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 4
Dated: 28 January 2001
Welcome to the Business Credit News UK.
In this weeks edition you will find the following topics.
UKMICRA ANNOUNCEMENT IS GREAT NEWS FOR SUNDERLAND - BYERS
Welcoming the announcement on the 25 January 2001, Trade & Industry Secretary Stephen Byers said:
"This announcement is great news for Sunderland. It is good for jobs and for the future.
"Won against international competition this decision demonstrates in the clearest possible way that Britain is best for business.
"We will see the development of a state of the art car plant in the North East. It will stand as a fitting testimony to all of those who have made the case for the Micra to come to Sunderland.
"Today's announcement also reflects the long term commitment of Nissan to the North East which the Government warmly welcomes.
"When the Prime Minister and I met Mr Ghosn last July it was made clear that securing European Commission approval for our offer of £40 million grant aid would be one of the factors which would influence this decision.
"We achieved approval for the £40 million in record time. I would like to place on record the Government's appreciation for the way in which Commissioner Monti handled the application and to my own staff at the DTI who dealt with it so efficiently and effectively.
"I'd like to think that we in Government have played a part in securing this decision. But more than anything else this is a victory for the workforce in Sunderland. By making their plant one of the most productive, not just in Europe, but in the world, they have done everything that was asked of them and more.
"They, above everyone else, can take pride and pleasure in this announcement".
THE GOVERNMENT WELCOMES REFINANCING OF HUNTINGDON LIFE SCIENCES
The Government welcomes the fact that Huntingdon Life Sciences has been successful in finding new long term financial backing.
This is welcome because it not only safeguards the company and 1100 jobs in the UK but also because the work of the company plays a critical role in medical research, and the development of new forms of treatment for diseases such as AIDS, Alzheimer's, Cancer, Heart Disease and Parkinson's.
The Government is determined that animal experiments will only take place where absolutely necessary for medical research, and has already done a great deal to address concerns about the use of animals. It has introduced the ethical review process and has stopped the testing of cosmetics on animals in Britain. The LD50 test has also been stopped. As a result the UK today has one of the strictest regimes in the world for regulating animal facilities and their treatment. But there remains a significant amount of medical research which requires the use of animals.
It is important that people working in HLS and in medical research should be free to go about their legitimate and tightly regulated work without harassment and intimidation. This is why the Government is putting more resources into policing and is bringing forward legislation to enable action to be taken to protect people in the industry.
ESTABLISHED COMPANIES FIGHT BACK IN E-BUSINESS BATTLE, SAYS HENLEY MANAGEMENT AND KPMG RESEARCH
A new research report from Henley Management College, funded in conjunction with KPMG, shows how traditional companies in the UK have successfully responded to the challenge of the 'new economy' and the rise of dot.com companies.
Dominic Swords of the Henley Management College questioned members of the Henley Learning Partnership, an association of 43 blue chip companies and public sector organisations, about their e-business experiences.
His report concludes that e-business solutions can improve the cost-effectiveness and profitability of a business, especially those that obey the following principles:
The report contains a series of examples of successful implementation projects from companies including Tesco.com, BOC Distribution Services and Smiths Medical, as well as an overview of the development of e-business in the UK and the USA.
Philip Davidson, Restructuring partner at KPMG commented:
“ This research is important because it provides us with further insights into the e Business issues that successful, leading companies have faced, by providing us with clear, practical evidence of what they have achieved.
“For many companies the ability to both correctly choose and successfully implement e Business initiatives will be key to their future success. Companies must ensure that their e Business strategy is an integral part of their business as, only then, will they be able to maximise the huge opportunities that e Business presents”.
MANUFACTURERS' EXPORT OPTIMISM AND OUTPUT UP, BUT INVESTMENT PLANS WEAK - CBI SURVEY
Manufacturers' optimism about export prospects over the coming 12 months, has risen for the first time in a year, the Confederation of British Industry said last Wednesday.
Publishing its latest quarterly industrial trends survey, the CBI said 27 per cent of firms were more optimistic about export prospects than four months ago, while 20 per cent were less optimistic. The balance of plus seven per cent compares to minus six per cent in October.
Output increased slightly, in tune with expectations. A stronger pick up is expected over the next four months with expectations the most positive since October 1997.
Total orders were largely unchanged. Twenty-nine per cent said total orders were up, 25 per cent of firms said they were down. The balance of plus four per cent compares to minus nine per cent in October. Firms expect total orders to improve slightly over the next four months.
Business confidence fell for the fourth successive survey, but more slowly than in October's survey. Twenty-four per cent of firms were less confident than four months ago, 21 per cent were more confident. The balance of minus three per cent compares to minus nine per cent in October.
Nick Reilly, Chairman of the CBI's Economic Affairs Committee, said: "Today's survey contains mixed news for manufacturers. Both domestic and export orders are expected to rise, but investment intentions and employment prospects all remain depressingly weak.
"The recent weakening of sterling against the euro and continued growth in Europe should help UK exports. But signs of a slowdown in the US could be contributing to the further fall in manufacturers' confidence. Investment plans remain weak supporting the CBI's insistence that targeted tax incentives in this area must continue. We believe that a quarter point cut in interest rates would not push inflation above target. But, it might boost the confidence of those companies who are reviewing their investment plans."
Constraints on output are coming from a lack of demand, a shortage of skilled labour and insufficient plant capacity. Lack of demand, the most important limiting factor, eased back to its lowest level since late 1997. Shortage of skilled labour edged up as a constraint and is now at a level last reached in early 1990. Plant capacity rose as a factor likely to limit output over the next four months, although it remains below the levels reported a year ago.
The number of firms working below capacity fell slightly to 57 per cent, the long-term average. Manufacturers of capital goods report higher capacity use than those producing consumer goods, where the position has deteriorated since October.
Plans to invest in plant and machinery in the coming year remain weak. Inadequate net returns continues to be the most important investment constraint, close to the record high of July last year. Uncertainty about demand - the second most important limiting factor - has risen towards its long term average after falling in the preceding two surveys.
Employment fell more quickly than reported in October. The rate of job losses is expected to increase over the next four months.
Profit margins continue to be put under pressure. Domestic prices fell, although at the slowest rate since July 1998. Unit costs rose moderately for the second successive survey and are expected to be unchanged in the next four months. Firms expect domestic prices to rise for the first time in three years, although this may also reflect seasonal adjustments to price lists at the start of the year. Export prices fell at the slowest rate for four years, and further more moderate reductions are expected.
Plans to speed up action against lenders and brokers who mislead or deal unfairly with borrowers, were announced on the 25 January 2001 by John Vickers, Director General of Fair Trading.
The OFT is to work with trading standards and advice agencies to improve its evidence gathering and pick up consumer problems at an early stage. Guidelines to be issued to all consumer credit licence holders will spell out the type of conduct that could result in the loss of a licence and the closure of a business.
Conduct likely to bring fitness to hold a licence into question includes: violence, dishonesty, discrimination, use of oppressive sales techniques and failing to offer redress.
John Vickers told trading standards officers at their Year Ahead Symposium in Northamptonshire:
'The OFT's record on taking action against holders of credit licences whose behaviour poses a risk to consumers has been criticised in the past. Obtaining quality evidence of wrongdoing has not always been easy and we have been reviewing how we can do more to combat unfair trading practices. In this we will be working together with trading standards and advice agencies to target the rogues.
'The OFT will set out its stall by way of guidelines to make clear what types of behaviour are likely to trigger regulatory action. Offences do not have to be linked with credit in order to attract our attention.
'More specific rules are planned for business sectors such as debt collection, credit broking, used cars and home improvements, all of which attract high levels of complaints.'
The OFT, which issued 16,716 credit licences last year, is also increasing the information it obtains to identify problems. More information will be sought from applicants for licences when new forms are introduced within the next two months. Broad based information on consumer problems will also be obtained from citizens' advice bureaux to ensure that problems are identified early.
John Vickers said:
'I am committed to ensuring that the OFT gives a clear lead in cleaning up the irresponsible element of this industry. They are on notice. If they fail to comply with the guidelines and act in an unfair or improper manner, action will be taken against them.'
The general guidelines will be issued within two weeks.
In 2000 the OFT issued 46 Minded to Revoke notices, 65 Minded to Refuse notices. It revoked 31 licences and refused a further 35.
Under Section 25 (2) (d) of the Consumer Credit Act 1974 the Director General can, when determining whether or not a licensee is fit to hold a licence to carry on the business of providing consumer credit, consider evidence of the licensee engaging in business practices appearing to him to be deceitful or oppressive or otherwise unfair or improper (whether unlawful or not).
Decisions to revoke a consumer credit licence are made by an Adjudicating Officer for and on behalf of the Director General of Fair Trading. Before a licence is revoked the Adjudicating Officer issues a minded to revoke notice to the licensee. The licensee is then given the opportunity to make representations before a final determination is made. In the event that the determination is adverse, the licensee has the right to appeal against the determination to the Department of Trade and Industry.
Once a licensee has its credit licence revoked it is not able to offer credit facilities. Consumer credit agreements already made are not affected.
Figures released on the 18 January 2001 by R3 show that nearly 1 in 5 of companies undergoing an insolvency procedure survive and continue in business.
In particular, R3's Ninth Survey of Business Recovery in the UK shows that, in CVA appointments, company preservation rates have increased to 74% from 63% in the last survey. The full results of the Ninth Survey of Business Recovery can be viewed online at www.businessrecovery.org.uk
R3 is pleading for creditors to take an enlightened attitude towards customers in trouble and has outlined a set of guidelines designed to help managers decide whether to persevere with a failing customer and advice on how to manage the relationship. The Ostrich's GuideTo Business Recovery is available online at www.r3.org.uk
Stephen Gale, R3 president and head of corporate recovery at Herbert Smith, said the figures show that managers should take an enlightened view if their customers or suppliers are experiencing difficulty, but should also take steps to minimise loss.
"Returns for creditors who support a successful rescue are usually much better than those they are likely to get in a liquidation. A rescue can be achieved by a number of methods, depending on the problems that need addressing and the attitude of the company's creditors.
"Managers should try and maintain communication with the firm in difficulty to avoid uncertainty. Up-to-date financial information and a clear and consistent credit control procedure also helps spot any potential problems.
"British insolvency law and practice has traditionally put creditors' interests first. However, the new Insolvency Act provides for a new voluntary arrangement procedure with a stay on creditor action. This new tool for the rescue and reconstruction of small companies means it is more vital than ever that creditors know their rights and that they understand how to evaluate a companies' rescue prospects."
*** FORTHCOMING CREDITORS MEETINGS ***
For detailed information on ALL the British Isles insolvency's (liquidation's, receiverships, administrations, dividends, creditors) please visit http://www.insolvency.co.uk
TW LW TW LW
USA 1.46 1.47 Canada 2.20 2.23
Austria 21.86 21.69 Portugal 318.63 316.06
France 10.42 10.34 Belgium 64.11 63.59
Finland 9.45 9.37 Italy 3077.38 3052.57
Germany 3.10 3.08 Sweden 14.16 14.05
Holland 3.50 3.47 Switzerland 2.42 2.42
Spain 264.44 262.32 Ireland 1.25 1.24
Australia 2.68 2.66 Denmark 11.86 11.77
Hong Kong 11.39 11.52 Euro 1.59 1.57
Africa Com 11.50 11.66 Saudi Arabia 5.47 5.54
India 67.84 68.56 Malaysia 5.54 5.61
Singapore 2.54 2.56 Norway 13.06 12.96
Japan 171.77 176.54
TW This week LW Last week.
Misys, the software group, announced pre-tax profits of 37.4 million pounds, on turnover of 413 million, for the six months ending 30th November 2000. Earnings per share stand at 4.8p.
NWF announced pre-tax profits of 1.01 million pounds, on turnover of 70.3 million, for the six months ending 30th November 2000. Earnings per share stand at 8.8p.
Partridge Fine Arts announced pre-tax profits of 3.15 million pounds, on turnover of 23.9 million, for the year ending 31st October 2000. Earnings per share stand at 9.8p.
Snackhouse announced pre-tax profits of 2 million pounds, on turnover of 49.1 million, for the year ending 30th November 2000. Earnings per share stand at 3.5p.
The London Stock Exchange appointed Clara Furse as chief executive to replace Gavin Casey, who resigned last September. As the first woman to run the LSE, she comes with a reputation for toughness, a quality she will need in abundance if she is to maintain the exchange's position as a leading centre for share trading.
Concern about the slowdown in the PC Market increased. Data from Context, a research firm, showed European PC shipments up just 6.9% in the fourth quarter of 2000, compared with 11.7% in the previous year, which had suffered from dramatic pre-millennium-bug spending cuts. In the two preceding years, shipment growth had exceeded 20%. Less frequent replacement and alternative ways of accessing the Internet were offered as reasons.
Dell Computer issued a profits warning for the fourth quarter of 2000. The world's second-biggest PC maker had cut prices, raising market share in a slowing market. Compaq suffered fourth-quarter losses after falling demand and a write-off of $1.8 billion, due mostly to the lower value of its Internet investments.
Orange, a mobile-phone company owned by France Telecom, announced the terms of an initial public offering of up to 15% of the company. Orange will be valued at up to EURO65 billion ($60 billion), less than half France Telecom's estimate of what it would fetch when it bought the company last year.
Two rival delivery services, Fedex and United Parcel Service, are trying to stop the Belgium-based DHL International expanding in America. FedEx claims that DHL Airways, part-owned by DHL International, would be more than 25%-owned by a foreign entity, which is a breach of America's federal requirements. DHL International is itself controlled by Deutsche Post which is part-owned by Germany's government. UPS's ploy is to claim that cash from Germany's mail monopoly would be used unfairly to finance an assault on America.
Unilever, an Anglo-Dutch consumer-goods giant undergoing a radical restructuring, is planning to raise $2 billion from the sale of its American bakery business and some European food brands. The sales are a condition imposed by European regulators after Unilever's acquisition of Bestfoods for $21.3 billion last year.
Kirk Kerkorian, a corporate raider and DaimlerChrysler's third-largest shareholder, reportedly sold half of his 3.3% stake in the company. He is pursuing the car maker through the courts for "fraudulently inducing the 1998 vote of Chrysler shareholders" by claiming the deal with Daimler was a merger of equals. Despite the sell-off, DaimlerChrysler's shares have appreciated of late.
Source - The Economist
MERGER CLEARANCE
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 to the Monopolies and Mergers Commission under the provisions of the Fair Trading Act 1973:Proposed merger between the Sanwa Bank Limited, The Tokai Bank Limited and The Toyo Trust and Banking Company Limited
Acquisition by Coflexip SA of the deepwater oil and gas field development business of Aker Maritime SA
Proposed acquisition by DLP A/S of Perryfields Holdings Limited Proposed merger between Wanadoo SA and Freeserve plc
A benchmarking survey of prices as at October 2000 for DSL and cable modem high bandwidth services in the USA, France, Germany and the UK has been published on the 26 January by Oftel.
The survey showed that in the UK the monthly charge for residential higher bandwidth services was around £40, compared to £37 in France, £31 in Germany and £32 in the USA. The results for business were mixed, though generally the UK was ahead of France but behind Germany and the US in terms of price and variety of services on offer.
David Edmonds, Director General of Communications, said:
"Oftel carries out regular benchmarking surveys to see how prices in the UK compare to other countries.
"This is the first time it has been possible to compare retail prices for high bandwidth services in the UK with prices elsewhere. While the survey shows that UK prices were somewhat less favourable compared to the other countries surveyed, DSL and cable modem services in the UK are still at an early stage of rollout and takeup.
"Since October 2000 some cable modem services have become available to UK users at prices below the average reported in the survey.
"BT's wholesale ADSL services are now available at 619 exchanges covering 40 % of homes and businesses. Over 40 UK service providers now offer high speed services using BT's wholesale product.
"Prices should fall further as competition and choice for broadband services continues to grow. Local Loop unbundling will provide further competition. The first trials of unbundled local loops providing DSL services are now operational, and after much hard work by the industry, BT and Oftel to solve the practical problems, more unbundled loops will be available over the coming months at the most popular of BT's exchanges."
International Benchmarking of DSL and Cable Modem Services is available on Oftel's website at www.oftel.gov.uk/research/2001/dslb0101.htm
Digital Subscriber Line (DSL) is a broadband technology that enables ordinary telephone lines to carry a variety of new digital information services such as high speed Internet access.
The survey was conducted to benchmark UK prices against those of a number of other countries and US states and should not be seen as recommended 'best buys'. When making a purchase decision, consumers will want to have the latest pricing information, as well as taking into account other factors such as service features, personal usage patterns, terms and conditions and indeed any other factors that they feel are relevant to their needs.
February 19th Wessex Branch of the ICM Mark Burgess of ETS (Export Training Services) Incoterms 2000 Royal Southampton Yacht Club Channel View Road, Southampton. 7pm for 7.30pm start Refreshments provided. 4th to 10th March National Credit Week 7th March Credit Today Awards 2001 Natural History Museum. London Wednesday and Thursday 7th and 8th March Credit 2001 The Event for the Commercial and Consumer Credit Industry Olympia London Thursday 8th March 2001 Companies House Seminar Swallow Hotel Peterborough Lynch Wood Peterborough Business Park Peterborough Registration 5.30pm - 6.00pm Tuesday 13 March Sussex & Surrey Branch of the ICM Alternative Dispute Resolution - Mediation Speaker: Russell Caller of Gillhams, Solicitors The Bridge House Hotel Reigate Time: 7.00 for 7.30 p.m. Sponsored by Gillhams, Solicitors 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 # = pounds sterling 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
To unsubscribe to this list please send e-mail addressed to jarnold@creditman.co.uk as follows:
unsubscribe credit-news your e-mail name and address
Business Credit Management UK: John Arnold jarnold@creditman.co.uk
Business Credit News UK: Pat Williams pwilliams@creditman.co.uk