Business Information
British small businesses wrote off a combined £5.8 billion in the last financial year. New analysis from Direct Line for Business has estimated that UK SMEs wrote off a combined £5.8 billion in the last financial year, the equivalent of more than £21,000 every day. When asked how much money their business had written off in unpaid debts in the previous financial year, around one in five (19%) SMEs said that they had written off debts at an estimated average loss of £31,330. However, almost one in ten (9%) of these SMEs claimed to have written off debts in excess of £100,000. When asked why their business had decided to write off unpaid debts in the last financial year, the biggest reason, cited by 29% of respondents, was that the supplier had become insolvent. To read Direct Line for Business' news release go to https://www.directlineforbusiness.co.uk/news/british-small-businesses-wrote-off-a-58bn-in-debt.
More significant Australian retail names predicted to face financial failure. According to an analysis by SV Partners, seven major Australian retailers are facing extreme risk of financial failure over the next 12 months, including a large clothing retailer, two computer retail giants, one big supermarket/grocery store and a large newspaper/book retailer. According to the SV Partners' August 2016 Commercial Risk Outlook Report, these seven large retail players have an annual turnover of more than $100 million and join more than 1,200 retailers of all sizes Australia-wide whose financial records show that they are at high risk of failure over the next 12 months. Overall, clothing retailers are the most at risk sub-sector within the industry with 91 businesses deemed as high risk of financial failure, followed by the supermarkets and grocery stores. To read SV Partners' news release with a link to the full report go to http://www.svpartners.com.au/more-big-retailers-predicted-face-financial-failure.
Late payment and other business failures cause over 1-in-5 UK corporate insolvencies. According to new research by R3, at least one fifth of UK corporate insolvencies in the past year were caused by late payment or the insolvency of another company. A survey of the insolvency profession reveals that late payment for goods or services was a primary or major cause of 23% of insolvencies in the last twelve months, while the failure of a supplier or customer was the primary or major factor in 20% of cases. 57% of insolvency practitioners identified construction as the sector with the worst track record for late payment. The research also indicates that the extent of the problem hasn’t improved since 2014 when a previous survey of the insolvency profession found that late payment was a primary or significant factor in 20% of corporate insolvencies. To read R3's news release go to https://www.r3.org.uk/index.cfm?page=1114&element=27579&refpage=1008.
Credit conditions for small businesses are improving across most of the US. According to the latest Experian/Moody’s Analytics Main Street Report, overall US small-business delinquencies decreased slightly from last quarter, with levels dropping at every stage of delinquency. The total bankruptcy rate fell as well, though at a slower pace than the previous year. "Small-business owners have done a great job of managing their financial commitments and paying their bills on time over the past few quarters,” said Gavin Harding, senior business consultant for Experian. “It will be very interesting, however, to watch the current trends unfold throughout the rest of the year, as administration and potential policy changes — as well as the impact of Brexit and other global events — could affect US business behavior.” Mark Zandi, chief economist at Moody’s Analytics, added: “The only blemish is for businesses in the still-struggling energy and related industries.” To download a copy of the Q2 2016 report, visit http://www.experian.com/business-information. To read Experian's news release go to https://www.experianplc.com/media/news/2016/main-street-report-q2-2016/.
Around 60% of new UK companies don't reach their fifth anniversary. Ormsby Street has launched a business survival calculator, a new tool which uses Office for National Statistics data to reveal the best and worst survival rates over one to five years for a variety of business types. For businesses starting out, the calculator predicts that nearly 10% of all businesses don’t make it through the first year, and only just over 40% of all companies will still be around half a decade later. Overall, the best industry to start out in seems to be Information & Communications, while those in the Finance industry find starting out most challenging. The biggest reason for business failure is cash flow. To use Ormsby Street's CreditHQ’s calculator go to http://survivalcalculator.biz .
UK shop vacancy rates rise above 10%. British Retail Consortium (BRC) has advised that new research has shown that the UK national town centre vacancy rate was 10.1% in July 2016, up from 9.6% in April 2016. Diane Wehrle, Marketing and Insights Director, Springboard, said: "This is the highest vacancy rate since April 2015, after which the rate remained below 10%. The April to June quarter can prove irregular, as post-Christmas pop-ups and temporary stores disappear from the high street and the EU Referendum and political and economic uncertainty of the last quarter will have deterred some retailers from taking on leases. The next quarter's figures will be the ones to watch to get a clear picture on any continued increase in vacancy rates, which would be concerning for town centres across the UK." To read the BRC's news release go to http://www.brc.org.uk/brc_news_detail.asp?id=3009&kCat=&kData=1.
Post Brexit: Immediate decline in UK business confidence less than expected. According to the latest Business Trends Report by BDO, business confidence is now at its lowest in over three years. Business output, reflecting companies’ experience of orders for the three months ahead, now sits slightly lower on the previous month at 98.2, down from 99.0. At the same time business optimism, which predicts growth six months ahead, has fallen from 98.9 to 97.9. These lie approximately mid-way between the 95.0 mark on the indices – below which lies possible recessionary conditions - and 100.0 – which correlates to the UK’s trend growth rate of just over 2%. BDO advises that while these results show that there is a definite and continued decline in the confidence of UK business people, the latest drops are not yet as dramatic as may have been predicted. To read BDO's news release go to https://www.bdo.co.uk/en-gb/news/2016/immediate-decline-in-business-confidence.
Is the UK’s new business growth declining? According to data from Company Check, the UK has experienced positive growth in new business incorporations year-on-year since 2010, with the number of new businesses incorporated growing from 420,994 in 2010 to 593,099 in 2014. However, the rate of this growth has slowed considerably, from 13.4% between 2010-11 to 4.9% between 2013-14. While Company Check noted that: "The ‘glass half full’ view is that more startups are surviving and thriving than were previously, leaving less cause for new businesses to be setup in the first place", it also warned that the Government needs to renew its efforts now to ensure the country’s startup success doesn’t stumble. To see the data analysis in full, visit http://hub.companycheck.co.uk/business-incorporations-uk/.
UK tops out as largest foreign investor in the US at $449 billion. According to the CBI’s annual Sterling Assets report, the UK remains the largest single investor in the US supporting over one million jobs across the country. Examining the impact of British business on the American economy, the report finds that as of the end of 2014, the UK had invested $449 billion in the US - $76 billion more than the next largest investor, Japan, and nearly $200 billion more than America’s neighbour, Canada. This represents a 15% share of the $2.9 trillion of foreign direct investment in America. In contrast, Indian and Chinese investment was much smaller, and combined does not even approach 1% of FDI into the US. American exports to the UK came to $123 billion in 2015 – up $5 billion on 2014 – making Britain the fourth largest destination for US exports for a second year running, and the largest within the European Union by a substantial margin. To read the CBI's news release go to http://www.cbi.org.uk/news/uk-tops-out-as-largest-foriegn-investor-in-usa-at-449-billion-cbi/.
Good news for retailers as the UK enjoys a post-Brexit spending splurge. Wilkins Kennedy has reported that latest statistics from the retail sales in July 2016 showed an overall increase in growth by 1.6% - despite Brexit fears. In July 2016, the volume of retail sales is estimated to have increased by 5.9% compared with July 2015, and all sectors showed growth with the main contribution coming from non-food stores. In addition, the amount spent (value) in the retail industry increased by 3.6% compared with July 2015 and 1.6% compared with June 2016. Phil Mullis, Partner and Head of Retail and Wholesale at Wilkins Kennedy, commented: “July was the first full month since the Brexit vote was announced and there was certainly an anxious wait to see how this would affect the overall landscape. However, it looks as though the UK has enjoyed a post-Brexit spending splurge as the good weather has resulted in a spike in sales, particularly for fashion retailers." To read Wilkins Kennedy's news release go to http://www.wilkinskennedy.com/news-press/wk-press-releases/july-retail-sales-uk-business-coming-home/.
Business confidence continues to fall within the manufacturing sector following Brexit. The latest quarterly Credit Managers’ Index (CMI) quarterly generated by the Chartered Institute of Credit Management (CICM) has shown that confidence within Manufacturing has fallen for the second quarter in a row, and while the pace of decline has slowed, the trend remains a concern on the back of the EU Referendum Result. But while there was bad news for Manufacturing in the midst of volatility in the financial markets and a drop in UK construction sector output, confidence within the Services sector has slightly improved and rallied after a poor first quarter, arresting the decline of the index overall. As a result, the headline index (including both Manufacturing and Services) stood at 56.1 – a fall of 0.5 points on the previous quarter: Manufacturing fell by 1.8 to 57.2 whereas Services improved by 0.06 to 55.63. To read CICM's news release go to http://www.cicm.com/manufacturing-confidence-services-steadies-ship/.
UK businesses concerned about post-EU referendum economy. New research from Grant Thornton suggests that UK businesses are less confident about their success in the year ahead than they were before the outcome of the referendum. Nearly half (49%) of respondents were less confident over the year ahead, whereas only 8% felt more confident. Respondents largely pointed to the impact of a general decline in the UK economy as a concern (74%), along with the impact of exchange rate movements (57%) and declining consumer confidence (55%) as areas which may affect their business. To read Grant Thornton's news release go to http://www.grantthornton.co.uk/en/news-centre/uk-businesses-concerned-about-post-eu-referendum-economy-whilst-access-to-the-single-market-remains-top-priority-for-growth/.
UK SMEs eye overseas markets for growth. According to the latest SME Confidence Tracker report from Bibby Financial Services (BFS), UK SMEs are increasingly looking to export goods and services. Findings from the Q2 research, undertaken in June ahead of the EU referendum, show the proportion of businesses investing in overseas trade increased to 12% – more than double that in Q3 2015 and the highest since the start of 2014. Commenting on the findings, Mark Lindsay, Managing Director of Trade and International at BFS said: “Though much talk prevails about the challenges businesses face in the wake of the referendum, there are also opportunities. With a weaker pound, many SMEs – particularly those who manufacture or source components from within the UK – are looking to increase export volumes with customers overseas.” To read BFS' news release go to https://www.bibbyfinancialservices.com/press/news/2016/smes-eye-overseas-markets-for-growth.
Copyright © 2016 Credit Insurance News. All rights reserved.
All news stories on Credit Insurance News' website are included with the prior permission of the copyright holder. Reproduction or redistribution in whole or in part, in any manner, without the express prior written consent of the copyright holder, is a violation of copyright law. If you, or your organisation wish to redistribute, republish or link-to all or any part of any Credit Insurance News Digest, you must first contact the copyright holder direct or email sally.brown@creditinsurancenews.co.uk for further information.
All news stories on Credit Insurance News' website are included with the prior permission of the copyright holder. Reproduction or redistribution in whole or in part, in any manner, without the express prior written consent of the copyright holder, is a violation of copyright law. If you, or your organisation wish to redistribute, republish or link-to all or any part of any Credit Insurance News Digest, you must first contact the copyright holder direct or email sally.brown@creditinsurancenews.co.uk for further information.
Join our mailing list to receive notification each time a new Digest is published.
Terms and Conditions Privacy and Cookie Policy © 2016 Credit Insurance News