Another Construction Firm Neglects Credit Checks

14th February 2018.

Construction firm, Galliford Try, has seen their shares fall by 16 percent after it was forced to take sole responsibility for a joint venture the firm had been working on with collapsed construction giant, Carillion.

Galliford Try has announced plans to raise £150 million to complete the contract, which is to build a bypass in Aberdeen, set to open early next year. Galliford has said it is booking a £25 million exceptional charge because of the collapse and would need the £15 million to cover “additional financial obligations arising from this contract”. While the construction firm has insisted that the extra costs are not a sign of any financial misgivings on their part, some are not convinced, and ETX Capital has called the Aberdeen bypass contract a “fiasco” from start to finish.

Here at the Credit Protection Association, many of our members come to us for help with getting their business out of a scrape. This can mean the acquiring of big contracts that they cannot afford, or going into business with dangerous partners. By going into business with Carillion, Galliford put themselves, their suppliers,  and their reputation in danger. We urge all our members to check, double check and triple check, all their customers before signing on the dotted line.

Recent figures have illustrated that it wasn’t just Carillion that posed a threat to Galliford.  Last May Galliford said it would be hit by £98 million worth of unexpected costs after reappraising a number of infrastructure contracts, one of which was the Aberdeen project. This was an immediate red flag concerning the project, but the construction firm continued with it regardless.

Despite the dip in shares, Galliford revealed strong half-year results, with revenues up 14pc to £1.5bn in the six months to December.

Peter Truscott, chief executive at Galliford said: “The market continues to be positive, underpinned by good mortgage availability, the Government’s ongoing commitment to Help-to-Buy, and the recent stamp duty cut for first-time buyers.”

Keeping an eye on all areas of your business should be second nature to a manager. Whether you’re a credit manager or a shop manager, it is essential that you know what your finances are up to, as well as those of everyone who you do business with. Carillion’s collapse proved so devastating because the majority of its suppliers had assumed the company was doing well and were shocked to hear the contrary. Galliford Try was certainly shocked when it heard that Carillion had not only collapsed but had also left them sole responsibility for an expensive infrastructure venture. When you’re the owner of a business you can’t afford to be surprised and instead, you must have all the answers. Filling out credit reports, and completing regular monitored checks on your customers may seem like needless paperwork, but it will save you the bother of filling out insolvency paperwork in the long run.

Here at the Credit Protection Association, we encourage all our members to keep checks on their customers. This starts from when you first meet them and urge them to complete a Credit Application Form, to when you use our CPA credit report and monitoring software to confirm your new customers’ revenue and credit rating. We also encourage our members to take advantage of our disqualified director database to allow yourself the assurance that your customer is not on there. It is important you protect your business, whether it’s from insolvency, or from the insolvency of your partners.

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!

CPA on Linkedin

CPA on facebook

CPA on twitter

See all our latest news here!

Sign up here to our newsletter to receive periodic links to our best stories and blogs

Keep up to date with the latest news by following us on social media:-

 

Watch the video to find out how CPA can help you!

How to overcome 25 of the most common excuses for non-payment

Click the image to discover step by step advice on how to deal with them!

 

 

 

 

 

Discover how to improve your cashflow in 3 steps.

Click the image to find our answer to the question “How can you get paid on time?”

 

 

 

 

Read our blog – Debt collection agency

Read our Cash Flow Advice

Read about our overdue account recovery service

Read our blog – What is credit management?

Read our blog -What is a credit management company?

Read our blog -Credit Management that works!

Read our blog – How to select a debt collection agency

click to see read about our successes

Please call us on 0330 053 9263 to discuss how CPA can help your cashflow. Alternatively, either email us or use our contact form.

I consent to supplying my personal information that may be used for marketing purposes and agree with the privacy policy.