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 5 Issue 33
Dated: 26 August 2001
Welcome to the Business Credit News UK.
In this weeks edition you will find the following topics.
UKCBI FORECASTS SLUGGISH ECONOMIC GROWTH THIS YEAR BUT UPTURN IN 2002
Economic growth will be sluggish for the rest of 2001 but manufacturing will start coming out of its technical recession by the end of this year and output growth will revive in 2002. That is what the CBI is predicting as it publishes its quarterly economic forecast.
The CBI is now forecasting that GDP will rise by 2 per cent this year as a result of the world-wide slowdown and the effects of foot-and-mouth disease. That compares with the 3.1 per cent averaged in 2000. Growth will bounce back next year to average 2.5 per cent, but that is still 0.2 percentage points below the figure predicted for 2002 in the previous quarterly forecast.
After declining for the first three quarters of 2001, manufacturing output will turn up in the fourth quarter and grow modestly throughout 2002. For 2001 as a whole manufacturing output is expected to fall by 1.1 per cent, a significant downward revision of the 0.1 per cent rise the CBI forecast in May, and rise by only 0.6 per cent in 2002.
Export volumes are expected to slow sharply over the coming months but recover next year as world trade picks up. Comparing the fourth quarter of 2001 with the same quarter last year they are expected to rise by just 1.5 per cent, implying 3.4 per cent for the whole of 2001. But export growth is forecast to recover to 4.4 per cent in 2002.
The outlook for inflation continues to be good. Underlying retail price inflation is forecast to go on undershooting the government's target. Comparing prices with the same quarter last year, inflation will average 2 per cent at the end of this year and reach a low point of 1.8 per cent in the second quarter of 2002. It is then expected to edge up slightly to average 2.3 per cent by the end of 2002. Average earnings growth is expected to ease over the year. It will average 4.5 per cent by the end of 2001 and remain broadly similar during 2002.
Digby Jones, CBI Director-General, said: "Despite benefiting from stable oil prices and some revival in export markets, manufacturing will continue to be the key weakspot in the UK economy. The likely upturn in the world economy will feed through next year but deliver only modest manufacturing growth. The Climate Change Levy - which is adding to costs and hindering job creation - is not helping recovery. Firms are continuing to do all they can by raising productivity but a further interest rate cut will be needed. We would expect to see interest rates at 4.75 per cent by the end of the year, if not sooner. With inflation set to stay below the government's own target there is no obstacle to a cut."
The CBI is forecasting interest rates will be reduced by a quarter point before the end of the year and remain at that level throughout 2002. That projection is unchanged from the May forecast.
Sudhir Junankar, CBI Associate Director of Economics, said: "Next year's economic recovery will be driven by home demand led by the consumer and supported by higher government spending. But the current imbalances in the economy will persist next year with manufacturing output up only modestly and trade still a significant drag on economic growth."
The forecast for surpluses in public finances has been revised downwards as a result of the slowdown in economic growth. In the May forecast, public sector net borrowing was expected to be showing a surplus of £3.9 billion in 2001/2002 and £3 billion by 2002/2003. Surpluses of £3.6 billion and £2.5 billion are now expected. Unemployment on an ILO basis is expected to rise slightly over the next few months peaking at 1.52 million in the second quarter of next year but remaining broadly stable over the rest of the forecast period.
TOP PAY IN FTSE 100 COMPANIES INCREASES BY 14.9%
The annual analysis of FTSE 100 reports by Monks, part of PricewaterhouseCoopers Human Resource Consulting practice, shows that:
The analysis in Board Pay & Incentive Practice in FTSE 100 Companies is based on the companies which were members of the FTSE 100 on 18 June 2001.
Year-on-year base salary increases for full-time chairmen or chief executives have increased by 14.9% at the median. This compares with 8.4% in 2000. Increases in total earnings, which are defined as base salary plus any annual bonus payment, are higher than in 2000 at 16.7%. Monks' analysis is based on 73 post holders who held the same position during the year reported in the 2000 and 2001 annual report.
Commenting on this year's findings the report's editor, David Atkins, Monks, said:
"This year's report contains only 80 of the companies which were in our 2000 analysis. Almost all the 'new economy' companies have left the FTSE 100, to be replaced by 'old economy' companies such as Associated British Foods, Hanson, Safeway and Wm Morrison Supermarkets.
"In addition to these changes there have been a number of large mergers for instance BP and Amoco, CGU and Norwich Union, Glaxo Wellcome and SmithKline Beecham and, of course, Vodafone and Mannesmann. It is, therefore, not surprising that base salary increases to chief executives are in double digits, reflecting the increased size of some companies and the shortage of individuals with skill and experience to manage businesses which, increasingly, are global.
"Further analysis shows that, with the exception of the telecommunications sector, the highest increases were to directors in lower paying sectors of the economy - notably utilities, computing, engineering and construction. Increases to directors in high paying sectors such as media companies and consumer goods companies were the lowest."
The report's findings indicate that other executive directors' base salaries advanced at a lower level than those of chief executives, at around 2% above 2000 levels. Depending on job function, total earnings for other directors were between 3.4% and 5.1% above 2000 levels.
There is a wide variation between sectors: the highest total earnings of chief executives were in the consumer goods sector with a median of £1,066,000 (Other Financial & Property in 2000) and the lowest in utilities with a median of £597,000 (Computing / High Technology and Telecommunications in 2000).
DEMAND FOR MANUFACTURED GOODS FALLS SHARPLY - SAYS CBI SURVEY
UK manufacturers say demand for their goods, at home and abroad, has weakened substantially since the start of this year. Total order books are at their lowest level for nearly two and a half years and output is set to fall. Those are the main findings of the CBI's August survey of industrial trends.
Asked about the total volume of orders on their books, 41 per cent of firms said they were below normal, 12 per cent said they were above. The balance of minus 29 is the lowest in a monthly survey since March 1999 and compares with minus 22 in the last monthly survey in June. Only the largest manufacturers, those with more than 5,000 employees, reported above normal order books.
Export demand also worsened. The balance of minus 39 is compares with minus 29 in June and is the weakest result in a monthly survey since June 2000.
Output expectations, which have been broadly stable since March, turned negative. Manufacturers are more pessimistic about future output than at any time over the past two and a half years. Sixteen per cent said they thought it would be up, 29 per cent said it would be down. The balance of minus 13 contrasts with plus two in the June survey.
Manufacturers of capital, intermediate (goods supplied to other parts of industry), and consumer goods all reported order books below normal but they were not as far below normal for consumer goods firms.
Official figures for manufacturing show that the largest reductions have been in the high-tech, electrical and optical equipment sector. This survey indicates that that sector will continue to suffer sharp declines along with the chemicals and metal products sectors.
Sudhir Junankar, CBI Associate Director of Economic Analysis, said: "The weakening of demand to its lowest level for two and a half years is yet more evidence of the impact of the global economic slowdown on manufacturing. Falling demand is increasing competitive pressures in the domestic market and forcing factory gate prices down. Worsening output expectations suggest many firms see no immediate prospect of their markets reviving."
The downturn in domestic prices is expected to continue. In June's survey they were expected to fall at the fastest rate since September 2000 and the balance figure in this survey is almost the same. Asked about how they expected average prices to move over the next four months, 10 per cent of manufacturers said they would go up but 26 per cent said they would be down. The balance of minus 16 compares with minus 17 in June.
NEW DIRECTOR & SECRETARY SEMINARS
Companies House holds seminar's at its Cardiff office, to assist new company Directors and Secretaries. The seminars provide delegates with an understanding of corporate governance and the role Companies House plays in the conduct of a limited company.
From incorporation to dissolution, the seminar highlights the responsibilities of company Directors or Secretaries, with regard to the Companies Act. Various representatives from Companies House are on hand during the day to discuss any questions delegates may have.
The cost of the day seminar, is £30 per person inclusive of VAT. The seminars are often oversubscribed, so please book early to avoid disappointment. The seminar programme is as follows:
PROGRAMME
10.00 Coffee and Introduction
11.00 From Incorporation to Dissolution - How Companies House is involved in your company
11.45 What you have to do
1.00 Lunch - An opportunity to meet key members of staff from Companies House Operations areas.
2.00 Tour of Companies House - What we do with the documents you send us.
Includes visits to the Post Room, Document Examination Section, Scanning Suite, Repository, Microfiche Library, Information Centre and our Call Centre.
3.00 Coffee & Roundup
3.30 Close
The dates of the Forthcoming seminars are:
If you would like to attend a seminar, or have any questions, please contact: Ian Roche iroche@companieshouse.gov.uk
Tel: 029 2038 0029.
Please note that due to logistical reasons, it is not possible to hold these seminars outside of the Cardiff office.
PRICEWATERHOUSECOOPERS GUIDE TO SURVIVING THE DOWNTURN
Adapting to the demands of a new range of creditors and taking early action to boost management credibility are some of the six key steps which companies should take to protect themselves against the economic downturn, according to the Business Regeneration practice at PricewaterhouseCoopers.
PricewaterhouseCoopers Business Regeneration is advising companies to take six specific steps to survive the downturn:
Mark Palios, Head of Business Regeneration at PricewaterhouseCoopers, said:
"The current downturn is different from recent recessions which were dominated by single stakeholders, in particular clearing banks. Management need to be alive to the differing demands of new debt providers and focus on the imperative of proactively managing stakeholders, to create breathing space with creditors, and taking decisive action which will instill much needed confidence. Cutting overheads and delaying payments will not be sufficient on their own to survive this downturn. Those companies which act sooner rather than later will be best able to negotiate the choppy economic times which lie ahead."
In its latest European Economic Outlook PricewaterhouseCoopers predicts that the Euroland economy could see growth decrease by a further 0.5% in 2001 and 1% in 2002, relative to a growth prediction of 2.5%. Further evidence of the challenges facing companies came from the DTI quarterly insolvency figures, released on 3rd August 2001, which revealed that in the second quarter of 2001 there were 3,789 company insolvencies - an increase of 9.3% on the same period a year ago.
PricewaterhouseCoopers Business Recovery Services helps rapidly to rebuild and recover value trapped in under-performing and troubled businesses. The specialist expertise available to corporates and lender institutions includes: business regeneration and turnaround, advice to banks and other lenders, investigations, and insolvency services. The world's largest dedicated business recovery practice, it has over 2,000 professional staff globally assisting troubled companies and, in the UK, includes some of the country's leading insolvency practitioners and CEO-level turnaround managers.
PricewaterhouseCoopers (www.pwcglobal.com), is the world's largest professional services organisation. Drawing on the knowledge and skills of 150,000 people in 150 countries, we help our clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance.
International Credit Insurers combine in customer-focused alliance
AMSTERDAM, 22 August - Swiss Re, NCM and Gerling Credit announced a transaction to combine Swiss Re's 90% owned subsidiary, NCM Group, with Gerling Credit (wholly owned subsidiary of the Cologne-based Gerling Group). The new holding company's name will be Gerling NCM Credit and Finance AG.
As part of the transaction, NCM's majority shareholder Swiss Re will receive a combination of cash and stock. NCM's other shareholders, ABN Amro and ING, will receive cash. Upon completion of the transaction the Gerling Group will become the majority shareholder (75%) and Swiss Re will remain a significant minority shareholder (25%) in the new company.
Gerard van der Stelt, NCM's Chief Executive Officer, said:
"NCM and Gerling Credit together will offer an enhanced value proposition to our clients, through specialist risk management capabilities and diversification.
"Trade globalisation requires high quality credit and trade receivables management through a single provider. As one of the world's largest credit insurers, Gerling NCM will be ahead of the market in meeting customer needs both on-line and off-line."
Bernd Meyer, Chairman of Gerling Credit, will be Chief Executive Officer of the new company.
He said: "This is a great combination. We are natural partners with real chemistry - sharing the same strategic vision of a receivables company."
"Our new combination will become the world-wide integrated credit insurer with the most extensive global network, offering the trade markets both off-line and on-line innovative solutions to minimise their trade risks."
Walter B. Kielholz, Swiss Re's Chief Executive Officer, said:
"Swiss Re is a strong supporter of the credit insurance industry and we are confident that a partnership with Gerling Credit will ensure NCM's long term future.
"We remain committed to the ongoing development of the new combined company, through our 25% stake." NCM is currently the world's second largest export trade credit insurer and fifth overall trade credit insurer with a 12% global market share and leading market positions in the United Kingdom, Italy, Benelux, the Nordic region and the United States. Total revenues in 2000 were EUR 528 million (Swiss Re purchased 90% of NCM in 1998, ABN Amro and ING Bank each retained 5%).
Gerling Credit, one of the world's largest credit insurers with a global market share of 13%, currently operates in 36 countries on 5 continents.
Gerling NCM Credit and Finance AG will have a global market share of 25% of the direct trade credit insurance business, with estimated total gross premiums of EUR 1.1 billion and will operate in virtually every major economy in the world, including the European Union, North America, Mexico and Asia.
Operating Worldwide
Complementary geographical representation is a major advantage. Current and potential customers will benefit from the new company's clear presence in leading markets such as Germany and France, where NCM's presence has been limited and Gerling Credit strong. Conversely NCM will provide Gerling Credit with improved access to markets such as The Netherlands, UK, Nordic countries, Italy and the United States where Gerling's presence has so far been limited.
This broader regional presence will enable the new combination to optimise further its information and risk portfolio as well as its credit insurance and other trade receivables services such as debt collection, factoring, guarantees, financial solutions including securitisations, and interim credit management services. Joint eBusiness products, building on existing advanced systems and expertise, will also be developed further.
Strengthening Financial Power
Combining the two companies will also strengthen their financial power, reinsurance structure and asset management in addition to enlarging the capital base.
As part of the successful integration of NCM and Gerling Credit the shareholders and management expect to work towards an Initial Public Offering of the new company in due course.
The deal is subject to regulatory approval by the insurance departments of The Netherlands and Germany and the EU Competition Authorities. However, the transaction is expected to close by the end of the year.
The NCM Group is a privately owned company headquartered in Amsterdam. In the 2000 financial year it insured business transactions worth EUR 172 billion (excl. Società Italiana Cauzioni) against the risk of non-payment, and revenues totalled EUR 528 million (excl. activity on behalf of the Dutch State). The financial result before tax and the addition to the equalisation provision, was EUR 54.9 million. NCM services more than 20,000 customers world-wide, helps them trade safely in 250 countries, can provide access to information on 30 million companies world-wide and processes one million requests for buyer risk assessments yearly. It employs approximately 1800 people.
Gerling Insurance Group is one of the leading German insurers, with gross premiums of EUR 9.5 billion and an IAS financial result before tax of EUR 216 million in the financial year 2000. Gerling is active in all areas of insurance and reinsurance in more than 30 countries. Standard & Poor's have confirmed their AA- rating for the four Group companies. The Gerling Insurance Group is owned by Dr. Rolf Gerling (70%) and Deutsche Bank (30%).
The Gerling Credit Insurance Group is the third largest credit insurer worldwide with a gross premium volume of about EUR 600 million and 1,650 employees. In 2000 the financial result of Gerling Credit before tax amounted to EUR 55 million. Together with its subsidiaries Gerling Namur (Belgium), Gerling Nordic (Norway) and Gerling Comesec (Mexico), the company is represented in 36 countries on five continents. The Gerling Credit Insurance Group became the first credit insurer rated "AA-" by Standard & Poor's and "Aa3" by Moody's.
Swiss Re is one of the world's leading reinsurers with over 70 offices in more than 30 countries. In the 2000 financial year, gross premium volume amounted to CHF 26.1 billion and the net income after tax reached CHF 3 billion. Swiss Re is rated "AAA" by Standard & Poor's, "Aaa" by Moody's and "A++" (superior) by A.M. Best
COLLECTION HOUSE LIMITED - AUSTRALIA EXCEEDS FORECASTS
Collection House Limited last week released its annual trading figures to the Australian Stock Exchange announcing record results for the 2000/2001 financial year that exceeded prospectus forecasts in both revenue and profit. Pre-tax profit of $14.1 million was achieved on revenues of $60.4 million. Post-tax profit of $9.3 million represents a year-on-year increase of 271%.
A final dividend of 3.5 cents has been declared by the Board.
Increases in revenue were attributed to continued organic growth and pre and post-float acquisitions of businesses and ledgers. The collection services market segment of the business maintained its status as the primary contributor to the company’s revenue. The acquisition of further ledgers from major financial institutions increased ledger income to $10.3 million for the year, and represented a significant increase on the company’s prior year performance in this segment.
Chairman of Collection House Limited, Dennis Punches, commented that the performance of the company since the initial public offer (IPO) has been excellent.
He further commented: “Credit must be given to the talented staff who have committed to the business strategy of the Board and the processes behind that strategy. These dedicated people have now set the scene for Collection House to utilise automation in a consolidated environment over the next financial period which will see profit margins increase.”
Managing Director and Chief Executive Officer, John Pearce, was delighted with the results. He confirmed his confidence that the Board had availed itself of sound investment opportunities. He was pleased with performance in all sectors of the business and was keen to progress the marketing and branding campaign for Collection House Limited and its subsidiaries.
“The current mix of products, services, technology and people will ensure the future of Collection House.”
The potential of the commercial sector and the current sales programme in the New Zealand market were nominated as potential revenue boosters for Collection House, in addition to further ledger purchase opportunities. Mr Pearce also acknowledged the rationalisation of the receivables management industry and its overall growth potential as some of the external factors which have contributed to the company’s outstanding success on the Australian Stock Exchange.
“The receivables management industry has never been so exciting and our shareholders have been rewarded for their astute investment in Collection House. We are very proud to have delivered these results to them.”
APPOINTMENT TO ADVISORY GROUP ON ENFORCEMENT
Baroness Scotland of Asthall QC, Minister at the Lord Chancellor's Department responsible for Civil Justice, has made appointments to an Advisory Group on Enforcement Service Delivery.
On 8 May 2001 the Lord Chancellor announced that he was establishing an Advisory Group on the delivery of enforcement services to guarantee openness and transparency. The Group will provide expert advice from the private, voluntary and public sectors involved in enforcement, and a market evaluation of the delivery of enforcement services.
On 8 May 2001 the Lord Chancellor also announced that new targets under the Public Service Agreement would be set in December 2001 to take account of initial findings of the Enforcement Review. In accordance with HM Treasury guidelines, that Government Departments should involve experts from outside the public sector, the Group will also assist LCD officials in both reviewing the existing target and setting new targets as part of the Government's Public Service Agreements.
Baroness Scotland said "This Advisory Group gives us an opportunity to continue to improve the effectiveness of enforcement. This is key to a modern justice system where people secure their rights in practice.
"We need to look very carefully at methods of service delivery, and this group, as part of the Enforcement Review, is central to the Government's commitment of delivering Public Service Agreements aimed at service delivery and return to the customer."
The Baroness has appointed the following to serve on the Advisory Group on Enforcement Service Delivery:
Professor Lord Desai - Professor of Economics, London School of Economics; Director of the Centre for the Study of Global Governance, LSE
Jeremy Sutcliffe - Senior Corporate Lawyer, Group Collections, National Australia Bank; Chairman, Civil Court Users Association; Member, Civil Justice Council Enforcement Sub-Committee
John Marston - Sheriffs Officer for Warwickshire, West Midlands, Hertfordshire and for the City of London: Chairman, Sheriffs' Officers' Association
Claire Sandbrook - Managing Partner, Burchell & Ruston Solicitors; Under Sheriff of Surrey; Deputy Sheriff of Greater London; Joint Partner of the Sheriffs' Lodgment Centre; Member, Under Sheriffs' Association
Nick Pearson - National Money Advice Co-ordinator, Federation of Information & Advice Centres; Member, Bailiff Law Reform Group; Member, Financial Services Consumer Panel
John Kruse - Training & Development Officer, Public Law Project, Birkbeck College, University of London; Member, Bailiff Law Reform Group; Independent Complaints Adjudicator for Certificated Bailiffs Association
Barrie Minney - Senior Bailiff, Brighton & Hove City Council; Member of the Certificated Bailiffs' Association; Member of the Institute of Credit Management
Sheena Garbutt - Vice Chair, Herts Magistrates Courts Committee; Board Member, Central Council of Magistrates Courts Committee
Andrew Rose - National President of the Certificated Bailiffs' Association; Member, Bailiff Law Reform Group; Bailiff Liaison Group
John Tanner (Chair) - Head of Civil Justice Division, Lord Chancellor's Dept
Vivienne Hodgson (Deputy Chair) - Head of Civil Enforcement Branch, Lord Chancellor's Dept
John Sills - Director of Civil & Family Business, Court Service
Alan Phillips - Group Manager, East Midlands Group, Court Service
The Group will probably meet monthly, and it is expected that their report will be published by the end of the year
SPECIAL CREDIT CONFERENCE 2001 NEWS - PART 3
International Credit Exhibition & Conference 2001 - Singapore - http://www.internationalcredit001.com
Asia 2nd Biennial Event, held Once in every 2 years only.
* Overview of the International Credit Conference - 24 to 26 October, 2001
Day Two - Credit Conference 25 October, 2001 Thursday ( Afternoon )
* International Credit / Trade Finance : - Competitive Trade Finance : A Look At Some Of The Lesser Used Tools. By Tim Lane, Director of European Operations, FCIB, (Finance, Credit and International Business), the international arm of NACM.
In an ever more demanding global environment this presentation will look at some of the basic principals surrounding the use of trade finance as a competitive tool in developing markets. Subjects covered will include á forfait - its positive applications for both buyers and sellers - and Countertrade - should it be taken seriously and, if so, how should it be approached and managed from the exporters perspective?
* Risk Management : -- The Holistic Approach To Credit Management
By Andrew Moore, Risk Management Specialist of Target Group PLC
Andrew will share his experience of treating the entire credit management process as a single entity to ensure that risk management is carried out during customer acquisition and maintained throughout the process. This includes developing people and processes by utilising technology as the catalyst for change as well as the vehicle to deliver best business practice. A holistic approach to the credit management process maximises the use of available resource while maintaining interest and staff productivity. This maintains customer service throughout the relationship and ensures consistent revenue flow by maximising profitability and minimising provisions.
* Credit & Receivables (B2B) : - E-Commerce Credit Technology.
By Carl Wegner, Director, Business Development, Asia / Pacific Region, TradeCard Asia Pacific
Negotiating payment terms and minimising risk is critical - and complex - for exporters. Exploring viable export credit management alternatives can be time-consuming, but can significantly reward your company. The Internet offers a fundamentally new dimension to the processes of obtaining credit insurance and receiving payment - which can bring enormous benefits to both the buyer and the seller. Over the last year, numerous new companies have offered all kinds of solutions from electronic letters of credit to offering a payment gateway or even the entire supply chain - including credit and settlement online. What are the risks and benefits for the buyer and seller when using an e-commerce solution for their credit and payment needs? Which of the products and services in the market are viable solutions? And how do these new electronic solutions affect the "old way" of doing business - what do the traditional big players have to change to meet the changing customer perceptions of good service and a useful product?
* Legal Aspects Of Information & The Net
By Soh Kar Liang, LL.B Hons (Singapore) - Advocate & Solicitor.
Business Information ... Intellectual property, its relevance, its incarnations, and how to harness its power?
* Collections Tools : - Modelling & Its Relevance To Collections
By Dr Dave Harris, Managing Director, Credit Management Solutions, Sanderson.
The complexity and diversity of debt portfolios means that credit managers need a common language that is understood by directors, managers, supervisors and the collectors themselves. Modelling provides this and helps companies to identify effective strategies for debt collection, ultimately increasing revenue.
* Time & Stress Management For Credit & Collection : - But, I Don't Have Time For A Nervous Breakdown !
By Timothy Paulsen, President, T. R. Paulsen & Associates
It is a busy world we live in, and there are a lot of pressures to perform in the Credit and collections field. In this informative and 'fun' keynote address, Tim Paulsen, International specialist in collections will share some techniques to improve time management within credit and collections, and to reduce stress.
* Export Credit / Factoring : - Export Competitively Through Export Factoring / ARP
By Lee Kheng Leong, Vice President Enterprise Banking Factoring, DBS Bank.
Asian exporters which are used to exporting comfortably on letter of accounts terms are finding it increasingly difficult sell on such favourable terms as more and more European and American buyers are asking for open accounts terms. However, selling on open account terms will tie up the financial resources of Asian exporters, expose them to risk of bad debt due to buyer inability to pay and face difficulties in collecting debts due to time zone differences etc.. Unlike other Asian exporters Hong Kong and Taiwanese exporters are able to overcome these problems through export factoring. Factoring can also be used as a tool to help MNCs to improve their return on assets ratio.
* Business Credit Management : - Optimising Trade Credit Management Performance
90 Minutes Special Credit Session By Russell Kennard, MBA, AIMC. Consultant, Kennard & Co
This session first considers the US APQC benchmarking framework and NACM credit management metrics explaining the dramatic increase in outsourcing AR and Collections. It then reviews recent European research and surveys on credit management best practice in small, medium and large companies highlighting key points for your organisation to optimise its performance.
For Full Details & Immediate Information Of the Credit Conference 2001 :
* Credit Conference Registration Forms & Bookings at : http://www.internationalcredit001.com/conference.htm
* Visitors On-Line Registration For Free Exhibition Pass at : http://www.internationalcredit001.com
Email or contact Organiser for Registration Form & Details Mailto:sales@internationalcredit001.com Tel: (65) 392-9210
Deal will preserve 600 jobs in 21 pubs, clubs and restaurants
KPMG Corporate Recovery has selected Finlaw 279 Ltd, a shelf company, as the buyer for the UK portfolio of Big Beat, the pub, club and restaurant business that went into receivership in early April.
The deal, which is for an undisclosed sum, will preserve around 600 jobs in 21 pubs, clubs and restaurants (including Home).
Finlaw 279 Ltd has awarded a management contract to the Mean Fiddler Group to manage the portfolio when the deal formally concludes.
Commenting, Receiver Blair Nimmo of KPMG Corporate Recovery said: "Having traded the business for over four months we are delighted to have found a buyer for the entire portfolio. Big Beat had a strong portfolio of licensed premises and we are confident that the new owners have exciting plans to develop the business."
During the receivership KPMG Corporate Recovery received over 450 enquiries for the business and 123 offers.
MILLENNIUM MORTGAGES 1999 LIMITED AND TRIPLE A FINANCE LIMITED
On 16 August 2001 The Secretary of State for Trade and Industry presented a petition in the High Court to wind-up Millennium Mortgages 1999 Limited and Triple A Finance Limited in the public interest, following enquiries made by the Companies Investigation Branch of the DTI under the provisions of section 447 of the Companies Act 1985.
On the application of the Secretary of State the Court appointed the Official Receiver as the provisional liquidator of both companies until the hearing of the petition.
Millennium Mortgages 1999 Limited was incorporated in July 1998 and traded as a mortgage adviser. Triple A Finance Limited was incorporated in February 2000 and traded as an investment adviser.
The registered office of Millennium Mortgages 1999 Limited is Finsbury House, 1 Vicarage Road, Bexley, Kent DA5 2AJ. The registered office of Triple A Finance Limited is 346 Croydon Road, Beckenham, Kent BR3 4EX. Both companies traded from 94b High Street, Beckenham, Kent BR3 1ED.
The petition was presented under s124A of the Insolvency Act 1986.
All public enquiries concerning the affairs of either Millennium Mortgages 1999 Limited or Triple A Finance Limited should be made to the Official Receiver at
The Insolvency Service
Public Interest Unit
PO Box 203
21 Bloomsbury Street
London WC1B 3SS
RECEIVERS IN AT LINCOLNSHIRE SANDWICH MAKER
Administrative receivers from business advisory firm KPMG have been called in on the 22 August at Tinsley Foods Ltd in Lincolnshire.
The Holbeach-based firm, a manufacturer of sandwiches, prepared foods and ready meals, employs 950 people and supplies major retailers such as Marks & Spencer, Safeway and Morrisons across the country. It has been trading since 1988 and is a major employer in the region.
Despite supplying some of the biggest names in UK retailing, Tinsley Foods has seen orders falling recently, resulting in turnover dropping by almost a third.
Commenting on the appointment, Myles Halley, joint administrative receiver from KPMG, said: "We will be seeking to trade on the company with a view to concluding a sale of Tinsley Foods as a going concern. Though reports within the media point to a fairly buoyant UK retail sector, there are still numerous hurdles to be overcome if we are to protect employment within the business."
ERNST & YOUNG SECURES THE FUTURE IF THE SAVE GROUP BY SELLING THE BUSINESS AND ASSETS TO ANGLO PETROLEUM
Joint Administrators, Alan Bloom, Trevor Frid and Alan Lovett of Ernst & Young confirm that on 8 August 2001 an exchange of contracts was achieved with Anglo Oil Trading Limited, a wholly-owned subsidiary of Anglo Petroleum Limited, for the sale of the entire business and assets of the Save Group of Companies in administration.
It is anticipated that completion will take place on or before 27 September 2001, the interval between exchange and completion being required to finalise all necessary completion formalities. After six months trading in administration, the proposed sale is extremely encouraging for all employees and licensees involved in the Save businesses.
Terry Riches, Managing Director of Anglo Petroleum, commented: "Efficiency is key to achieving success in the highly competitive fuel retail market. By applying Anglo Petroleum's proven management skills to the Save business, we believe that there are significant synergies to be realised from the combined entity. We are very excited about our future prospects."
Before going into administration on 28 February 2001, Save was the largest independent petrol station operator in the UK, with a full listing on the London Stock Exchange.
The rescue culture in operation
Alan Bloom of Ernst & Young, the Joint Administrator for the Save Group of Companies, commented: "It is always pleasing in an assignment of this size to report that no site closures were made and no redundancies were necessary during the administration process—a genuine example of the rescue culture in operation. The sale is a culmination of the considerable effort made by the multi-disciplinary team from Ernst & Young which brought sector knowledge and Ernst & Young's global reach to this transaction".
The combined business will trade under the aegis of Anglo Petroleum and will be the UK's largest privately owned fuel retailer and distributor.
CMS Cameron McKenna, solicitors and Adlers, chartered surveyors advised the Joint Administrators throughout this transaction.
Anglo Petroleum was also advised by Lazard, Arthur Andersen Corporate Finance, Nabarro Nathanson in London and Betesh Fox & Co in Manchester.
*** FORTHCOMING CREDITORS MEETINGS ***
For detailed information on all 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 1.45 1.44 Canada 2.24 2.12
Austria 21.84 21.79 Portugal 318.31 317.53
France 10.41 10.38 Belgium 64.09 63.89
Finland 9.44 9.41 Italy 3074.28 3066.86
Germany 3.10 3.09 Sweden 15.00 14.80
Holland 3.49 3.49 Switzerland 2.40 2.40
Spain 264,18 263.54 Ireland 1.25 1.24
Australia 2.72 2.76 Denmark 11.82 11.79
Hong Kong 11.31 11.28 Euro 1.58 1.58
Africa Com 12.16 11.96 Saudi Arabia 5.44 5.42
India 68.32 68.14 Malaysia 5.51 5.49
Singapore 2.54 2.53 Norway 12.88 12.86
Japan 174.65 174.57
TW This week LW Last week.
Fujitsu, a struggling Japanese chip maker, announced a restructuring in the face of collapsing chip prices around the world. Around 16,400 jobs will go, nearly 10% of the total workforce.
Shares in Excite@home, an American Internet service provider and media company, suffered a fall of 46% as rumours spread that the company would declare itself bankrupt.
WPP, the world's biggest advertising agency, trumped last month's bid by Havas, a French rival, for Tempus, a British media-buying company in which it already owns a 22% stake. The British agency's bid values the company at around GBP437m ($631m); Havas is mulling whether to improve its offer. WPP and Havas both released results for the first half that showed some growth despite a dramatic downturn in the advertising industry.
Deutsche Post, Germany's part-privatised postal service, announced that operating profit for the first half was up 5.5% compared with a year ago, to EURO1.4 billion ($1.26 billion). The main contributor was old-fashioned mail delivery. The German government recently agreed to extend the company's postal monopoly until 2007.
Source - The Economist
KBC Advanced Technologies, the oil industry consultant, announced pre-tax profits of 9.6 million pounds, after exceptional credit, on turnover of 19.3 million, for the six months ending 30th June 2001. Earnings per share stand at 13.6p.
Simon Group, the port services company, announced pre-tax profits of 49.5 million pounds, after exceptional credit, on turnover of 127.6 million, for the six months ending 30th June 2001. Earnings per share stand at 27.9p.
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:There is no Merger News this week
Within the online world, where location is less of an issue, loyalty to a website or brand differs from traditional retailer store loyalty. The importance of brand trust - the consistent fulfillment of the customer promise - is relevant not only to the retail brand, but also to the consistent delivery of a high quality experience for consumers. These conclusions, together with the regional differences identified by KPMG and the Oxford Institute of Retail Management (OXIRM), Templeton College, University of Oxford, in their global e-loyalty research programme, have now been published on the jointly hosted www.loyalty4profit.com website.
The research identifies a number of regional differences, including the relative maturity of parts of Europe and America in comparison to Asia/Pacific which still represents an opportunity for the future. While general trends may be observed at a national level, a more specific analysis is required to fully understand consumer trust of any particular retailer-product-transaction provider combination; the website highlights case studies including tesco.com (UK), dstore.com.au (Australian) and haburi.com (pan-European) which demonstrate this point.
Richard Cuthbertson, OXIRM comments:
"Differentiation around a clear consumer need and the delivery of great customer service from a trusted brand in a cost effective way is central to the creation of profitable loyalty in e-tailing. The use of technology and limited physical interaction with the retailer, creates a dangerous combination of high customer expectations and more limited opportunities for the e-tailer to remedy any service problems. Having well thought through customer management fulfillment processes is therefore essential if e-tailers are to meet this challenge."
In the current research findings, four key elements to a successful loyalty strategy for e-tailers have been identified:
Have a strong brand: Using a well-known and established brand helps create greater awareness and higher levels of consumer trust. For new entrants, this can take time and significant financial investment, making brand leverage with a well-known offline brand the preferred approach for many e-tailers.
Understand and meet customer expectations: A great online experience is identified as one of the most consistent drivers of repeat purchases. Understanding what this means for the consumer and ensuring that great service is delivered at all stages of the customer journey is essential.
Integrate operations: Customers like the flexibility of accessing a retail offer through multiple channels and the transparency of technology makes it obvious to the consumer when an e-tailer is not fully integrated with an offline business.
Manage security concerns: In less mature markets, credit card security and data privacy remain important barriers to purchasing online. Security scares can have a major impact on brand trust (both online and offline!). Patrick-Hubert Petit, Global Retail Chair at KPMG comments:
"Many of the early e-tailing pioneers really didn't understand the crucial need to build loyalty into the offer as they were totally focused on acquiring customers, so it's no surprise they're disappearing over the horizon now, with arrows in their backs.
Without loyalty, businesses are dead in the water, and the insights this research offers into the branding and operational strategies that create customer loyalty, will be invaluable to any retailer operating in the e-marketspace."
Loyalty4Profit is part of an on-going programme of research into the critical issue of customer loyalty. In this latest study, KPMG and OXIRM have focused on understanding loyalty strategies that can be specifically linked to profitability in online retail businesses. It is the first study to look at successful e-loyalty strategies in such depth and on a global scale.
The research was also produced in association with the Retail Management Institute, Santa Clara University, United States and the Australian Center for Retail Studies, Monash University, Australia, and in correspondence with Hosei University, Tokyo, Japan and the University of the Thai Chamber of Commerce, Bangkok, Thailand.
Loyalty4profit.com will also provide access to the three previous reports produced on Customer Loyalty Cards, Private Label Products and keeping Customers For Life.
Monday 3 September Wessex Branch of the ICM Motivation - Speaker/Sponsor Robert Half International Ltd Venue - Royal Southampton Yacht Club 1 Channel Way, Ocean Village, Southampton SO14 3QF Time : 7.00 pm for 7.30 pm Refreshments provided Wednesday 26 September Sussex & Surrey Branch of the ICM A speaker from Surrey Police Fraud & Financial Investigations Unit Venue - The Bridge House Hotel Reigate Time: 700 for 7.30 p.m. Sponsored by ICC Information Systems Ltd 1 to 2 October Experian UK Conference 2001 Managing customers outside in Celtic Manor Hotel UK 8th and 9th October 2001 FCIB's 107th International Round Table Conference In Europe Brussels Hilton Hotel 38 Boulevard de Waterloo, 1000 Brussels, Belgium FCIB's International Conference 'The Art of Country Risk Analysis' Further information can be obtained from: Tim Lane, Director of European Operations, FCIB Corporation, 7200 The Quorum, Oxford Business Park North, Garsington Road, Oxford OX4 2JZ, England Tel: 44 1865 481630 Fax: 44 1865 481482 (From within the UK, substitute zero (0) for 44) E-mail: timlane@fcib-europe.org Monday 15 October Wessex Branch of the ICM Retention of Title - Speaker/Sponsor Fanshawe Lofts Venue - Royal Southampton Yacht Club 1 Channel Way, Ocean Village, Southampton SO14 3QF Time : 7.00 pm for 7.30 pm Refreshments provided Thursday 18 October Magazines in Credit 2001 Conference and Awards Grosvenor House Park Lane, London W1 Telephone Justin Barry on 020-7400-7534 for more information or e-mail justin.barry@ppa.co.uk or visit the website at www.ppa.co.uk/events/credit2001 Wednesday, Thursday and Friday 24th to 26th October 2001 International Credit Exhibition & Conference The Westin Stamford, Singapore http://www.internationalcredit001.com Mailto:info@internationalcredit001.com Monday 12 November Wessex Branch of the ICM European Credit Checking - Speaker/Sponsor ICC Information Ltd Venue - Royal Southampton Yacht Club 1 Channel Way, Ocean Village, Southampton SO14 3QF Time : 7.00 pm for 7.30 pm Refreshments provided Thursday 22 November Sussex & Surrey Branch of the ICM Factoring/Invoice Discounting/Asset Finance Speaker: To be advised Venue - HSBC, Farncombe Road, Worthing Time: 7.00 for 7.30 p.m. Sponsored by HSBC Monday 10 December Wessex Branch of the ICM Quiz Night - Sponsor Virtual Mailroom Ltd Venue - Royal Southampton Yacht Club 1 Channel Way, Ocean Village, Southampton SO14 3QF Time : 7.00 pm for 7.30 pm Refreshments provided 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. 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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