ICSM News November 2019

ICSM News NOVEMBER 2019

Issue 01

Magaz ine

Curse of the Pheonix Companies They dump the debt and buy the former business for a song Plus news and features on insolvencies, liquidations and company collapses across British industry from ICSM Credit

Contents FEATURE 04-05

Welcome to this new issue of ICSM News

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We are in very uncertain times as in my experience these last few months have seen a huge number of company failures.

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At ICSM Credit we keep, and are kept informed of who is not paying who, which firms are in trouble and who to avoid.

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With so many High Street stores in trouble due to the rise of online shopping and high business rates and rentals, plus the decline in some traditional business sectors such as printing, 2019 has been an almost unprecedented year for business failures.

LISTINGs 10-12

You have to go back to the credit crunch for similar levels of company collapses, but like all downturns this one is different from before.

Welcome 03

Ian Carrotte of ICSM Credit Paul Carrotte on avoiding late payment from customers Don’t stick your head in the sand when the bills pile up Why are so many in business in denial they have a financial problem?

Rise of the Pheonix firms who never say die but re-emerge from the ashes dumping debt Who has bit the dust this month in Runners and Riders

The pop-up theatre firm Lundbox Theatrical Productions has gone out of business

Some commentators point to Brexit but it is my belief that the economy is cyclical and is forever changing.

Firms that don’t change with the times will inevitably feel the cold winds of the economy.

ICSM Credit has members in all sectors of the economy.

They join us to stay ahead of events by getting a headsup of who is in trouble. By using our credit information network (which is far more accurate than conventional credit check agencies) plus our free legal letters and our debt collecting service they insure themselves against the likes of Carillion and Thomas Cook.

Thomas Cook are one of a number of firms who have gone to the wall this year creating massive debt problems for their suppliers

I hope you enjoy this edition of ICSM News and recieve our regular newsletters, read our weekly news on our website and follow us on Twitter and FaceBook.

Here’s to a better 2020, Kind regards, Ian Carrotte

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8.

Charge interest as according to your terms and conditions on overdue amounts.

9.

Stick to your procedures and be firm at all times with the client over payment terms.

10.

Keep all emails and paperwork in case of legal action and never threaten legal action if you do not intend to pursue it.

“One conflict that can arise is that between the accounts and sales departments,” said Paul. “A large order may have just been received by the sales team from a client while the accounts department is about to put the customer on stop. A system needs to be in place on whether the order can be processed or not, with usually the financial director or equivalent making the final decision.”

How to avoid getting caught by the late payers of this world Having a clear credit control policy is vital for every business and sole trader says Paul Carrotte. Here the ICSM Debt Collection Manager outlines some top tips to prevent bad debts and late payment

How should firms work internally to ensure that payment(s) are made on time? (terms and conditions, notice to debtor, assessing why the debt is unpaid)

“Firstly take invoicing and payment seriously. Don’t invoice late, always chase up late payment and ensure the customer has agreed to your terms and conditions before you start work.

The print industry has been notorious in the past for so-called gentlemen’s agreements. A simple handshake and the phrase, “my word is my bond,” have been enough to seal many a contract between a printer and his or her client. All well and good in good times maybe between trusted friends but not anymore.

“If your terms are payment on 30 days then every day after that is late and should be treated as such.”

Paul Carrotte, ICSM Credit’s debt collection manager said: “There are some basic housekeeping procedures every printing firm, self-employed person or supplier to the industry can take.

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Paul gives ten useful tips for print firms in their internal accounting procedures.

1.

All customers to agree to your date terms and conditions and ensure they are signed.

2.

Have a strict procedure on invoicing, with invoices sent out on time as soon as a job is completed.

3.

Send a reminder by email

before the due date after 14 days if terms are 30 days, and 7 days if terms are 14 days.

4.

If payment fails to turn up on the due date phone the client and make sure you get a verbal answer from them or their accounts department stating when they will pay. Email them afterwards to remind them with what they said.

5.

Send a monthly statement by email listing everything owed.

6.

Insist on payment by BACs and not by cheque.

7.

Keep the channels open between the accounts department and that of your customer by polite and friendly telephone calls and emails.

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When should a professional debt collector be brought in? (what are the benefits, costs and odds of recovery?)

Paul said there are steps to be taken before calling in a debt collector which can work.

“The simplest one is to offer a payment plan,” he said. “A customer may genuinely not have the money to pay you, possibly because they’ve taken a bad debt or have cash flow problems. If you wish to keep them as a customer then helping them through a bad patch may help your relationship in the future.

“Insist all new orders are paid up front but allow them to pay the outstanding amount over a period of time in small instalments. It may not be ideal but at least you will get paid and in a recession it’s not an uncommon practice.”

A final notice letter is another weapon in your armoury said Paul. He added: “There are many templates to choose from but it’s best for the first one to be on your letterhead and delivered by post or hand with a copy kept and if posted – proof of postage. It should restate what is owed and that it must be paid immediately.”

“One conflict of interest can arise is that between the accounts and sales departments” If that doesn’t work then a letter from a specialist debt recovery agent in the printing industry, such as ICSM is the next step.

“It shows you mean business and is a further ramping up of pressure,” he said. “Many firms will pay up at this stage or seek terms to settle over time which is better than proceeding to court and legal.”

Some seasoned late payers won’t pay up without further action said Paul which is where a debt collector should be employed.

“We have had examples of debtors moving address, saying it wasn’t them who ordered the work, or even denying any responsibility,” said Paul.

“We have heard every excuse you can think of which is why you must keep comprehensive records of the steps you have taken in case it goes to court.”

If a visit from the debt collector fails then the company can then apply to a court for a judgement.

“We do this regularly for customers,” said Paul. “The law in Scotland and Northern Ireland is slightly different from England and Wales but essentially if you follow the court’s procedure you will get a judgement in your favour.”

If a matter goes to law and a judgment is obtained, how should

a firm then enforce the judgment (avoiding men of straw while obtaining accurate information of a debtor’s assets)? How should a bailiff be chosen (after all, they will be representing the creditor firm)?

After a County Court Judgement is granted the customer has a set time to pay up before enforcement can take place with bailiffs.

“By this time the relationship will have broken down with the customer,” said Paul, “but using bailiffs is the last resort as they cannot gain entry to a property to recover goods to the value of what is owed or to seek payment.

However if the premises is a business they can enter reception and ask for the owner to see them. It’s only at this point that some customers will pay up.”

Sadly some firms will choose to go into liquidation in order to avoid payment which is where gaining references and searching online the names of directors and business owners is worth doing before business begins.

“If a business already has a history of non-payment,” said Paul, “then it may show up in online reviews and reports by angry customers. Even before you start work with a new client, you should always check them out so as to avoid the heart ache of debt collection.”

A personal visit can also work, as a customer may be embarrassed by contacts with your firm but if you can catch them and speak one to one, face to face, they may offer to sort payment out immediately to save embarrassment.

Apart from debt recovery agents, what other techniques, processes and organisations can ensure that firms get paid (or don’t lose out)?

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Don’t stick your head in the sand when the bills pile up Human nature is the real reason why business people are in denial when they have a financial problem says Ian Carrotte (but there is a solution) Human nature makes many companies hide from difficulties - or is there something dishonest about liquidations?

Why didn’t the directors of Carillion, Thomas Cook, Jamie Oliver’s Italian and Debenhams see the crash coming?

It’s a question ICSM Credit are often asked about firms that fail leaving millions of pounds in unpaid bills in their wake. The answer is the directors are usually fully aware of the problems but simply hope either a miracle will happen or fight on in the belief they can trade out of the difficulty or are simply in denial.

Human nature tends to lead most people to bury their head in the sands to use the old ostrich analogy. As problems mount up the inclination is to ignore them by not opening letters for final demands, not answering urgent emails or avoiding 6

phone calls from creditors.

The same happens with creditors who hope their debtors who haven’t paid an invoice past 30, 60 or even 90 days will pay up. ICSM Credit regularly comes across members and associates who have outstanding invoices they have written off despite the debtor still running a business. It can be a case of feeling embarrassed at constantly chasing a business for payment. Perhaps they are family friends or the owner has been unwell and it feels insensitive to press for payment.

Certainly, ICSM Credit has heard all the reasons why firms allow unpaid invoices to eventually be written off and again it appears to be in part due to human nature. When asked if a firm has any outstanding invoices which they could do with help in settling there’s often a shrug of the shoulders and an unconvincing denial from the owners. Who wants

to admit someone has taken them for a ride?

Of course, there are the phoenix companies of this world who close down one day and open up the next claiming to be a new firm and failing to pay their creditors. It’s a grey area and many will say the practice is at best dishonest and at worst borders on the criminal.

Grasping the nettle takes courage but once ICSM Credit’s free micro debt service for its members is requested around 87% of invoices are settled.

The main reason being that when a debtor is contacted by a third party with a final demand and the threat of escalating costs they come to their senses and either pay up or speak to their creditor to arrange terms of payment.

Contact Ian Carrotte on 08448 54850 or email him on ian.carrotte@ icsmcredit.com to find out more ICSM News

Blood bath continues as firms go under (but they can avoid problems with ICSM Credit)

2019 is turning into one of the worst years for business failures but firms can protect themselves from the likes of Carillion and Thomas cook says Ian Carrotte Almost half a million firms and businesses in the UK have major financial problems with a record number of insolvencies registered at Companies House.

Research form insolvency experts Begbies Traynor revealed that in the property, construction, retail and leisure sectors in the third quarter of 2019 there was an 8% rise in companies teetering on the brink of insolvency.

Julie Palmer of the firm said: “Three years on from the referendum and the latest Red Flag research highlights just how businesses are struggling as a result of uncertainty and a lack of investment. With a considerable increase in the number of businesses suffering significant financial distress in the last three years, there is growing frustration among businesses that they cannot plan for the future and the whole economy is lagging as a result.”

A look at haulage and logistics listed as insolvent in The Gazette in only the last couple of weeks shows an alarming attrition rate for the sector.

Logistic Solutions North East Limited have appointed liquidators, there’s a winding up petition for Low Field ICSM News

Logistics Limited while GFH Logistics Limited and SCB Logistics Limited have appointed liquidators – and so the list goes on and on.

Ian Carrotte of ICSM Credit said: “The economy was prevented sliding into recession with a growth of 0.3% in the last quarter overall, but there are worrying signs. We have not seen so many firms going to the wall in the printing, haulage and construction sectors since the credit crunch in 2008.”

He said the factors included concerns over the outcome of the General Election called for December 12, the on-going wrangles over Brexit but also the global nature of the economy.

“The trade dispute between China and the USA is not helping,” he said, “business is crying out for some stability and until our politicians can get their act together over Brexit the blood bath of firms crashing and burning will continue.”

ICSM Credit helps to protect its members from the cold winds of the economy by keeping them abreast of news of ailing companies.

Ian Carrotte said: “Companies like Carillion can have a domino effect, as

if a company is hit with a bad debt like Carillion they may be unable to pay their suppliers and sub-contractors and so on down the line. Big firms going bust simply force more firms to go under – and that is part of the explanation as 2019 has seen some big names go down – and they drag others with them. That’s why joining ICSM Credit for less than a tank of diesel helps to keep firms in the know as to who not to allow too much credit and if possible avoid all together.”

ICSM Credit’s Free Micro Debt Recovery Service Let ICSM Credit do the chasing of those debts you would normally write off and if we can recover the debt, we will send it over to you minus a fee.

Micro debt recovery covers invoices less than six years old of up to £750.

If paid ICSM Credit’s fee is 40% of the amount with you receiving 60% of the original invoice. If nothing is received, there’s no charge. It’s not a debt collection service but a tried and tested system of emails, letters and reminders – and it usually works.

Contact Ian Carrotte on 08448 54850 or email him on ian.carrotte@ icsmcredit.com to find out more 7

They dump the debt and buy the former business for a song

Curse of the Pheonix Companies

ICSM Credit has seen the return of the Pheonix Firms as the economy gets tougher. Ian Carrotte says its time for the authorities to take action There is nothing more annoying for creditors of an ailing company to discover the business has closed one day and re-opened the next day under a new name, dumping the debts.

It’s an area fraught with legal problems as if an insolvent company is found to have acted improperly then a case of fraud can be brought against the directors or owners.

Writing in on his website Real Business Rescue, Richard Munnery said: “Phoenix company fraud occurs when existing directors transfer the underlying assets of their struggling company below market value, as the company approaches insolvency or when it has become insolvent.”

The usual practice is to sell the firm’s assets to their phoenix company denying the creditors payment when the old firm crashes.

When insolvency occurs it is found the old firm literally has no assets that can be sold to pay the creditors.

Their dismay is made worse when the directors open for business in the

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phoenix company claiming the new firm has nothing to do with the one that’s crashed. Many in the industry will recognise this practice from bitter experience and can even name directors who have made a career out of phoenix companies.

There are firms that openly tout for business offering struggling companies a path out of impending insolvency with offers of ‘PrePackaged Administration’ and ‘Pre-Packaged Liquidations’. They claim that these can lead to a secure, seamless transfer of the business to a new, debt-free phoenix

company using a Company Voluntary Arrangement (CVA) for as little as £2,750. For directors of companies who are losing sleep worrying about how their firm can survive another

cashflow crisis the temptation can appear all too great to pick up a phone and ask for help.

Of course there are phoenix firms that us the legal path of pre-packs as they are designed to find a buyer while under administration and there are those that have no intention of finding a new owner and plan to dump all their liabilities and emerge debt free like a phoenix from the ashes. Unfortunately, these rogues appear to be all too common these days and the situation is not helped by companies openly touting for business implying becoming a phoenix company is a ‘seamless and secure’ solution.

A note of caution for those considering a pre-pack – many creditors will refuse to accept them on the basis that see pre-packs as the 21st century name for phoenix.

As one finance manager told ICSM recently a pre-pack can allow a firm to dump debts giving it an unfair advantage on companies trying to trade by the rules.

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Who has hit the buffers - continued and office supplies division the Great Northern Envelope Company came to an end when liquidators were appointed.

The haulage and courier industries have not been immune to problems.

In London Linked Couriers entered liquidation and Ware Transport

(Birmingham) Limited based at the airport also came to an end.

In the news Bury Football Club has been wound up, while dominating the business update of course Thomas Cook holidays has left many a creditor out of pocket.

Runners and Riders Below is a collated list taken from the Government’s London Gazette of businesses in the industry who are experiencing problems in the last few weeks.

Runners and Riders

Who has hit the buffers in the last few weeks in our Runners and Riders?

The harsh winds of the economy have taken their toll of many firms in the printing industry this year along with those associated with it.

The most spectacular collapse was the 178-year-old travel firm Thomas Cook. It was not just the shock of the company’s prime position in the tourist industry, the loss of 20,000 jobs but also the hit their suppliers took. Millions of pounds of print have now been lost with one ICSM member in the UK managing to escape with only a minor debt in comparison to the hundreds of thousands lost by companies in East Europe and the Iberian peninsula.

While the Spanish Government opened a €100m credit line for hotels in the Balearic Islands hit by the collapse and the German Government offered £335m of financial support to the subsidiary Condor eyebrows were raised that the UK Government didn’t offer 10

something similar. Whether it was the £3.1m black hole in Thomas Cook’s accounts reported by the British press last month or whether the Government felt it was a lost cause we may never know.

It seems that every month or so another famous name is in trouble with concerns mounting over the future of Pizza Express for instance as administration looms while only in May Jamie Oliver’s Italian hit the buffers. In the print world the latest big name to go is Quinns Belfast Limited known as Quinns the Printer.

A creditors meeting has been called for October 15 at the Wellington Park Hotel where a vote will take place.

Related to the demise of the firm is an investigation by the Police Service of Northern Ireland (PSNI) and South Yorkshire Police into an alleged fraud within the Bradley Group who own the trading names of Quinnstheprinters.com website

Administrators Appointed

Antonio Costa Driving ltd 43728

Bendon Media North Limited 43733

Auto Medics Limited 43728

Berkeley Burke Sipp Administration Limited 43731

Britelec Network Services Limited 43728

Bespoke Design Interiors Limited 43721

Creative Print & Merge Solutions Limited 43745

Creation 360 Limited 43713

Deluxe Printers Limited 43728

Content Discovered Limited 43741

Douglas Printers Limited 43739

Matryx Limited 43731

Express Media World Limited 43713

Migration Solutions Holdings Limited 43717

Intermodern Lighting Limited 43727

Printoff Graphic Arts Limited 43740

Issuedesk Limited 43731

Sky Construction Group Limited 43713

J A Mitchell Haulage Limited 43731

Success Flow Digital Limited 43745

John Petrie Marketing Limited 43741

Tangentix Limited 43742

Liquid Intelligence Limited 43731

Techcel Limited 43732

MBI Design Consultancy Limited 43721

Temple Mill Engineering Limited 43727

Omega Media Limited 43718

Walker & Co Securities Limited 43731

Preston Recovery Limited 43727

Wildfire Social Limited 43718

Saunders Recovery Limited 43732

Yboo Limited 43741

Silicon fuel Limited 43731 Trafalgar Publishing Limited 43733

and Nicholson & Bass. Print Week’s Jo Francis reported that the police had confirmed that an individual was under investigation.

Compulsory Liquidators Appointed s 136 Banco Fleet Limited 43731

Liquidators Appointed

And also in the news is the paper merchant Aspenlink as the firm has gone into administration this month.

The question is – who will be next?

Bell Pottinger LLP 43731

A2B Stationery Limited 43718

Bell Pottinger Private Limited 43731

APT Print Limited 43725

Borough Educational Foundation 43727

Baron Cars Limited 43731

In the printing industry names that catch the eye include Creative Print & Merge Solutions Limited, Deluxe Printers Limited, Douglas Printers Limited, The Carlton Press (Sheffield) Limited and The Print Company (North West) Limited, while, as we go to press the 130-year-old printing firm Latimer Trend has gone into administration. And in print finishing Cirencester Print Finishers Limited have

Continentoil Limited 43727

Centrestage Technology Limited 43729

Gregsons Solicitors Limited 43727

Chris Hamley Saab Specialist Limited 43727

Quantum Corporate Services Limited 43727

Chesterfield Business College Limited 43728

MJSC Marketing Limited 43735

Citrica Resources Limited 43728

Roadside Retail Limited 43727

Cirencester Print Finishers Limited 43721

Sky Surveyors Limited 43728

CPL Print Limited 43735

Victory GP Limited 43727

Deluxe Printers Limited 43742

The signage and graphics industry also has had its casualties with The Sign & Graphics Company Limited hitting the buffers. In the stationery

Creditors’ Voluntary Liquidation Deemed in Consent Meetings

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WMD Design Limited 43740

Allied Wallet Limited 43731

Design and Materials Limited 43731

Acton Finishing (Stourbridge) Limited 43719 Apollo Print Services Limited 43740 ICSM News

Dorking Stationers Limited 43740 Express MOT Limited 43731 Express Media World Limited 43726 11

Runners and Riders continued Factory Media Limited 43735

GDA Creative Marketing Limited 43738

Fun by Design (Didsbury) Limited 43727

HMD Group Limited 43726

Great Northern Envelope Company Limited 43718

Intercos Marketing Limited 43725

Knight Print Management Limited 43727

Jerram Marketing Limited 43725

Linked Couriers London Limited 43727

JSL Marine Limited 43731

Linked Couriers UK Limited 43727

Lost Ink Limited 43740

Linked Couriers West London Limited 43727

MPI Offshore Limited 43728

Leisure Vehicle Repairs Nationwide Limited 43727

The Bath Marketing Company Limited 43725

Martin Edwards Print Limited 43713

Transnet Logistics Limited 43728

Mediacom 24-7 Limited 43726

Zingaro Designs Limited 43713

Metropolitan European Transport Limited 43728 Movell - The Bus Company Limited 43728

Petitions Dismissed

MBL Design Consultancy Limited 43732

Elite Taxi Garage Hainult 43728

North Star Global Logistics Limited 43731 Omega Media Limited 43731

Petitions to Wind Up

Polish Media London Limited 43713

Anzeck Packaging Limited 43725

Print direct (Maidenhead) limited 43717

Birds Eye Marketing Limited 43735

Russell Signs Limited 43738

Bookworld Limited 43719

Saunders Recovery Limited 43740

Bury Football Club Company Limited (The) 43728

TDP Direct Marketing Limited 43721

Coda Design Limited 43728

Terry Cooper Services (1985) Limited 43733

Gifts Spot Limited 43728

The Carlton Press (Sheffield) Limited 43714

House of Design Limited 43741

The Print Company (North West) Limited 43719

Ink and Arch Limited 43735

The Sign & Graphics Company Limited 43717

KG Solicitors Limited 43727

Thirty 30 Media Limited 43713

London Marketing Clinic Limited 43724

Totality UK Limited 43745

Matticulous by Design Limited 43745

Turnkey Office Limited 43725

Sprint Couriers (Southern) Limited 43721

Victoria Knight Offices Limited 43719

Sprint Couriers (Southern) Limited 43721

Ware Transport (Birmingham) Limited 43731

Victoria Knight Offices Limited 43727

Wentworth Designs & Interiors Limited 43739 Yorkshire Rescue Services (BFD) Limited 43728

Winding Up Dismissal Collings Finishing Limited 43734

Members Voluntary Liquidations

Sandhu Newsagents 43727

Alan Rogers Guides Limited 43741

Steve Pope & Son Transport Limited 43727

CEPF II Press Bristol Limited 43738 Color Steels Limited 43734

Winding up orders

Create Digital Media Limited 43738

Pixafusion Digital Limited 43713

David J Bevan Marketing & Supply Chain Consultancy Limited 43742

Regal Haulage Services Limited 43728

D.Pope Blandford Limited 43727 Devops Vision Limited 43728 EMag Media Group Limited 43745 Ethnic Media Sales Ems limited 43738 Gates Contract Hire Limited 43728 12

Stoneleigh Design Limited 43740 Vallgren Design Limited 43727 For information on ICSM visit www.icsmcredit.com or call 0844 854 1850. ICSM, The Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR. Tel: 0844 854 1850. www.icsmcredit.com. Ian.carrotte@icsmcredit.com ICSM News