Editor: John Arnold. E-mail jarnold@creditman.co.uk
Pat Williams. E-mail pwilliams@creditman.co.uk
Site: Business Credit Management UK
URL: http://www.creditman.co.uk
Issue: Vol 6 Issue 1
Dated: 6 January 2002
Welcome to the Business Credit News UK.
In this weeks edition you will find the following topics.
We would like to wish all our readers, clients and friends a very Happy, Healthy and Prosperous New Year.
UKRETAILERS SEE BUMPER START TO CHRISTMAS - CBI
Retailers enjoyed a bumper start to Christmas with the fastest year-on-year sales growth in a December survey since 1987, according to the CBI's monthly Distributive Trades Survey, published on Thursday 3 January 2002.
The survey shows that in the first two weeks of December retail sales volumes grew by substantially more than expected. While 65 per cent of retailers reported that sales volumes were up, 17 per cent said they were down. The balance of plus 48 per cent compares with plus 29 per cent in November and plus 19 per cent in October.
The underlying trend, shown by the three-month moving average, remained at around the levels seen in the spring, well below the summer peak. Sales volumes are expected to increase at a far slower year-on-year rate in January.
Sales were more above average for the time of year than at any time since December 1986. They are expected to remain above average in January although to a lesser extent.
Orders placed on suppliers picked up strongly in December showing the fastest rate of growth since October 1996. Fifty-six per cent of retailers said orders were up, 14 per cent said they were down. This gives a balance of plus 42 per cent which compares with plus 13 per cent in November and plus five per cent in October.
Alastair Eperon, Chairman of the DTS Panel and a Director of Boots, said: "December's significant increase in sales growth, following two months of weak growth, is very encouraging. Early indications show that the robust start to the Christmas period continued throughout December. It is vital that consumer spending remains strong when other parts of the economy are so weak. If the retail sector can maintain this position it will provide underlying strength to the UK economy as we go into the New Year."
All retail sectors reported increases in sales volumes compared with a year earlier. Stores selling durable household goods reported the strongest annual growth since June 1987. Substantial growth was also reported by hardware, china and DIY stores. Grocers, specialist food and clothes shops reported significant increases in sales. Firms reporting the lowest increases were booksellers and stationers, furniture and carpet stores and those selling footwear and leather goods.
Wholesalers' sales volumes remained stable even though a modest increase in annual growth had been expected. Business was considered to be moderately below average for the time of year. It is now expected to be further below average in January.
Motor traders' sales volumes grew strongly in the year to December, despite expectations of a moderate decline. Volumes grew at their fastest rate since September when they were boosted by the release of the new car registrations. Sales are expected to continue to grow strongly in January although at a slower rate than in December.
THE EURO ARRIVES
12 European countries introduced EURO notes and coins as a replacement for national currencies. Most governments presented this as a further large step towards European integration. Early indications suggested that the rapid "big bang" method had proved largely successful.
DON'T BE CAUGHT OUT BY THE EURO
Top Tips From Grant Thornton
Arming small businesses with the information that they need to deal with the euro now it has come into effect, leading business and financial advisers, Grant Thornton, in conjunction with Tolley's have produced a jargon-free guide to the euro and its implications.
The euro guide forms part of the firm's SME Handbook launched this week. The chapter on the euro aims to address the outcome of a recent survey undertaken by Grant Thornton which revealed that 87% of SMEs do not believe that the introduction of the Euro will affect their business.
Co-Author, Paul Andrews said, "Whether the UK joins the euro currency or not, it is going to become a reality that will affect businesses. From the results of our survey it is clear the Government has not done enough to inform UK businesses. It's time we had a proper debate on this issue."
To help owner managers to manage the introduction of the euro, Grant Thornton has produced the following top ten simple tips:
The SME handbook which is priced at £45 plus postage and packing is available from all good bookshops or by contacting 020 8662 2000 quoting T48T when ordering (ISBN 0 7545 1275 4).
Other topics covered in the book include accounts and audit, business administration, business planning, corporate finance, corporate governance, data protection, e-business, employment issues, exporting, family business, health and safety, information technology, insolvency, insurance, payroll, pensions and retirement planning, taxation and working capital management.
MEMBERS OF PARLIAMENT TO RECEIVE NEW YEAR BUMPER PACK
Employers are sending a "bumper pack" to Members of Parliament this New Year to demonstrate just how much red tape firms have to deal with.
The FSB, Britain's biggest business organisation, is coordinating the campaign through its regions and branches.
The red tape in question is the hefty PAYE Employers Pack sent out on an annual basis to employers by the Inland Revenue. It contains over seventeen items including a statutory sick say manual, National Insurance tables, tax codes, tax tables, employers bulletins and planners.
Bill Knox, FSB Employment Spokesman said, "the forms and guides are forever changing and need to be read and understood by all employers, even if they employ just one person. Many entrepreneurs dread taking on their first employee because of all the red tape involved."
The FSB has launched this campaign at a time when MPs are busy considering a new Employment Bill going through Parliament. The Bill includes proposals on employment tribunals, flexible working and parental leave.
Mr Knox said, "there is no doubt that the Bill is hard on small employers which can only harm productivity. The Inland Revenue's Employers Pack, which isn't far short of the thickness of The Lord of the Rings, will be even more complex once this Bill becomes law."
The FSB is working with MPs on the Standing Committee in the House of Commons suggesting amendments to the Employment Bill in order to reduce its regulatory impact on small businesses in particular.
Bill Knox said, "we are aware that MPs themselves employ on average 3 to 4 staff as researchers and secretaries. However all the employment procedures for their staff are handled by the House of Commons Fees Office and so they never get to see the Employers Pack."
"Employers cannot take much more red tape without their ability to create new jobs being affected. If Parliamentarians refuse to listen, the ability of small employers to hold onto existing jobs will also be affected," Mr Knox concluded.
TAX-SAVING NEW YEAR'S RESOLUTIONS FOR SMALL BUSINESSES
At times when the economy is flat, a serious commitment to paying less tax can significantly improve the net return from your business. Making the time to investigate all the options and planning ahead will greatly improve your chances of keeping down your tax bill.
Peter Penneycard, Director of Tax at PKF, recommends SMEs make the following New Year resolutions:
Plan your business exit strategy now to give you more tax efficient options.
Establish a procedure to ensure that all business expenses incurred by employees are invoiced directly to the business so that the VAT can be reclaimed.
Enquiries into tax returns are on the increase so tidy up (or find) the documentation to support your returns (and keep it up to date from now on!).
Note down all the important tax dates in your business diary and book yourself time to prepare all the papers so you, or your accountant, can submit the forms on time. Missing tax deadlines can cost you money in the form of penalties, interest and surcharges.
COMMERCIAL PROPERTY DEMAND STRONGER THAN EXPECTED OVER LAST SIX MONTHS BUT SET TO SLOW
Despite the global economic slowdown, activity in the commercial property market was stronger than expected over the last six months but demand is set to slip back during the first half of 2002. That's the main finding of a twice-yearly survey by the CBI and property advisers GVA Grimley.
Asked whether they had increased property holdings over the last six months, 33 per cent of respondents reported that they had while 11 per cent said they had not, giving a balance of plus 22 per cent. That compares with a balance of 12 per cent, recorded in the June survey, for the first half of 2001 and the six per cent which, at that time, said they expected to increase holdings in the second half of 2001.
Over the next six months there is likely to be a lot less activity in the market. Demand is expected to weaken but remain positive. Twenty per cent of companies said they expect to increase property holdings while eight per cent expect to reduce them giving a balance of 12 per cent. Seventy-one per cent of companies expect their overall property holdings to remain unchanged compared with 50 per cent in the last survey.
Looking back over the last six months the office sector has recorded the strongest increase in demand for property but looking forward to the next six months it is the retail sector that is expected to be more resilient. A balance of 18 per cent of companies in the office sector recorded increased holdings, but over the next six months that will level off. A balance of minus two per cent expect an increase in office holdings over this period.
In retail, a balance of plus 14 per cent said they had recorded an increase over the last six months while plus 19 per cent expect an increase over the next six months. Manufacturing and distribution have been much less buoyant and are expecting slight reductions.
The difference between the experiences of large and small firms is likely to become more marked. Larger companies are more upbeat than smaller ones. For example, a balance of 57 per cent of companies with over 5,000 employees reported an increase in property holdings. In the next six months a balance of 37 per cent of them expect a further increase. That compares with companies with under 50 employees which report little change and show a balance of just eight per cent expecting to increase property holdings over the next six months.
Demand was highest over the last six months in London and the South East (39 per cent) followed by the Eastern region (28 per cent) and Northern Ireland (25 per cent). All of these regions are slightly higher than in the previous survey.
With a balance of 30 per cent, the Eastern region is the most optimistic for the next six months, followed by the South West and Wales (27 per cent) and Northern Ireland (26 per cent). London and the South East is expecting a significant slowdown, recording a balance of 17 per cent.
Stuart Morley, Head of Research at GVA Grimley, said: "Although business output and employment growth are expected to be much weaker over the next six months, only a slight slowdown of expansion in the property market is anticipated. However, it is also significant that a much larger proportion of companies expect their property holdings to remain unchanged over the next six months than in recent surveys, indicating a noticeable reduction in activity in the property market."
The survey shows a continuing decline in business optimism. Seven per cent of companies were more optimistic than six months ago, 66 per cent were less optimistic. The balance of minus 59 per cent compares with minus 25 per cent in the last survey.
Firms questioned for this property survey reported their business output growth slowing. A positive balance of seven per cent of companies said they had increased their output over the last six months. This compares with plus 34 per cent in the last survey and 44 per cent a year ago. Over the next six months, a negative balance of 11 per cent of companies expect to increase output.
Employment increased over the last six months but the rate of growth slowed. A balance of seven per cent of companies said they had increased employment compared with 16 per cent in June and 26 per cent in November 2000. Over the next six months, the expectation is for a decrease on employment, as indicted by a negative balance of 17 per cent.
Ian McCafferty, CBI Chief Economic Adviser, said: "The unexpected level of growth in demand for commercial property over the last six months reflects the momentum of the domestic economy through the autumn. In particular the office and retail sectors have held up as fears of a slump in consumer confidence have not been realised and consumers have continued to spend. But business optimism continues to fall, as a result of growing uncertainty about the scale and extent of the economic slowdown, and demand for property will weaken again over the next six months."
Contributed by Eugene Joubert E-mail ejoubert@tresults.com
Eugene Joubert: Immediate Past President of the Institute of Credit Management in Southern Africa, says forecasts indicate that retail sales will grow by two percent in South Africa in 2002.
Whites are expected to account for 30,2 percent of all retail expenditure this year, Blacks 56,3 percent, Coloureds 8,5 percent and Asians five percent.
Projections are that Blacks will account for 71 percent of household furniture sales and 21,3 percent of sport and recreation goods.
"This shows that the gap between the living standards of the various population groups is shrinking. But it further indicates that the credit risk to the Black population is increasing, because most furniture is sold on credit."
He says the growth of the casino industry is another major factor.
"Casinos are now within the reach of everybody. Money, normally set aside to pay monthly instalments, is often being spent instead on card tables and slot machines."
Joubert says statistics show that South Africans are already spending 1.4 percent of their disposable income in casinos. As casinos are established closer to the main urban areas, this figure could soar, he warns.
Credit cards - used indiscriminately - are another potential hazard for unwary consumers. Joubert points out that credit card organisations are competing vigorously for market share.
"Interest rates on credit card purchases are still very high (14.2 percent to 18.5 percent). If the marketing efforts of credit card organisations are successful, this could saddle credit card users with more expensive credit and the overall risk to consumers will increase accordingly."
The dramatic rise in electronic transactions also poses potential pitfalls for consumers.
"E-Commerce or E-Shopping now brings products onto the desk of consumers. As these products are sold on credit cards, we will be facing a rising debt spiral.
"Many households have access to the Internet. Sales using this medium grew by 20 percent a month in 2001, as South Africans become increasingly aware of the variety of goods they can buy virtually at the touch of a button."
Joubert says that, according to recent statistics, there has been a 30 percent increase in the number of people being connected to the Internet each month.
The informal sector is also experiencing the impact of the credit explosion. "Large corporations, including banks, are buying into micro-lender groups and are funding these companies. As a result, more informal credit is flowing into the market."
Joubert says that the provision of comprehensive data on all credit being extended is becoming increasingly vital in order to calculate the over-exposure of consumers and businesses.
"No such all-inclusive databanks exist and we will have to give urgent priority to creating such structures, if the growing risk of over-exposure to credit is to be tackled effectively.
"Credit already accounts for 61 percent of consumers' disposable income. The lower interest rates could put as much as six percent back into consumers' hands - but the key issue is whether the consumer is going to re-spend this increased disposable income, or take the wise route and use it to pay off debt."
Total exposure to credit already amounts to R 640-billion - up seven percent on the 2000 figure.
"Although liquidation and insolvency figures are down by no less than 28 percent, these figures are still very high and credit is still being granted freely everyday," says Joubert.
He says that as credit criteria are tightened, a rise in the incidence of fraud can be expected. "Fraudsters need credit like any other person and if they cannot obtain credit legally, they will try to trick the credit grantors.
"People who do not intend paying back credit will think up fraudulent ways to obtain it - without paying it back.
"For some of these transgressors, it is a game - like writing viruses for a computer - and for some it is a way of life.
"Fraud will be with us as long as we grant credit."
Sources indicate that between 70 and 80 percent of all liquidations occur as a result of some type of fraudulent action, Joubert adds.
On the important need for consumer education on credit, Joubert says the credit industry had hoped that SAQA (South African Qualifications Authority) would take an appropriate lead.
"Sadly, SAQA has proved a disappointment to date in this regard and it appears as if the credit industry will once again have to bat alone in 2000 in educating credit grantors and consumers about the implications and the risks of using credit."
Given the relatively easy access to credit - underpinned by the increased sales forecasts - Joubert points out that the Black population is set to become the largest users of credit in the foreseeable future.
"Given the fact that, historically, the black population is the most neglected in the country when it comes to education on credit, education on credit usage and abuse thus becomes critically urgent."
With regard to law reform in credit, the Open Democracy Bill is currently a subject of much discussion and debate and Joubert says time is running out for a Law of General Application to be finalised.
Joubert, who is also vice president of the Association of Debt Recovery Agents and Executive member of the Statutory Council of Debt Collectors, notes that the new Debt Collectors Act has now been promulgated and the first seven articles of the Act have been put into operation.
"The most contentious of these, from a credit management perspective, is the definition of a debt collector.
"Many companies have yet to study this piece of legislation. For those who have, the definition has come as a shock, because the legislation involves them directly in the process of debt collection.
"The definition is wide-ranging in that it states that anybody taking over a debt and collecting it is in fact a debt collector.
"Short-term insurance houses take over the claim once they have paid their client and - at this point - they also fall inside the definition."
He says that through timeous intervention ahead of the Act's promulgation, factoring houses have succeeded in having factoring excluded from the definition of a debt collector - barring old debt - and do not have any difficulties with the Act in its present form.
The Act also states that all debt Collectors must run trust accounts.
"Companies which have not considered the implications of having trust accounts as part of their accounting systems are in for a nasty surprise," Joubert says.
"There was an inordinate delay in the promulgation of this Act and we believe this is a matter which the Department of Justice should have attended to a long time ago.
"The collection and recovery side of credit management is in for a rough ride, as many businesses will have to re-engineer their operations to cope with the articles of the Act."
Joubert says it is important to note that countries such as Britain, for example, will be implementing their Data Protection Acts. "We in the credit management profession should take careful note of changing legislation in other countries, in as much as this may affect trade and dealings with consumers and businesses in these countries."
LATE PAYMENT IS STILL THE NORM
Companies are still taking longer to pay their bills three years after legislation to speed up payment was introduced
Many companies are stubbornly clinging to the culture of late payment of invoices three years after the Government brought in legislation to make it easier for companies to put pressure on their customers to speed up payment. According to the latest research carried out by Experian, the information solutions company, the average payment period across all industries has remained at 60.3 days since May 2001, when the last survey was carried out, two days longer than when the legislation was introduced in November 1998.
"While it is disappointing to see that no progress in reducing late payment overall has been made in the three years since the legislation was introduced, there are, however, some encouraging signs that the message may be getting through," said Steve Kilmister, Managing Director of Experian’s Business Information division. "For the first time, the number of industry sectors improving their payment times over the last six months has exceeded those taking longer - 18 are taking less time to pay against 11 sectors that are taking longer than six months ago.
"Most encouraging of all is the progress made among medium and large companies overall. Unfortunately, in several sectors with the greatest numbers of companies, such as Construction, Property and Hotels & Catering, there was a trend towards even later payment, especially among larger companies, which cancelled out those speeding up payment."
Experian’s research, was conducted among 190,000 companies of all sizes and across 29 industry sectors. Of these, medium-sized companies in 20 industries are paying more quickly, against just eight taking longer, with the result that medium-sized companies have reduced their average payment time to 59.3 days in the last six months. Large companies, taking all industry sectors together, have knocked half a day off their payment time, to an average of 77.9 days.
Small companies in 16 industries reduced average payment times, against eight increasing and five showing no change. However, because of the larger numbers of companies in some sectors that are taking longer to pay their bills, the average among small companies actually rose by almost half a day to 50.1 days.
The slowest industry in paying its suppliers, across all size of companies, is the Oil industry, which takes an average of 72.4 days to pay its bills. However, this was a decline of 3.7 days on the previous six months and was the result of medium-sized companies in the industry almost wiping out the increase in payment times recorded in the last survey in May 2001. On the other hand, large Oil companies take 88 days to pay, an increase of four days over the last six months.
Taking size of company into account, large Gas companies added a further four days the 16 day extension they recorded in the six months between November 2000 and May 2001, taking the average length of time it takes them to pay their invoices to 95 days. Large Construction companies are almost as bad, taking 94 days to pay their suppliers on average, an increase of 11 days since May 2001.
Agriculture, Fishery & Forestry remains the most prompt at paying its suppliers, taking an average of 52.4 days. However, this is an increase of 1.7 days on May 2001 and an additional six days - to 75 days - among large companies in the industry. As a reflection of the severe hardships affecting the industry, small companies in the sector also took an additional two days, but it should be noted that the majority of the small farms most affected by the foot & mouth outbreak are non-limited, family owned businesses, so this survey does not take into account their financial problems.
The greatest improvement by an entire sector was among Chemicals companies. However, this is a small sector in terms of numbers of companies, so improvements among a relatively small number of companies can bring down the sector average. The same is true of the Pharmaceutical industry, with even fewer companies, which also recorded a substantial improvement. Both these industries were among the three slowest paying industries in May 2001 but are now closer to the UK average.
Experian's survey also gives an indication of the failure rate among companies in each of the industrial sectors. Although an additional 40,000 companies were covered by the survey, some sectors saw their numbers fall, either in total or by size of company.
"Companies in the Textiles sector increased their average payment time sharply in the last survey in May 2001," explained Steve Kilmister. "This is classic behaviour when financial problems occur and most company failures are preceded by a sharp increase in payment time. Now that many of these companies have gone into receivership, the average payment times of the lower number of companies remaining has fallen across the board - by three days among small Textiles companies, five days among medium-sized companies and by six days among large companies.
"Obviously, these are average figures and many firms are scrupulous about paying on or before the date agreed with their suppliers. But, on average, companies in Britain are still taking two days longer to pay their invoices than in November 1998, three years after the Government introduced legislation giving small companies the right to interest on late payments. Our survey shows that prompt payment of suppliers - many of which are much smaller businesses which cannot afford large overdrafts while they wait for their customers to pay often two or three months late - is really quite low on companies’ priorities when faced with their own difficult trading conditions and falling profit margins. Their priorities are to maintain cash flow and protect the jobs of their employees. The result is that payment times are even longer now than when the legislation was introduced."
"While some companies delay payment of invoices to aid their own cash flow in difficult times or have a dispute with the supplier, others have no justification. The problems that late payment causes suppliers – and the human cost – should not be underestimated. Cashflow, profits and growth can all be adversely affected. Late payment can, and frequently does, lead to business failure and job losses.
"With manufacturing already in recession and the slowdown spreading into service sectors, it is vital that companies protect their own future and their employees' jobs by finding out as much as they can about customers before they supply any goods and services on credit, checking their credit worthiness and payment record to in order to avoid the late payers. They can do this easily and at little cost through Experian’s Payment Performance service, which not only tells you how long the customer takes to pay its bills but also gives an early warning of any cashflow problems the customer itself might be experiencing."
Over 900 directors were banned between March and September this year, an increase of 24% over the same period last year according to the latest Government figures published on the 2 January 2002.
The Construction and Demolition sector had the highest number of directors disqualified (103) closely followed by Computer Services (75) and the Textile and Clothing Manufacturing sector (73).
35% of disqualifications were in London and the South East - with 20% in the North and 13% in the Midlands.
Melanie Johnson, Competition and Consumer Affairs Minister, said:
'It's vital that the business community and consumers are protected from irresponsible, incompetent or rogue directors at the earliest opportunity.
"Dodgy directors tarnish the image of the vast majority of legitimate businesses and often leave debts and misery in their wake.
"We are also determined to clamp down on the minority of fraudulent directors who try to cheat the public. These figures should serve as a warning to all of them - we will not let you get away with it.
"However it is important to consider these figures in perspective. The vast majority of companies in business today operate efficiently and responsibly with the result that, this year, less than one in a thousand directors are likely to be disqualified."
"The substantial increase in disqualifications this year is a direct result of the fast track process introduced by The Insolvency Act 2000. Cases can now proceed by way of written undertakings rather than being caught up in the court process."
Under the new rules directors can give an undertaking not to act as a director for an agreed period between 2 and 15 years. The undertakings are made to The Insolvency Service and registered at Companies House. They are accessible by public search and if contravened will constitute criminal offences.
Today's figures show that of the 935 disqualifications recorded in the half year period (Q2&3), 57% were on the basis of undertakings given to and accepted by The Insolvency Service.
The number of directors disqualified since the 1986 Act came into force now stands at over 10,000 of which over 50% were in the last four and a half years.
The Insolvency Service's directors 'hotline' encourages the public to blow the whistle on those who continue to act as directors and defy their ban. Since the 'hotline' was set up in January 1998 over 2,300 calls have been made. Every call is followed up and in the past six months 70 contraventions were reported for prosecution by Official Receivers. Convictions have been secured in 24 cases to date.
The statistics attached relate to the directors of failed companies in liquidation, administrative receivership or administration. The Official Receiver becomes liquidator when a company is compulsorily wound up by the court. He has a duty under the Insolvency Act 1986 to investigate the causes of failure and report misconduct. Insolvency Practitioners acting as voluntary liquidators, administrative receivers have a duty to report unfit conduct to The Insolvency Service.
The "Defiant Directors Hotline" can be contacted on 0845 601 3546.
Section 6 of the Company Directors Disqualification Act 1986 allows the court to make a Disqualification Order of between two and 15 years for unfit conduct as a director.
On 2 April 2001, amendments to Section 6 of this Act made by the Insolvency Act 2000 came into force. Amongst other things, this allows directors, whom the Secretary of State considers to have exhibited unfit conduct, to avoid the need for a court hearing by offering a Disqualification Undertaking acceptable to the Secretary of State. A Disqualification Undertaking has exactly the same legal effect as a Disqualification Order made by the court and usually includes a Schedule identifying the unfit conduct upon which it was accepted. The consequences of breaching a Disqualification Undertaking are the same as those for breaching a Disqualification Order.
Section 13 of the Company Directors Disqualification Act 1986 makes it an offence to contravene a disqualification order.
Section 216 of the Insolvency Act 1986 makes it an offence for a person to be a director of any company that is known by a prohibited name. Such a name becomes prohibited if it is a name by which a liquidating company was known or is similar to that name.
The Insolvency Service is an executive agency of the Department of Trade and Industry.
TYPE OF BUSINESS AND THE GEOGRAPHICAL SPREAD OF DISQUALIFICATIONS
Type of Business No. of Directors
Construction & Demolition 103 11%
Textile & Clothing Manufacture 73 8%
Labour Supply: Management & Business Services 45 5%
Computer Services 75 8%
Road Transport 55 6%
Engineering 45 5%
Manufacturing (other types) 45 5%
Paper & Publishing 31 3%
Retail (other types) 28 3%
Leisure: Hotels, Pubs & Restaurants 20 2%
Electrical & Plumbing 24 3%
Manufacture of Timber & Clothing 23 2%
Metal Manufacture 21 2%
Recreational Services 19 2%
All Wholesale 26 3%
Home & Garden Improvement 25 3%
Estate Agents & Developers 13 1%
Licensed Premises 11 1%
Motor Vehicles, Sales, Repairs & Petrol 26 3%
Decorating and Smallworks 9 1%
Management Services 15 2%
Insurance 6 1%
Retail of Electrical Goods 4 0%
Manufacture of Chemicals 2 0%
Medical Services 3 0%
Other Catering 6 1%
Furniture Manufacture & Retailers 4 0%
Residential Accommodation 0 0%
Repairs of Consumer Goods 0 0%
Others 178 19%
TOTAL 935 100%
Geographical Spread No of Directors
London & South East 331 35%
North 191 20%
Midlands 118 13%
South 84 9%
Scotland 66 7%
Wales 62 7%
East Anglia 40 4%
South West 43 5%
TOTAL 935 100%
DIRECTOR DISQUALIFICATION STATISTICS
QUARTERS 2 and 3 (1 April to 30 September 2001)
Q2 Q3 Q2 Q3
2001 2001 2000 2000
Disqualification reports and returns received (companies)
Official Receivers 484 605 490 530
Insolvency Practitioners - England & Wales 796 757 745 792
- Scotland 34 47 35 34
TOTAL 1,314 1,409 1,270 1,356
Disqualification proceedings commenced (directors)
From Official Receivers' reports 51 88 30 96
From Insolvency Practitioners' reports
- England & Wales 232 203 159 291
- Scotland 16 12 6 21
TOTAL 299 303 195 408
Disqualification orders made by courts/undertakings accepted
(directors)
From Official Receivers' reports 138 162 131 84
From Insolvency Practitioners' reports
- England & Wales 292 308 263 239
- Scotland 24 11 13 22
TOTAL 454 481 407 345
Orders made/undertakings accepted under Section 6 of the Companies
Directors Disqualification Act in the last two years:
Period of disqualification Number of directors
(years)
2 236
3 439
4 573
5 529
6 409
7 373
8 294
9 124
10 106
11 20
12 39
13 11
14 5
15 7
TOTAL 3,165
EXAMPLES OF CASES WHERE UNDERTAKINGS WERE OFFERED BY DIRECTORS AND ACCEPTED ON BEHALF OF THE SECRETARY OF STATE
WILLIAMS FOODS (PENRITH) LTD
Michael Williams of Penrith, Cumbria, a former director of Williams Foods (Penrith) Ltd, a meat trading business was disqualified from acting as a company director for six years on 16 August 2001. Mr Williams was disqualified because his company traded whilst insolvent and Mr Williams added to these debts by using company money to buy antiques from himself and his wife.
DERWENT CARE LIMITED
Dr Nabil Awadalla Naroz of County Durham was disqualified for five years on 19 October 2001 following his conduct as a director of Derwent Care Limited which ran a nursing home. Derwent Care Limited went into liquidation on 7 June 2000 with no assets and owing creditors #228,327. Dr Nabil Awadalla Naroz was disqualified for causing the company to continue to trade whilst insolvent. During this time he built up considerable company debts, didn't pay its taxes and failed to act on advice from an Insolvency Practitioner which would have improved the situation.
BACE CONTRACTING LIMITED
Anthony Fairbairn of Choppington, Northumberland and Steven Newell of Gosforth, Newcastle upon Tyne were disqualified for 10 years and 6 years respectively as a result of their conduct as directors Bace Contracting Limited. Bace Contracting Limited, a block paving company based in Bedlington, Northumberland went into liquidation on 22 September 1999 with no assets and liabilities of #76,396. Anthony Fairbairn and Steven Newell were disqualified because the company did not pay Crown monies, file returns or keep proper accounts. They also misused bank accounts. Mr Fairbairn was also acting as a director whilst bankrupt.
PRESIDENT TECHNOLOGY LIMITED WOUND UP
President Technology Limited has been wound up by the High Court following the presentation of a petition in the public interest. This followed enquiries made by the Companies Investigation Branch of the DTI under the provisions of Section 447 of the Companies Act 1985.
The company was used as an instrument for fraud. False accounts were filed in the company's name for the purpose of obtaining goods and credit by deception. In this way the company had obtained computer equipment and other goods and had evaded payment.
A petition to wind up the company was presented to the High Court by the Secretary of State for Trade and Industry on 6h November 2001. The petition was presented under Section 124A of the Insolvency Act 1986. The petition was heard on 19th December 2001.
The Official Receiver was appointed the liquidator of the company on 19th December 2001. All public enquiries concerning the affairs of President Technology Limited should be made to the Official Receiver at:
The Insolvency Service
Public Interest Unit
PO Box 203
21 Bloomsbury Street
London WC1B 3SS
President Technology Limited was incorporated on 13th July 1998 and its registered office is 82 Great Eastern Street, London, EC2A 3JF. The company's director is Madeline Chalmers and the company secretary is Emma Chalmers.
*** FORTHCOMING CREDITORS MEETINGS ***
For detailed information on the British Isles insolvency's (liquidation's, receiverships, administrations, dividends, creditors) please visit http://www.insolvency.com/cgi-bin/gazette/liq/nots.pl
TW LW TW LW
USA 1.44 1.45 Canada 2.31 2.32
Austria 22.08 22.71 Portugal 321.77 330.97
France 10.52 10.82 Belgium 64.74 66.59
Finland 9.54 9.81 Italy 3107.82 3196.55
Germany 3.13 3.22 Sweden 14.88 15.72
Holland 3.53 3.63 Switzerland 2.38 2.45
Spain 267.04 274.69 Ireland 1.26 1.30
Australia 2.81 2.87 Denmark 11.95 12.28
Hong Kong 11.29 11.33 Euro 1.60 1.65
Africa Com 18.24 17.61 Saudi Arabia 5.43 5.45
India 69.87 70.07 Malaysia 5.50 5.52
Singapore 2.68 2.69 Norway 12.88 13.20
Japan 191.26 191.20
TW This week LW Last week.
AT&T on Friday confirmed plans to cut another 5,000 jobs and take a $1bn restructuring charge as it continues to grapple with the shrinking long-distance voice business - Source FT.com
British Airways, Europe's largest airline, sounded a cautiously optimistic note on Friday in spite of another sharp fall in traffic last month. The carrier said revenue in December had "exceeded initial expectations", although heavy discounting and the continued weak demand in premium traffic left it "well below" last year's levels - Source FT.com
Fruit of the Loom, the US underwear maker in Chapter 11 bankruptcy protection for more than two years, said on Friday that a US bankruptcy court in Delaware had approved its sale to Berkshire Hathaway, the investment group headed by Warren Buffett. Source - FT.com
John Shumejda, president and chief executive of Agco, the US engineering business, was killed on Friday when his executive jet crashed on take-off at Birmingham airport, in the English Midlands. The crash also killed Edward Swingle, Agco's senior vice-president, and the jet's three crew members who worked for Epps Aviation, a sub-contractor.
The Queen is to be given a Bentley as a golden jubilee gift from Germany's Volkswagen breaking with long tradition that the official royal limousine is a Rolls Royce. It is reported Rolls-Royce who are owned by BMW are not amused.
MERGER NEWS
The Secretary of State for Trade and Industry has decided, on the information at present before him, and in accordance with the recommendation of the Director General of Fair Trading, not to refer the following merger/s to the Monopolies and Mergers Commission under the provisions of the Fair Trading Act 1973:Proposed acquisition by Euronext N.V. of LIFFE Holdings plc
Completed acquisition by Mondi Packaging (UK) Ltd of certain assets of Danisco A/S
Acquisition by Blackstone Group International Limited of assets of Pillar Property plc, namely Vintners Place
Completed acquisition by Schlumberger Ltd of Phoenix Petroleum Services Ltd
MELANIE JOHNSON PUBLISHES COMPETITION COMMISSION'S CONCLUSIONS ON THE MERGER OF KODAK AND COLOURCARE
Melanie Johnson, Minister for Competition, Consumers and Markets, has published the Competition Commission's (CC's) report on the proposed acquisition of ColourCare Limited (ColourCare) by Kodak Processing Companies Limited (KPCL). The report concludes that the merger is expected not to operate against the public interest.
The CC concluded that while the merger would give KPCL a 50% share of the market, the company would not be able to exploit its market position to raise prices or engage in anti-competitive practices.
Kodak Processing Companies Limited (KPCL) is a subsidiary of the Eastman Kodak Company. The proposed acquisition by the Eastman Kodak Company of ColourCare was referred on 16 August 2001 by DTI Minister Alan Johnson to the Competition Commission under the Fair Trading Act 1973. The CC submitted its report on 23 November 2001.
The Fair Trading Act 1973 empowers the Secretary of State to refer to the CC for investigation and report actual or proposed mergers which create or intensify a market share of over 25 per cent of the supply in the UK, or a substantial part of the UK, of particular goods and services or involve the take-over of assets exceeding £70 million.
If the CC concludes that the merger may be expected not to operate against the public interest, the Secretary of State has no power to attach conditions to it.
The CC found that the merger would result in the enlarged KPCL having half the relevant market but retailers would easily be able to shift more of their photo development and processing (D&P) to mini labs in their stores or to regional wholesalers, should KPCL seek to exploit its market position. The CC found no expectation of reduction in quality of service and the likelihood of modest technological advances.
Copies of the report 'Eastman Kodak Company and ColourCare Limited. A report on the proposed merger' (Cm5339) are available from The Stationery Office, priced £20.75. Order through the Parliamentary Hotline Lo-call 0845 7 023474 or Email book.orders@theso.co.uk
JOHNSON REFERS LINPAC'S ACQUISITION OF MCKECHNIE PAXTON
The acquisition by Linpac Group Limited of McKechnie Paxton Holdings Limited was referred to the Competition Commission (CC) last week by Competition Minister, Melanie Johnson. Her decision was in accordance with the advice of the Director, Legal Division of the Office of Fair Trading (OFT).
Miss Johnson said:
"The OFT has advised me that this acquisition may raise competition concerns in the market for the supply of returnable transit products in the UK. The transaction would bring together two of the largest market players in the UK.
"The OFT has highlighted concerns about the strength of the merged company in the market and has recommended that these concerns warrant reference to the CC.
"I have carefully considered the advice and agree with the conclusions. I am therefore referring the proposal to the CC so that it can be fully investigated."
The Decision to make a reference to the CC does not in any way prejudge the question of whether or not the merger would be against the public interest. It is for the CC to report on this after investigation.
The CC will report by 10 April 2002.
kelkoo and Ernst & Young survey reveals 32% of online toy shoppers seek the boy wonder
Online retail survey confirms the bespectacled wizard attracted a magical 32% of online toy searches in the UK during the Christmas shopping period.
In the four weeks up to Christmas Eve 2001, the Ernst & Young / kelkoo Brandometer which tracks searches on the shopping search engine, measured 18,500 searches on leading brands of toys from potential purchasers and 43,000 searches for video games.
Leading brands of toys
Nearly 6,000 or 32% were for Harry Potter. His closest rivals were Barbie with 1,900 searches, Scalextrix with 1,300 and Pokemon with 1,000.
Given the intense media interest in the launch of the film it is revealing that there were only a handful of searches for toys with a Lord of the Rings theme confirming expectations that it is predominantly an adult phenomenon.
Harry was popular outside the UK as well. He received the most searches on the French kelkoo site and was second on the Dutch site on both occasions receiving over 10% of the total searches on the shopping search engine.
Video games
Harry Potter led the way again in the UK with 9% of a total 43,000 searches for the nations favourite video games ahead of a chasing pack of Gran Turismo, Championship Manager and FIFA 2002. In France Harry was even more popular with 16% of a total of 13,500 specified searches. He came second again in the Netherlands.
Video game platforms
Results here were more surprising: searches for last year's favourite the Playstation 2 continued to outstrip the recently launched Gameboy Advanced.
Over a 108,000 searches were logged for computer games on the UK kelkoo site. 36% were for Playstation 2 games, 27% on PC games, 14% on Playstation, 8% on Gameboy Advanced, 5% on Nintendo Gameboy and 3% on Dreamcast.
So what's next after Harry Potter?
Pre-orders for Microsoft's gaming platform, the X-Box already clocked up 1% of searches although it will only be launched officially in March in the UK.
Alan Hudson, head of retail corporate finance at Ernst & Young explains, "The interest shown in Harry Potter toys is indicative of how both the online and high street retail market has remained buoyant in the approach to Christmas. Without the hype of the last few years the successful online retailers are quietly building their share of the retail market. Improving confidence in e-tailing means we will undoubtedly see this trend developing in years to come and their current 2% share of the total retail market expand."
Dorothea Arndt, Head of Marketing at kelkoo comments:
"AOL Time Warner's marketing of its Harry Potter property has undoubtedly boosted online Christmas sales, even over and above the very positive expectations both in the UK and elsewhere in Europe.
In the UK for instance kelkoo registered a year on year growth of 160% in Christmas season visits to UK e-tailers, which is well above the 116% year on year growth forecast by Forrester last month."
Monday 14th to Thursday 17th January 2002 ICM Examinations Thursday 24 January 2002 Sussex & Surrey Branch of the ICM Annual General Meeting Followed by Dinner. Speaker: To be advised Venue - The Imperial Hotel, Hove Time: 7.00 for 7.30 p.m. 27 - 29 January 2002 FCIB - A Global Association of Executives in Finance, Credit & International Business 108th International Conference & Workshop In Europe Amsterdam Marriott Hotel The Netherlands For further information Telephone: + 44 (0) 1865 481 630 Fax: + 44 (0) 1865 481 482 Email: timlane@fcib-europe.org Website: www.fcibglobal.com Friday 22 February 2002 Debt Sale & Purchase Credit Today, Savoy Hotel, London The second annual debt sale and purchase conference chaired by Rob Levick. For details e-mail carleen@credittoday.co.uk 6 - 7 March 2002 Softworld Accounting & Finance Software and E-business event. Grand Hall, Olympia, London Register in advance at http://www.softworld.co.uk/afs2002/register.html Wednesday 13 March 2002 ICM National Conference and Exhibition Heritage Motor Centre, Gaydon near Warwick For full details tel 01780-722907 or e-mail training@icm.org.uk 4 April Credit Today Awards 2002 Grosvenor House Park Lane London Black Tie Single Booking 120.00 plus vat. 10% discount to Credit Today subscribers Telephone 01403-786-726 or 020-7407-4700 E-mail sgc@mag-subs.demon.co.uk or awards@credittoday.co.uk or visit www.credittoday.co.uk 7 - 13 April The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning London, 80 Strand, WC2R 0RL Contact Jane Lees - E-mail jane.lees@nyif.com +44 (0)20 7010 2568 17 and 18 April Credit 2002 - The Definitive Event for the Commercial and Consumer Credit Industry Brompton Hall, Earls Court, London For more information contact vtolson@advanstar.com 22 - 28 April The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning Venue - Hong Kong, location tbc Time: 08.30 Contact Jane Lees - E-mail jane.lees@nyif.com Tel +44 (0)20 7010 2568 10 - 16 June The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning Venue - New York, location tbc Contact Jane Lees - E-mail jane.lees@nyif.com Tel +44 (0)20 7010 2568 21 June The ICM Fellows Luncheon Churchill Room, The House of Commons Westminster, London Guest Speaker Norman Lamb MP Cost 49.50 GBP inc of vat and all drinks Contact ICM Training Department on 01780-722907 E-mail sheila@icm.org.uk Wednesday to Friday 9 to 10 October International Credit Exhibition & Conference Raffles City Convention Centre Level 4 Swissotel Singapore , The Stamford Singapore Website http://www.internationalcredit001.com/ E-mail info@internationalcredit001.com If you have an event coming up which is credit management related and you would like us to make an entry in the Diary section please e-mail the details to jarnold@creditman.co.uk
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