High Risk Corporate Credit: February CCJ and Charges Data Summary & Analysis. February 2015

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Morgan Butler
8 years ago
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1 High Risk Corporate Credit: February CCJ and Charges Data Summary & Analysis! February 2015

2 Table of Contents 1. Introduction 2. Incorporation Date Analysis of High Risk Corporates 3. Respective Lenders Exposure to High Risk Corporates 4. Debtor Book Analysis 5. Industry Analysis

3 1. Introduction In February 2015, 661 CCJs were issued against companies for amounts exceeding 5,000. The infographic below shows the distribution of the companies. This report will look at these companies in more depth and combine the CCJ data with other data sets to derive insight which may help your business either guard against risk or be more discerning when analysing opportunities. This is a summary report only and we welcome feedback or suggestions for additional analysis. Please also contact us if you would like to receive future editions of this report, or if you would like the data on the subject companies in this report including contact details and associated financial data.

4 2. High Risk Companies by Age This table shows the number of companies issued with a CCJ > 5,000 in February 2015 by age of company in years. As expected, firms in existence for 0-3 years carried the greatest risk of being issued with a CCJ in excess of 5,000, and made up 32% of the total. There were 19 CCJs > 5,000 against companies still in their first year. This is especially alarming as in 2014 the average time for a case to go through the County Court for a claim under 10,000 was 31 weeks (about 7.5 months) and 56 weeks for claims above 10, This would suggest inability or unwillingness to meet debts at the very outset of the business. MarketingNav are able to help you avoid such high-risk businesses as far as possible by a variety of methods, including profiling these firms for predictive evasive action and tracking of their associated directors.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1!Figures are based on statistics published in September 2014 by the Ministry of Justice

5 3. Exposure to High Risk Corporates by Lenders 37% of companies issued with a CCJ > 5,000 have one or more outstanding charges from a creditor. MarketingNav checked against our database of all registered charges in the UK and highlighted lenders with exposure to two or more high-risk firms. Persons Entitled Number of Outstanding Charges % of High Risk Charges BARCLAYS BANK PLC % LLOYDS TSB COMMERCIAL FINANCE % NATIONAL WESTMINSTER BANK PLC % HSBC BANK PLC % BIBBY FINANCIAL SERVICES LIMITED % LLOYDS TSB BANK PLC % THE ROYAL BANK OF SCOTLAND PLC 8 3.5% SANTANDER UK PLC 7 3.1% BANK OF SCOTLAND PLC 7 3.1% RBS INVOICE FINANCE LIMITED 4 1.8% ALDERMORE BANK PLC 5 2.2% ASHLEY COMMERCIAL FINANCE LIMITED 2 0.9% CENTRIC SPV 1 LIMITED 2 0.9% CLYDESDALE BANK PLC 2 0.9% INVESTEC BANK PLC 2 0.9% LIBERTY LEASING PLC 2 0.9% NORTHERN ROCK PLC 2 0.9% SOCIETE GENERALE 2 0.9% STATE SECURITIES PLC 2 0.9% Selected firms with one high-risk charge: ABN Amro, AIB Group, Arkle Funding, Ashley Finance, Aura Finance, Close Invoice Finance, Factor 21, Finance Solutions Ltd, Five Arrows, Fleximize, Just Cash Flow, SME Invoice Finance, Market Invoice, Positive Cashflow, Ultimate Invoice Finance. As expected, the largest lenders feature most heavily. However, despite some firms intentionally pursuing high-risk clients or broad base targeting, it may be wise to monitor both the position and frequency with which a lender appears on this list.

6 4. Debtor Book Analysis 335 of the 611 companies issued with CCJs > 5,000 have debtor books (trade debtors + other debtors) larger than the total value of their unsatisfied CCJs in the 12 months previous. By factoring in the clear risk into the price, a lender with an appetite for opportunity may well want to look at this sector in more detail, and indeed, this is a strategy pursued by some. The graph below shows the value of debtor books in this high-risk group, indicating opportunity value, which may inform strategy. Conversely, 45% of firms in this high-risk group do not have debtor books that exceed the value of their outstanding CCJs in the past 12 months. Hence, these cannot claim that but for cash-flow issues they may not be in such a perilous position. It should also be noted that a number of the firms in the 100m+ category are household names and incurring a CCJ in excess of > 5,000 would in no way suggest cash-flow issues. However, closer analysis of the firms in all categories may reveal diamonds in the dirt and MarketingNav have a history of navigating lenders to such opportunities. Contact us today for a regular feed of targeted data, bolstered with the contact information of your choice.

7 5. Industry Analysis The 611 firms who were issued with a CCJ > 5,000 were classified into their respective industries using the Standard Industry Classification 2007 system. Full details of the classification codes are available from: This shows the high-risk sectors in the UK and is a worthwhile index to track to keep up to date with the market. SIC Code 2007 Code Prefix % of Businesses with CCJs > 5,000 Construction % Wholesale and retail trade; repair of motor vehicles and motorcycles % Administrative and support service activities % Manufacturing % Accommodation and food service activities % Information and communication % Real estate activities % Professional, scientific and technical activities % Transportation and storage % Financial and insurance activities % Arts, entertainment and recreation % Other service activities % Education % Human health and social work activities % Electricity, gas, steam and air conditioning supply % Water supply, sewerage, waste management and remediation activities % Public administration and defence; compulsory social % Residents property management % MarketingNav possess multiple options when applying industry classifications, including alternative classification systems or more in depth groups. If you would like to track a sector of interest or are interested in utilising the efficiency savings of reliable data to target clients, contact us today.

ASSET BASED FINANCE ASSOCIATION QUARTERLY STATISTICS TO JUNE 2014

ASSET BASED FINANCE ASSOCIATION QUARTERLY STATISTICS TO JUNE 214 CONTENTS Page 1. List of contributors 1 2.1. Clients sales 2 2.2. Balances at the period end 3 2.3. Analysis of sole lender and syndicate