£600m debt repaid in October – business news 1 December 2020.
James Salmon, Operations Director.
£600m of debt repaid in October, Arcadia collapses into administration, covid-19, Issa brothers in Caffè Nero bid, older workers delaying retirement, mortgage approvals at 13 year high, covid-19, market and other business news.
Here are CPA we want to share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.
£600m of debt repaid in October
Bank of England (BoE) data on lending shows that households repaid £600m of debt in October, the same as in September.
This means the total repaid since the end of March now stands at £15.6bn. Credit card debt has fallen by 13% over the past year, with consumers having reined in borrowing amid ongoing uncertainty around the impact of COVID-19.
The BoE report also reveals that borrowing using credit cards, overdrafts and personal loans fell by 5.6% annually in October.
Thomas Pugh, a UK economist at Capital Economics, said that while consumers and businesses were paying back credit, “the good news on vaccines means that businesses and consumers’ purses could be pretty full when regulations are loosened early next year, leading to a sharp rebound in consumption and growth.”
We care about this as for us our key role is to get debt repaid to our members. If you are owed money by your customers contact us to see how we can help get debt repaid.
Arcadia collapses into administration
Arcadia has gone into administration, putting 13,000 jobs at risk. The retail group, which owns Topshop, Topman, Miss Selfridge, Dorothy Perkins, Evans and Burton, has hired administrators from Deloitte to handle the process.
No redundancies were announced as an immediate result of the collapse of Sir Philip Green’s retail empire and Arcadia’s stores and websites will continue to trade as Deloitte considers all options available to the group.
Arcadia CEO Ian Grabiner, who said the collapse into administration marked an “incredibly sad” day for the group, said that while Arcadia had hoped to “ride out the pandemic and come out fighting on the other side”, trading conditions were the worst the group has ever seen and “the obstacles we encountered were far too severe.”
Matt Smith of Deloitte said coronavirus lockdowns, combined with “broader challenges” for high street retailers, had resulted in a “critical funding requirement” for Arcadia, forcing it into administration.
Meanwhile, Sir Philip has been urged to protect the pensions of Arcadia’s workforce amid reports of an estimated £350m deficit in its pension fund. Separately, HMRC missed out on becoming a key creditor in the collapse of Arcadia by a matter of hours, with the partial return of crown preference, a rule which moves the Revenue up the repayment queue in insolvencies, coming in to force today.
Issa brothers in Caffè Nero bid
Mohsin and Zuber Issa, the brothers who last month agreed a £7bn deal to buy Asda, have offered to buy Caffè Nero and pay off its debts to landlords in full, proposing a deal just hours before creditors were due to vote on proposals that would see Caffè Nero’s rent bill slashed.
However, following discussions with lenders, the café chain’s bosses dismissed the bid and have vowed to continue with the proposed CVA. Under the CVA proposals, Caffè Nero’s landlords are set to get 30p for every £1 worth of rent they are owed, with KPMG appointed in September to help the business negotiate reduced rents.
Older workers delay retirement due to pandemic
Research from pensions firm Smart shows that more than a million older workers have delayed their retirement due to the blow the coronavirus crisis has dealt their finances. The report says that around one in seven people aged 55 and above will continue working longer than they had planned due to the pandemic, with this equivalent to around 1.06m workers.
A report from the Financial Conduct Authority shows that over-55s have been just as likely to lose their job as the under 40s and have seen larger pay cuts on average, with the typical worker over the age of 55 having seen their income fall by 23%.
Mortgage approvals at highest level in 13 years
With Bank of England figures showing that 97,500 home loans were approved by lenders in October, UK mortgage approvals are now at the highest level since 2007. The Bank said approvals for home loans were more than 5,000 higher than in September and a third higher than in February, the month before the UK entered its initial coronavirus lockdown. October’s total marks a steep increase on the low of 9,400 recorded in May. The figures also show that mortgage borrowing hit £4.3bn last month, pointing to a recovery from the pandemic-driven downturn that saw borrowing slip to £200m in April. Pantheon economist Sam Tombs said the Chancellor’s decision to suspend stamp duty on properties worth up to £500,000 until March had “turbo-charged” the market. He added, however, that the housing market “remains set to weaken sharply” after the stamp duty holiday comes to an end.
Covid-19 general news
The UK added 12,330 new cases yesterday and had an addition 203 deaths.
Globally 506,078 new cases were added to bring the total above 63.2 million while deaths climbed to 1,469,835.
Moderna is filing for US and European emergency regulatory approval of its coronavirus vaccine so that it can be recommended for widespread use. Regulators will look at trial data for the mRNA vaccine and decide if it is safe and effective enough to recommend for roll out. Clinical studies show the jab is more than 94% effective at protecting people from becoming ill with Covid-19.
Covid-19 infections fell by 30% during England’s month-long lockdown, according to a study by Imperial College and Ipsos MORI. Between November 13th and 24th there were 96 infections per 10,000 people, compared with 130 in the fortnight before the lockdown.
MPs will vote later on the government’s proposals for stricter tiers across England after a debate in the Commons. More than 55 million people will enter the two toughest tiers at midnight tonight if the plans are approved. A number of Conservative MPs have criticised the Covid-19 restrictions, saying the “wheels are coming off the government’s arguments” to impose them. Labour looks set though to help the vote get through.
Boris Johnson will promise cash grants to traditional English pubs forced to shut under new pandemic rules as he seeks to persuade critics in his party to back him in a vote on Tuesday.
Dr Fauci has warned that America should prepare for a “surge upon a surge” in C-19 cases as travellers return home from Thanksgiving holiday.
U.S. health authorities found evidence of infection in blood donations collected by the American Red Cross in mid-December 2019 from residents in nine U.S. states, giving evidence that Covid-19 had started its global spread much earlier than previously suspected
Workers at London’s Heathrow Airport started a one-day strike in protest over wage cuts and new contracts put in place to reflect the impact of the Covid-19 pandemic.
Markets.
Markets corrected back yesterday after last weeks positive swings as US investors returned from the thanksgiving holiday. The FTSE 100 fell 1.6% to 6266 and the 250 dropped 0.7%, Germany was down 0.33% and France fell 1.4% as the Eurostoxx 50 fell 1%.
The pound was at 1.117 Euros and 1.335 US Dollars. Brent crude dropped 1.4% to $47.5 and gold dropped 0.4% to $1780
The absence of positive news on Brexit is starting to cause concern given the now very tight time frame and apparent brinkmanship on the UK side. Foreign Secretary Dominic Raab has claimed that progress is being made ahead of the EU Summit next week.
The US Federal Reserve has extended its lending facilities through to the end of March 2021, with the approval of the US Treasury.
The OPEC plus meeting has identified key disagreements in oil production management between the UAE and Saudi Arabia causing the drop in oil prices as there was concern over whether the group would agree to an extension in production cuts. Talks have been delayed by 2 days to give them a chance to negotiate.
Bitcoin soared to a new all-time high, surpassing its December 2017 peak.
FTSE 100 tax burden hits decade high
Analysis by PwC shows that FTSE 100 firms have been hit by their highest tax burden for a decade. The report shows that, with profitability down amid a slowing global economy, total tax rates imposed on blue-chip companies as a percentage of profit hit 47.9% in the year to March 31. This is the highest level since 2010 and is up from 41% over the previous 12 month period. PwC estimates that total taxes paid by FTSE 100 firms stands at £84.1bn, a total that represents 11.3% of Government receipts. While £26.9bn was a direct cost to the companies involved, the rest was collected by the businesses and passed on to the exchequer on behalf of others, with this including income tax and national insurance contributions owed by staff. Much of the data in the PwC report covers the period before the coronavirus crisis, with the firm saying it expects the pandemic to deliver a further dip in profitability a nd tax contributions next year. Andy Agg, chairman of the 100 Group’s tax committee, comments: “This study shows that despite challenging economic conditions, the total tax contribution from large companies remains significant.”
CGT take climbs as Sunak mulls reform
Government figures show that HMRC pulled in £72m in capital gains tax in October, marking a steep increase on the £4m recorded in October 2019. With analysts suggesting that the levy could be set for reform as Chancellor Rishi Sunak looks to help foot the nation’s coronavirus bill, it has been suggested that the take from the tax may have spiked due to people selling assets out of concern rates could rise in 2021. It has been suggested that CGT rates could be increased to align more closely with income tax, with the Chancellor considering the outcome of an Office for Tax Simplification (OTS) report on CGT he commissioned. The OTS suggests a rethink of CGT could raise £14bn for the Treasury.
Auditors move to ditch risky clients
Hannah Godfrey looks at auditors terminating contracts with clients in compromising circumstances, pointing to recent examples and saying that while the reputational risk of being associated with such businesses has been given as a possible explanation, some experts believe such moves are more to do with conflicts of interest. She goes on to explore how qualifying an audit could harm client relations and bring litigation risks, “so it is safer to ditch clients instead”. Ms Godfrey says auditors “have not enjoyed positive press in recent years”, having been linked to a number of corporate failures – and notes that Financial Reporting Council scrutiny found that the UK’s seven leading accounting firms failed a third of quality tests this year. Jonathan Fisher QC, a barrister at Bright Line Law, says: “I think there is a greater degree of caution being taken as regarding existing clients and in terms of making new relationships, and I think it’s being driven by a risk of litigation and regulation”.
Zoom
Zoom posted revenue of $777.2m, up 367% on the same period last year. The video conferencing app posted profit of $198.4m, or $66 per share, from just $2.2m last year. The figures came in ahead of analysts’ expectations as the video platform continued to benefit from the shift to home working.
Chinese PMIs
China’s manufacturing purchasing managers’ index rose from 51.4 in October to 52.1 in November, its highest in more than three years in a sign that the world’s second-biggest economy is recovering from covid-19.
Don’t let Covid-19 bust your business!
It will if your cash flow dries up, either sooner or later.
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for sometime to come.
We get debt repaid.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.
To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.
- The annual package costs start at very low rates
- A minimum performance warranty is provided
- Several complimentary services included
Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).
A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?
Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.
It takes less than 17 minutes to see how you would benefit, do you have the time now?
No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
Do you sell on credit?
With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.
Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.
You can’t just assume your customers can and will pay you eventually, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
CPA help get debt repaid!
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
We get debt repaid.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply on credit, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
You might be hesitant about contacting a debt collection agency. What are they going to be like?
Can they help your particular type of business?
There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.
We get debt repaid!
Debt collection agencies are not all alike.
Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!
At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.
The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.
We are polite, firm and efficient when it comes to recovering outstanding debt.
We get debt repaid!
“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire
“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years. We get debt repaid!
We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs, with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
You put up with the PAIN – now claim the GAIN!
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Did you know that your business is entitled to a minimum of £40 for every commercial invoice paid late to you over the past 6 years?
How many of your invoices are paid late each month – 20, 50, 100 or more?
At £40 per invoice that’s claim of £57,600, £144,000, £288,000 plus interest. The more invoices the bigger the claim!
At £100 per invoice it’s £144,000, £360,000, £720,000 plus interest.
For over 20 years, CPA has calculated and recovered Late Payment Compensation on behalf of Clients!
Yes, CPA can help you boost your business cash-flow.
Don’t let your bankers control you, contact CPA today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Do you realise you could be sitting on a fortune?
Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.
If you sold B2B on credit then there may be a hidden source of capital you can call on.
If you fancy an extra bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.
Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.
We can help you uncover the pile of gold, you didn’t even know you were sitting on.
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.
Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.
You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.
That compensation could provide the cash boost your business needed.
But don’t delay, that compensation evaporates if not claimed within six years of the late payment.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
Those former clients who regularly paid you late can finally be made to pay.
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.