

There had been fears that Merseyside could miss out on its share of Joint European Support for Sustainable Investment in City Areas (JESSICA) funding, which is designed to fund urban redevelopment projects that cannot secure funding from recession-hit banks.

But the match funding agreement means the region can draw down £30m from Europe.

A private-sector consortium led by Igloo Regeneration has now been named as the preferred bidder to establish the fund in Merseyside.

Wirral Council leader Cllr Jeff Green said: “We will seek to use the region’s assets in a way that maximises regeneration and bridges the financial gaps that exist post credit crunch thus enabling developers to bring employment and wealth creation to the entire region.”

Consortium representative Iain Jenkinson said: “We intend to start inviting proposals for investments shortly and are working towards the Merseyside Fund being up and running in the New Year”.

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of LDP Business News and the full original article can be found by clicking here.

CVA's fall in the third quarter

Friday, November 12th, 2010

Overall the number of company rescues through the company voluntary arrangement (CVA) mechanism fell during the third quarter of this year versus 2009. Indeed Q3 saw CVA’s in a massive 32% fall on Q2 of 2010. After a record high level of rescues using CVA’s in the first half of this year, the number of CVA rescues has fallen again, so what might be behind these changes?

Just as one swallow doesn’t make a summer one quarter’s insolvency statistics are not to be taken too seriously either, but the trend across all types of insolvency was a year on year AND a quarter on quarter fall in Q3. Has the worst of the recession gone? Will the number of corporate insolvencies continue to fall? Time will tell.

Back to those CVA’s numbers, which are something we study carefully at KSA. Breaking down the numbers – the manufacturing sector saw only 22 CVA’s in the period versus 32 in Q2. This is a fall of 31%, we suspect that manufacturing has bounced back in the last 9 months after manufacturers and OEMS’ began restocking and the mini boom for the automotive sector. Perhaps surprisingly even the construction sector, which has seen two high profile administrations in Connaught plc and Rok plc, saw a fall of 38% quarter on quarter.

Transport saw the only real rise in CVA use, interestingly currently KSA is working on three road haulage CVA’s. They blame the tight rates paid by retailers and lack of available finance to adequately fund their businesses.

A major impact on the use of CVA’s has been the threat of winding up petitions from HMRC. We have examined the number of winding up petitions issued in quarter 2 and 3 and did not detect much variance in these data. Our current view is that most directors will not consider the use of a rescue tool like a CVA, until the company is standing on the brink, typically a winding up threat by HMRC is the prod that is needed to make that decision.

Perhaps the number of threats to petition has fallen in prior quarter, leading to more companies relying upon deferral of tax and not the radical restructure that a CVA can lead to.

As champions of the CVA tool and the great changes that it can bring about in a failing business, we are disappointed that the use of CVAs has fallen back, but believe that a firmer approach by HMRC towards failed time to pay deals in 2011, will lead to more companies considering this option.

Without sounding like the proverbial doomsayer we at KSA think there is probably a false dawn here, very low interest rates, leniency on tax collection and support though HMRC’s time to pay scheme are not sustainable as the economy recovers. With government spending cuts and higher unemployment we would expect to see growth in the use of CVA’s and sadly liquidations in the transport, restaurants/hotels, retail and property sectors through 2011.

Keith Steven
KSA CompanyRescue

If you would like discuss how our Debt Recovery/Debt Collection service can assist your business, please visit the ‘Debt Recovery/Debt Collection’ section on our website,  contact us on +44 (0) 151 515 3014 or email us.

Please note: Information in this blog post is content property of Business Credit Management UK (www.creditman.co.uk)  and the full original article can be found by clicking here.