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 44
Dated: 25 November 2001
Welcome to the Business Credit News UK.
In this weeks edition you will find the following topics.
Now You Can Order And Pay Online - The first comprehensive study of the UK Debt Collection Industry published by the Credit Services Association (CSA) with the Credit Management Research Centre at Leeds University Business School can now be ordered and paid for by credit card online at http://www.creditman.co.uk/referenc/debtsurvey.html
The cost of the Debt Survey 2001 is £300 and postage is included in the price. Overseas Orders are welcomed with payment by credit card.
UKMANUFACTURERS' EXPORTS WEAKEN AS GLOBAL SLOWDOWN CONTINUES TO BITE - CBI
Export order books are significantly below normal, with the CBI's November monthly Industrial Trends Survey reporting the weakest result for three years.
Fifty seven per cent of manufacturers say export order books are below normal and seven per cent say they are above normal. The negative balance of minus 50 per cent shows a marked deterioration since September's monthly survey when it was minus 41 per cent. This is the most negative result since November 1998 (-51 per cent).
Total order books remain weak with a balance of minus 33 per cent of firms saying orders are below normal. This balance is similar to the result in the previous monthly survey which was the worst for two and a half years. Manufacturers of capital equipment and producers of intermediate goods - components required elsewhere in industry, both reported that order books were significantly below normal while orders in firms supplying consumer goods were only slightly below normal.
Manufacturers now expect domestic prices to fall at a significantly faster rate than has been indicated in recent surveys. Expectations are the most negative since November 1998, with 34 per cent expecting average prices to fall, 62 per cent expecting unchanged prices and four per cent hoping to increase prices.
Manufacturing output is expected to fall further in the coming months as indicated by a negative balance of minus 21 per cent of firms, compared to minus eight per cent in September's survey. The largest falls are expected in aerospace, electronic and electrical engineering and metal manufacture.
Sudhir Junankar, CBI Associate Director of Economic Analysis, said: "This survey clearly shows the significant impact the global slowdown and the knock-on effect of September's terrorist attacks have had on UK exports. The situation has not been helped by sterling holding up against the euro since the September survey. Expectations of a further fall in output confirm that manufacturing will remain in recession into the New Year.
"Competitive pressures in the home market are set to drive down manufacturers' prices but this is good news for inflation prospects."
Stocks of finished goods are at their highest since February 1999, with 60 per cent saying they are adequate to meet demand, 25 per cent saying they are more than adequate and just four per cent saying they are less than adequate.
HEWITT WELCOMES BREAKTHROUGH FOR WORLD TRADE
Landmark Agreement At Doha Summit
Trade Ministers from 142 countries on the 14 November 2001 struck a deal in Doha to secure the launch of a new Round of world trade negotiations.
Welcoming the agreement, UK Trade and Industry Secretary Patricia Hewitt said:
"This historic deal - together with China and Taiwan's accession to the WTO - gives a badly-needed boost to world economic confidence.
"Coming just a day after the advances in Afghanistan, it signals the determination of the world community to fight terror with trade, as well as arms.
"These new world trade negotiations will be good for British consumers, good for our exporters and good for the developing world."
Ms Hewitt continued:
"Every traveller enjoys duty-free shopping. The aim of these negotiations is to make duty-free trade the norm, bringing the benefits of duty-free to every high street, souk and bazaar around the globe.
"If we can now cut by half world tariffs on food and other products, British families will be better off by £500 a year.
"The UK is also a great trading nation - the fifth largest trader in the world, with millions of jobs depending upon exports. Opening up more markets and cutting duties around the world, including in China and the USA, will safeguard manufacturing jobs in Britain and create new opportunities for our service sectors.
"We can all be proud that we have delivered on our promise to make trade work for people in the developing world.
"We have made it clear that medicines will be available in countries devastated by diseases like HIV/AIDS, TB and malaria, without undermining the incentives to pharmaceutical companies to develop new drugs."
Throughout the talks there has been a strong focus on the interests and needs of developing countries which make up three-quarters of WTO. Today's agreement includes several elements of real benefit to developing countries:
The agreement also paves the way for reform of the Common Agricultural Policy.
Ms Hewitt added:
"The EU is now committed to negotiations on cutting food export subsidies with a view to their phasing out. This adds to the pressure which the EU faces and strengthens the UK's hand in securing reform of the Common Agricultural Policy."
Environmental and social considerations will also be included in the new trade negotiations.
Ms Hewitt said:
"I particularly welcome the agreement to open negotiations on the relationship between international environmental rules and trade rules, which is a long-standing concern of environmental groups. We also welcome the ILO's decision this week to establish a Commission on the Social Dimensions of Globalisation and expect the WTO to participate in that dialogue."
She concluded:
"Let us not underestimate the significance of today's agreement. What we have achieved here in Doha can have a positive impact on the lives of every person in every country around the world. It is time to move beyond protests against globalisation, and use today's agreement at Doha to build a system of free and fair world trade for the benefit of the many and not just the privileged few."
HEWITT MAKES CHANGES TO CREATE A MORE BUSINESS-LIKE DTI
Revamped business support programmes, senior civil servants to spend a week a year with business, and private sector expertise to be brought in at the top.
Trade and Industry Secretary Patricia Hewitt on the 22 November 2001 outlined a series of reforms to the structure and operation of the DTI, to improve the way in which the Department serves business, employees and consumers.
The changes, part of an ongoing process, that have been developed following an extensive consultation involving business, trade unions, consumer groups and other interested parties, include;
The Office of Fair Trading, DTI, the National Consumer Council and others are also to draw up proposals aimed at ensuring that consumers receive consistent, streamlined, high quality advice and information about their rights.
Announcing the moves Patricia Hewitt said;
"These changes are designed to make the DTI a flagship Department with a clear role and strategy, truly focused on its customers' needs.
"The DTI's core role is to drive up productivity and competitiveness - helping UK business to become more successful and creating better products, better jobs and more wealth for our economy. Our strategic priorities in helping deliver this will be promoting innovation, spurring enterprise, and building competitive frameworks.
"We will continue challenging businesses to raise their game as well as championing the views of business with other Whitehall Departments.
Permanent Secretary Robin Young said;
"The changes we are announcing will help us to become truly customer focused - better able to identify where we can really make a difference, better able to deliver.
"I want DTI to be seen as a Department genuinely open to its customers. Closer involvement of business people and other outsiders as non-executives on our Boards will make sure we deliver results.
"Our reorganised structure will help to deliver a sharper focus on our priorities and on our relationship with business, employees and consumers."
The changes announced will be accompanied by a reorganisation of the Department, by next April, into four main pillars, comprised of
CHAMBERS OF COMMERCE WELCOME “HONEST AND ENCOURAGING” DTI REVIEW
Britain's business community reacted positively to the announcement by the Secretary of State for Trade and Industry of the new structure and strategy for the Department of Trade and Industry (DTI).
David Lennan, Director General of the British Chambers of Commerce, which represent over 135,000 firms across the UK, said:
"This is an honest and encouraging start to the process of necessary change at the DTI. The foundations outlined promise to strengthen the department's business case and focus, along with its messages and activities. The Chambers of Commerce will seek actively to partner business with the department in support of its goals.
"Following this review the DTI must now seize the opportunity to win exemplar status across government. World class businesses need world class business support, at all levels, local, regional, national and international, and business will welcome the specific measures to boost the DTI's understanding and delivery of business needs in this context.
"Greater powers to the Small Business Service and to the Regional Development Agencies are particularly welcome, and meet business calls for streamlined and strengthened arms of delivery to support local and regional competitiveness.
"However, business will be more guarded on the appointment of yet another new anti-regulation champion in government; the issues and the arguments in this area are well rehearsed, and the solutions are clear. Business needs government simply to concentrate on practical measures to reduce the burdens they face.
David Lennan continued:
"To achieve its own ambitions and those of business, and to become truly customer focused, the Department must become more accountable, and its operations more transparent, to its customers and not just to the Ministers it serves. The welcome commitment to greater involvement of the business community, both on strategy and delivery, suggests a real opportunity for government to engage more effectively the Chambers of Commerce and the businesses we support and represent."
CBI CHIEF PRAISES DTI PLAN TO GIVE BUSINESS MORE CLOUT IN GOVERNMENT
CBI chief Digby Jones praised the DTI for attempting to give business more clout across the government.
"Patricia Hewitt's initiative has a good chance of creating a stronger more customer-focussed department," he said. "It could give companies the business champion within government that the CBI has long campaigned for.
"We made strong representations to the review because of concern that the business voice was not sufficiently loud within Whitehall. In particular, it has not always been clear that the administration fully appreciates what makes business tick.
"So the Secretary of State is right to involve business people at a strategic level and we hope there will be secondee opportunities at lower levels as well. In addition, the rationalisation of business support schemes is long overdue because many firms struggle to understand what is appropriate for them because of the plethora of schemes on offer."
He added: "The worry is that the government has often generated more good headlines than it has improvements in services. The business community will judge the outcome on a track record of achievement and by their day-to-day experiences.
"The department is making all the right overtures but what we need now is delivery."
ERNST & YOUNG ANNUAL RESULTS 2001
Successfully repositioned the firm after the sale of Management Consultancy business, achieving good growth
First Big Five firm to transfer business to Limited Liability Partnership (LLP)
London, 20 November 2001: The UK firm of global business advisers Ernst & Young announced a successful financial performance for the year to 30 June 2001, continuing the trend of recent years. Despite a notable slowdown in corporate activity in the second half of the year the firm achieved 15% growth in fee income for its continuing business to £722.2m, only 1% lower than the previous year. Before exceptional items, operating profit grew by 14% to 7pound;185.7m and average profits per partner rose by 6% to £449, 000, despite having sold the Management Consulting business in the previous year.
Activity across the firm's service lines remained buoyant until the autumn and then began to slow with a marked downturn near the year end. Against this background there was good demand for the firm's services in many sectors. The Business Assurance increase in fee income of 14% was driven by strong growth in Advisory Services, as well as a high level of transaction related work in the first half. Taxation Services grew fee income by 15%, sustaining this rate of growth for the sixth consecutive year. Corporate Finance achieved 20% income growth with high transaction volumes owing to a buoyant market in the first half of the year, and a shift to restructuring assignments in the second half.
London, 21 November 2001.
Financial year: 1st January to 31st December
Key points:
Growth of 10.1% in consolidated turnover over the first nine months 2001.
This figure represents a slowdown compared with the first half of 2001 (+14.9% growth over 6 months), the result of the world economic slowdown and the first effects of the restrictive policy conducted by the Group in terms of risk.
The effects of the underwriting policy review in a generally deteriorating credit risk environment will continue to be felt in the coming months. On this basis, consolidated turnover for 2001 should indicate a rise of slightly less than 10% on an annual basis.
UK net turnover growth of 13% over the first nine months of 2001
Consolidated growth in 3rd quarter of 2001 is up 1%, compared with the 3rd Quarter of 2000 Some non-recurring elements have to be taken into account: significant perimeter changes during the 3rd Quarter of 2000 and a change in the method by which premiums are billed in France in 2001.
Credit Insurance and Guarantee business - growth of 10.7% over first nine months of 2001 Growth is slowing down, compared to the first half of 2001 (17.2% over 6 months). This trend is more pronounced for export credit (8.8% growth, compared to 12.7% for domestic credit), due to the restrictive effect of risk management, the French export trade slowdown and the changes in the method by which premiums are billed as indicated above. Guarantee activity still shows strong growth figures at + 20% over the first 3 quarters.
Sales of services - turnover growth is continuing at 8.6% over first three Quarters of 2001 This figure increases to 13.5% excluding the public procedure management services.
In the UK, the increased focus on receivables management services as part of Coface UK's complete credit solutions approach, is expected to play a significant role in developing the Group's office in this area.
Traditional markets - turnover growth at 5.2% in France, Germany and Austria
Newly established markets - turnover growth at 23.9% (26% at constant exchange rates) over one year in more recently established markets.
About Coface UK
Part of the Coface Group, the world leader in export credit insurance with over 78,000 clients in 99 countries, Coface UK specialises in flexible credit management services for British businesses, including domestic and export credit insurance, research into prospective buyers, credit information, customer monitoring and receivables management.
Coface UK's range of credit insurance products includes Open Trader (for comprehensive cover) and Top Trader (for key clients), both designed for UK companies with turnover of over £3 million. For SMEs, Managed Trader and Cashflow Trader provide cost-effective cover for domestic and export trading, with the latter offering a unique, fully integrated credit management solution which guarantees payment of invoices at 65 days from the due date.
Our trader range of insurance products are all Globalliance contracts - flexible modular policies that can be adapted to clients' specific requirements, whether they need customer or country risk cover, and adjusts to whatever country or language they may be trading with.
Other insurance related financial products include single risk cover, duty deferment guarantees and travel bonds.
As a member of the Coface Group, Coface UK clients benefit from access to three global networks, CreditAlliance, InfoAlliance and @rating, with information on 41 million companies worldwide.
For further information about Coface UK, please contact:
Suzanne Teo
T: 020 7325 7548
Email: suzanne_teo@cofaceuk.com
Website: www.cofaceuk.com
THINGS WILL GET WORSE - UK COMPANY PROFITABILITY SLUMPS TO NEW LOW
While some companies blame the events of 11 September for a rapid drop in their sales and profits, the latest edition of Experian's Corporate Health Check confirms that UK corporate profitability was already in steep decline months before. Across the economy as a whole, the average return on capital – a leading measure of profitability – fell from 11.18 per cent in the 12 months to December 2000 to 10.84 per cent in the 12 months to March 2001. This was the eighth quarter in a row that UK profitability had declined.
"There's no denying that the events of 11 September have changed the economic landscape," said Peter Brooker of Experian, the author of the report. "Some companies and industry sectors such as airlines have, of course, been very badly hit, and we only have to look at Swiss Air, Sabena and British Airways to see just how badly. But the airline sector, along with many others, was already in trouble before 11 September as a result of the global economic slowdown, disadvantageous exchange rates and the burden of additional red tape.
"If there was any hope earlier in the year that the economy might turn up towards the end of this year, this has probably now been dashed. Manufacturing output is falling at the fastest rate for almost a decade and has now declined for three consecutive quarters, fulfilling earlier predictions that the sector was heading for recession. Moreover, consumer confidence, which had provided the mainstay of the domestic economy, dipped sharply post 11 September, with the rate of job losses accelerating, house prices faltering and consumers cutting back on spending. More positively, though, with the recent cuts in interest rates, even before November's half point cut, consumer demand for credit is still robust and inflationary pressures appear to be weak.
"It had been hoped that the buoyancy of the domestic economy would offset the slowdown in export markets, particularly for manufacturing, but the downturn is now hitting service sectors as well, with the result that virtually every industry sector suffers from lower profit margins and returns on investment."
In the year to March 2001, profitability fell across 19 of the 24 manufacturing and service sectors covered by the report. In seven industries – Engineering, Diversified Industrials, Textiles & Clothing, Media, Food Retailing, Non-food Retailing and Motor Traders – profitability has fallen by more than one-fifth over the year.
"The Textiles & Clothing sector is in deep crisis," said Peter Brooker. "In the last Health Check, we predicted that the industry would fall into an overall loss during 2001. This happened in the first quarter of this year. Whereas many high street clothing retailers once made a virtue of the high content of UK manufactured products in their ranges, the vast majority of product is now imported, forcing larger UK manufacturers to close factories and make large number of job cuts.
"The rate of decline in the Media sector increased in the latest quarter, so that profitability has fallen by more than a third in 12 months (14.27 per cent to 9.12 per cent) and is set to get worse. As one of the first expenses to be cut when times get hard, however short-sighted that may be, a downturn in the Media sector is a clear advance warning of problems elsewhere in the economy."
Profitability has declined by more than a third over the last 12 months in two other sectors: Engineering and Motor Traders. The decline in profitability among Engineering companies from 10.41 per cent to 6.93 per cent comes amid an increase in warnings from engineering companies about job cuts and shrinking production throughout the UK. Motor Traders (14.89 per cent to 9.23 per cent) suffered for most of last year from the consumer boycott in protest at the high cost of new cars in the UK and competition from new, low cost suppliers, such as car supermarkets and Internet dealers.
Only four sectors have shown any real increase in profitability across the year. The Oils sector (7.68 per cent to 11.18 per cent) has benefited from the increase in the price of oil during 2000, while the Building & Construction sector (14.76 per cent to 16.87 per cent) has been helped by increased public sector infrastructure expenditure and buoyant housing prices. "However, the rate of increase in both these sectors slowed by four-fifths in the first quarter of the year," commented Peter Brooker. "It certainly looks as through the bubble has burst for the Building & Construction industry. By the beginning of the year, a lot of new investments were being cancelled, including many by US companies with operations in the UK, and we expect profitability to fall in the next quarter."
Sales of alcohol always rise in times of economic hardship, so the Alcoholic Beverages sector also bucked the general trend, with profitability rising from 11.07 per cent to 11.74 per cent. This is in sharp contrast with the Hotel & Leisure industry, where profitability fell from 11.68 per cent to 11.30 per cent across the year as the industry began to feel the effects of restrained corporate spending and fewer tourists as the US economy began to slow in the second half of 2000. These figures do not yet take into account the effects of the foot and mouth outbreak or the even greater fall in tourist numbers post 11 September.
The rate of decline in profitability among Technology based companies continued to rise in the first quarter of 2001 leading to an annual decline in profitability of just under one-fifth from 25.88 per cent in the 12 months to March 2000 to 20.81 per cent in the 12 months to March 2001. The number of profit warnings and layoffs announced in the first half of the year among technology companies indicates that profitability among companies in the sector still has a long way to fall.
The slowdown has spread to virtually every part of the country, with profitability falling in all regions during the first quarter of 2001, except in the North East, the UK’s most profitable region, and in Scotland. The year-on-year decline in profitability was in excess of one-fifth in the South West, Wales, East Anglia and Yorkshire.
"The prospects for 2001/02 were not encouraging before 11 September and are even less so now," concluded Peter Brooker. "Key economic indicators such as manufacturing output, producer input prices, business investment and the balance of payments have all deteriorated. And, on top of that, the world's three largest economies - the USA, Germany and Japan - are all slowing down together for the first time since 1974/75.
"The current uncertainty makes it much more difficult for companies to be confident about who they do business with, with blue chip names such as Hewlett Packard, Compaq, Rolls Royce, NEC, Marconi, Ford, Siemens, British Airways and Toshiba, among many others, all announcing major job reduction programmes or factory closures. The widely different fortunes among the airline companies illustrates just how important it is to make adequate checks into the financial stability of companies you're doing business with; in every sector there are going to be winner and losers, with some companies growing strongly - such as Ryanair and EasyJet in the airline sector - while others are on the brink of bankruptcy.
"Some help has come from the whittling away of interest rates - including last week's half point cut - but, with capital investment being cut across the board, inward investment in decline, fewer new business start-ups, falling consumer confidence and a service sector that is has forsaken its role as counterweight to the recession-ridden manufacturing sector, growth in the economy is slowing and there is a real danger that we could be heading for full-blown recession. This leaves the Chancellor of the Exchequer with a dilemma: given that he's unlikely to be saved by an upsurge in economic growth, he is either going to have to put the brakes on public spending or he is going to have to put up taxes."
SURVEY REVEALS MARKED DETERIORATION OF CASH MANAGEMENT IN UK LAW FIRMS
The tenth annual survey of Financial Management in Law Firms by PricewaterhouseCoopers reveals a marked deterioration in cash management amongst UK law firms. 65% of firms reported a level of investment in clients of more than 150 days - an increase of 20% on last year.
Alistair Rose, partner with PricewaterhouseCoopers Professional Partnerships Advisory Group said:
"Law firms are not billing and collecting debts quickly enough. Getting the money through the door is just as important as doing the work and all firms should be looking to make this a top priority, particularly in the current climate".
This lack of focus on core financial management is likely to have an impact on growth - both domestic and international. Alistair Rose continued:
"Funding expansion is cheaper if you can finance it through existing funds from within the firm. If firms let billing and debt collection take a back seat the cost of expansion will increasingly have to be met by external means e.g. bank loans, which are much more costly. Even for those firms not considering expansion - poor cash management puts an unnecessary strain on the business."
Training in key commercial skills such as selling and financial management could provide the answer. Alistair explains:
"Only 38% of firms offer selling skills training and 53% offer commercial or financial training. Given the likelihood of an economic downturn, these skills are increasingly important if firms want to improve the management of their finances".
Key findings:
Profitability
· 71% of firms (81% in the Top 100 law firms) have reported a growth in profit.
· 87% of firms reported increases in fees billed per partner, with 14% of firms reporting partner billings of more than #1million - an increase of 3% on last year.
· The majority of fees come from litigation work, which makes up 34% of gross profit. Property is the next biggest fee earner making up 21% with corporate work making up 15%.
Human resource management
· Appraisals are becoming commonplace with 65% (70% of the top 100) operating a formal appraisal system. However only 37% link the appraisal system to remuneration, although this number does increase among larger firms.
· Company pension schemes, private medical insurance and health care are the most common benefits offered to staff.
· Work/life balance issues have failed to register on the agendas of the majority of law firms. Only 14% offer flexible working hours, 9% offer career breaks and only 16% offer assistance with childcare.
Headcount / Staff turnover
· High volumes of work and increased charge out rates have enabled firms to reduce the proportion of staff costs to fees billed from 71% last year to 66% of firms this year where staff costs represent 40% of fees billed.
· Staff turnover levels have not improved, with the top 100 firms suffering the worst levels of staff turnover - now standing at 15%
Risk Management
· Although 97% of law firms in the UK now have formalised complaint procedures, only 56% regularly seek feedback from their clients.
· There has been a marked improvement in the number of firms who operate safeguards to ensure client confidentiality, up from 57% to 74% this year. However, only 20% of firms stated that they routinely limit their liability in client engagement letters, a practice common amongst other professional services firms.
· Whilst client acceptance procedures are widespread, 14% of respondents reported that their current procedures do not include checks for money laundering.
IT
· 50% of firms continue to invest in IT at a rate greater than 3-5% of their annual fee income. This increases to 67% of firms when you look at the top 100.
· Firms are also investing in dedicated IT staff - 92% of firms are now investing in dedicated IT staff (by recruiting an IT manager) compared to 74% last year.
· 94% of law firms now have a website and 77% of firms have carried out a review of their website to ensure the content meets all regulatory requirements - a significant jump from 31% last year.
This is the tenth successive survey of financial management in law firms. As in previous years, the objectives are to:
· Quantify the financial and operational performance of law firms
· Enable law firms to assess their relative performance through the use of benchmarking
· Raise awareness of issues governing certain aspects of operational and financial effectiveness
PricewaterhouseCoopers surveyed a wide range of law firms of diverse size and location including 46% of the Top 100 firms (of which 50% were Top 50). The "Top 100" firms are classified by fee income.
In a judgement given on the 23 November, the High Court has decided that the two London based claimants, Barings plc and Barings Securities Ltd, now Bishopscourt (BS) Ltd, are unable to claim against Deloitte & Touche Singapore.
This judgement has no effect on the claim made by Barings Futures (Singapore) Pte Ltd against Deloitte & Touche Singapore, which is the principal claim made against Deloitte & Touche. Nor does this judgement have any effect on the settlement with the Coopers & Lybrand firms.
This judgement rules out claims which the Liquidators wished to retain as an alternative to the claim by Barings Futures (Singapore) Pte Ltd. The Liquidators will consider the judgement further and decide whether to seek permission to appeal.
Richard Heis and Phil Wallace of KPMG Corporate Recovery were appointed Liquidators to Barings on 20 September 2001.
KPMG Corporate Recovery has over 400 professional staff in 22 offices around the UK.
*** 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 1.41 1.44 Canada 2.26 2.29
Austria 22.16 22.51 Portugal 322.87 328.05
France 10.56 10.73 Belgium 64.96 66.01
Finland 9.57 9.72 Italy 3118.32 3168.42
Germany 3.15 3.20 Sweden 15.12 15.24
Holland 3.54 3.60 Switzerland 2.34 2.40
Spain 267.97 272.26 Ireland 1.26 1.28
Australia 2.73 2.78 Denmark 11.98 12.17
Hong Kong 11.07 11.24 Euro 1.61 1.63
Africa Com 13.87 13.95 Saudi Arabia 5.32 5.40
India 68.08 69.27 Malaysia 5.39 5.48
Singapore 2.60 2.64 Norway 12.75 12.89
Japan 174.46 176.16
TW This week LW Last week.
Claims Direct announced pre-tax losses of 11.5 million pounds, after exceptional charge, on turnover of 9.04 million, for the six months ending 30th September 2001.
Ferraris, the medical equipment manufacturer, announced pre-tax profits of 3.86 million pounds, on turnover of 54.6 million, for the year ending 31st August 2001. Earnings per share stand at 11.6p.
New Look, the fashion retailer, announced pre-tax profits of 27.3 million pounds, on turnover of 276.3 million, for the six months ending 22nd September 2001. Earnings per share stand at 8.8p.
Robert Wiseman Dairies announced pre-tax profits of 8.96 million pounds, after exceptional charge, on turnover of 178.5 million, for the six months ending 29th September 2001. Earnings per share stand at 7.8p, on reduced capital.
MERGER NEWS
Royal Caribbean Cruises and P&O Princess Cruises, announced they are to merge creating the world's largest cruise company.Phillips Petroluem and Conoco also announced they are to merge. The new company, is to be called ConocoPhillips.
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 Scottish Annuity & Life Holdings Limited of World-Wide Holdings Limited and World-Wide Reassurance Company Limited
Proposed acquisition by Fenner Plc of assets of Uniploy SA namely The Unipoly Belting Division
Proposed acquisition by AEP Energy Services of certain assets of Edison First Power, namely the Ferrybridge and Fiddlers Ferry Power Stations.
Acquisition by Richmond Frozen Confectionary Ltd of the Nestle UK Ice-Cream business.
Proposed acquisition by Intelligent Processing Services Limited of certain assets of HSBC Bank plc.
Acquisition by Calpine UK Holdings of Saltend Cogeneration Company
ACQUISITION BY INSYS GROUP LTD OF HUNTING ENGINEERING LTD: MELANIE JOHNSON ACCEPTS UNDERTAKINGS IN LIEU OF REFERENCE
Competition Minister Melanie Johnson announced on the 15 November 2001 that she has decided not to refer the acquisition by Insys Group Ltd of Hunting Engineering Ltd to the Competition Commission, since Insys have given undertakings to remedy public security concerns arising in this case. Melanie Johnson's decision is made in accordance with the recommendation of the Director General of Fair Trading (DGFT).
Melanie Johnson said:
"The DGFT has recommended, taking account of advice he has received, that this merger raises public security concerns relating to the confidentiality of sensitive information and to the maintenance of a UK capability for developing, operating and maintaining technologies essential to the UK's security. I have decided that these concerns should be addressed by behavioural undertakings to be given by Insys. Since Insys have agreed this course of action there will be no reference to the Competition Commission. This is in line with the advice from DGFT."
Insys's acquisition of Hunting Engineering was cleared by the European Commission under Article 6 (1) (b) on 7 September 2001. Although the Commission has sole jurisdiction to investigate the competition aspects of the merger under the EC Merger Regulation, Member States may exercise a residual power under Article 21 (3) of the EC Merger Regulation to take 'appropriate measures to protect legitimate interests other than those taken into consideration'. Legitimate interests are defined in Article 21 (3) as including public (or national) security.
Section 75G of the Fair Trading Act 1973 (inserted by section 147 of the Companies Act 1989 and amended by the Deregulation and Contracting Out Act 1994) enables the Secretary of State to accept undertakings as an alternative to making a merger reference to the Competition Commission. The Secretary of State must consider whether such undertakings remedy or prevent adverse effects of the merger specified by the DGFT.
JOHNSON ACCEPTS UNDERTAKINGS FROM DYNEGY ON ACQUISITION OF BG STORAGE LTD
Competition Minister Melanie Johnson on the 23 November 2001 announced that she has accepted undertakings from Dynegy Europe Ltd covering its proposed acquisition of BG Storage Ltd.
As a result, the acquisition will not be referred to the Competition Commission. The Minister's decision was made following advice from the DGFT.
The DGFT advised that the merger raised competition concerns including:
- a very high share of physical gas storage capacity held by one company,
- a potential conflict of interest within the wholesale market.
Melanie Johnson said:
"I have decided not to refer this acquisition to the Competition Commission following advice from the DGFT. The public interest concerns raised by the merger will be addressed by behavioural undertakings. Dynegy have agreed to this course of action."
Projects in Manchester, Paisley and York to share in £3m IT research funding
E-commerce Minister, Douglas Alexander, on the 22 November 2001 announced the latest round of research into developing new technologies to fight fraud and increase e-commerce security. Four projects at UMIST, Paisley, York and Manchester universities will be given a total of £3m.
The four new projects will develop electronic solutions to help boost confidence in e-commerce and tackle fraud. They include research to
Mr Alexander said:
"The UK is a world leader in the development of cutting-edge technology. These projects will provide tools for business to combat fraud and increase confidence in e-business. The benefits they deliver will help make the UK the best place to do e-business.
"Consumer confidence is key in developing a thriving market trading online. Later this month we will provide a further boost with our campaign to raise consumer awareness on how to shop safely online."
Mr Alexander today also launched the DTI's new publication "UK Biometrics 2001" which showcases the work of UK companies and research projects, pioneering new face and voice recognition technology. This leading edge technology is becoming increasingly important, providing security solutions, tackling crime and delivering benefits to mobile phone users.
The publication is the latest part of the DTI's Security at Work initiative, which offers advice to businesses on how to improve the security of their electronic systems. The website www.securityatwork.org.uk provides information on security technologies and new products, with details of events and useful links.
The four IT projects are the latest to be funded as part of the Government's Management of Information (MI) LINK Programme which is funded by the DTI (£4.5m) and the Engineering and Physical Sciences Research Council and the Economic and Social Research Council with a joint contribution (£3.3m). Participating companies will provide matching funding making total funding of £15m. The programme also has the support of the Home Office and the Defence Evaluation Research Agency (known as QinetiQ).
The four new research projects announced today are:
Dynamic Fraud Detection and Analysis Tools (DETECTOR). This will develop software that will detect mobile phone call behaviour patterns and provide visual analysis of information. It will help to identify fraud in mobile and electronic commerce. Project partners are: Memex Technology Ltd., NTL Group Ltd, and the University of Paisley (Applied Computational Intelligence Research Unit). Total project cost approximately £460k.
Fraud Detection with AURA (FEDAURA). The project will further develop existing benefit fraud detection systems. It will develop new methods of high performance pattern recognition software for use by the DSS to tackle financial fraud reduction. Project partners are: Cybula Ltd, Sun Microsystems, SEMA UK Ltd, EDS Ltd, University of York (Dept of Computer Science), and Benefits Agency (DSS). Total project cost approximately £1.3m.
Fair Integrated Data Exchange Services (FIDES) will research into designing and implementing secure e-procurement information exchange systems over the internet to prevent fraud. Project partners are: Prismtech Ltd, Merrill Lynch, and University of Manchester (Dept of Computer Science). Total project cost approximately £693k.
Human Issues in Security and Privacy for E-Commerce (HI-SPEC). The project will research into the development of the "rules of trust" for e-commerce consumers and retailers. It will develop software to meet the needs of next generation "privacy enhancing" technologies. This will particularly address the problems faced by SMEs. Project partners are: Co-operative Bank, Homes for Change Ltd, Cookson.com Ltd, Redbricks Online Ltd, UMIST (both the Dept of Computing; and the School of Management), and The Office of the Information (Data Protection) Commissioner. Total project cost approximately £600k.
The Management of Information LINK programme is aimed at companies in the IT and Communications sectors wanting to collaborate with academic partners to develop new technologies and systems for controlling fraud and improving security and privacy. The programme has now funded 16 projects.
Details of the previous 12 projects that have benefited from the fund can be found at http://www.dti-mi.org.uk
Security at Work publications, including "UK Biometrics 2001", can be ordered on line from www.securityatwork.org.uk
4-6 December Online Information 2001 Olympia Grand Hall, London Wednesday 5 December The GETPAID Corporation's free half-day seminar Using Technology to Improve Your Cash Flow The Slouth/Windsor Marriott Hotel, Langley, Berkshire, SL3 8PJ Time: 08.00 For more information, call 01344.887.407. 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 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. 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 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 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
Alternatively you may use the email interface. email creditman-request@mailing-list.cyberstrider.net with the word Help in the subject line for details.
Business Credit Management UK: John Arnold jarnold@creditman.co.uk
Business Credit News UK: Pat Williams pwilliams@creditman.co.uk