UK companies offer one of the highest risks of payment default within Europe, according to Atradius study. 

 

Cardiff 30th August 2007 –  The latest Payment Practices Barometer from leading trade credit insurer Atradius shows that payment practices in many European industries deteriorated between summer 2006 and winter 2006/2007 with Britain showing clear signs that we are one of the highest scorers in payment default across sixteen main business sectors.

In eight of the sixteen sectors analysed, a percentage of respondents said that very frequently debts were not paid at all. Britain came second only to Italy where default occurred very frequently in 6 out of 11 sectors. Great Britain has been further shamed by the healthcare sector which has the highest recorded individual default rate, where 7% of respondents said that debts were very frequently not paid at all. This is followed by Italy ’s technology sector where 6% of debts were not paid at all. The government sector in Holland was least likely to not to pay at all with 85% saying they never default.

Shaun Purrington, Regional Director, Atradius UK and Ireland said:

“Current trading conditions across many sectors are bound to take their toll and ultimately this always shows up in the end payment schedule. Businesses wouldn’t survive without two things – risks and innovation- however we advise businesses to take every precaution to take calculated risks in well-considered areas of their businesses without jeopardising their revenues. No trader is exempt from the external factors which make all of us vulnerable.“

Payment practices in the transport industry in particular were rated more poorly by the 1,200 study participants throughout Europe than a year earlier. On average, businesses had to wait 53 days until their receivables due from this industry were settled – versus an earlier result of 43 days. The chemical and pharmaceutical industries also took significantly longer to honour their debts (59 versus 50 days). In the transport and finance sectors, the incidence of complete non-payment was higher in winter 2006/2007 than in summer 2006. The same applies to the manufacturing industry; however, the higher risk of bad debt loss in this sector contrasts with the considerably faster payment of outstanding accounts. On average, it took only 48 days (summer 2006: 60 days) for debts to be honoured .

The automotive industry showed the most distinct improvement with appreciably fewer defaults in payment and fewer bad debt losses than in summer 2006.

The industry special of the Atradius payment practice barometer is available free of charge at www.atradius.co.uk (Publications). The document contains detailed information on payment practices in the 16 most important European industries as well as country-specific analyses for Great Britain , Germany , France , Italy , Belgium and the Netherlands .

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About Atradius:

Atradius is a leading credit insurer with total revenues of around EUR 1.3 billion and a 24% share of the world credit insurance market. It insures more than EUR 400 billion of world trade annually against non-payment and provides a comprehensive range of risk transfer and trade receivables management services. With 3,500 staff and more than 90 offices in 40 countries, Atradius has access to credit information on 45 million companies world-wide and makes more than 12,000 credit limit decisions daily. It is “A” rated by Standard & Poor’s (outlook stable) and A2 by Moody’s (outlook stable).  For more information: www.atradius.com

For further information, please contact:

Atradius Corporate Communications

Jo Aaron, Senior Communications Manager,

029 2082 4873/07768 233338           

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