December 13 2011
Byron Crellin, CEO at dbs, talks about the UK’s recessions over the past couple of decades and how firms struggle on business turn-around and the key reasons why so many fail.
There are many commercial victims in a recession but in these days its business and financial awareness experience that counts. Cost cutting and conserving cash to survive are the immediate factors to any business survival, however trends now show us that it’s after a recession when many will face the real issues of existence.
Experience and trends have demonstrated that trouble starts with the actual first hint of market recovery….the reality being that businesses have nothing in reserve.
Companies have enjoyed some suppress by various support measures including payment arrangements with landlords on outstanding commercial arrears. At dbs we have seen a steady increase in the number of Protective Distraints and payment-plans being administrated by the team, in fact a more interactive relationship with debtors has been created as landlords and managing agents look to support and protect their portfolios. Other notable measures assisting businesses have been the HMRC Time-to-Pay schemes and banks being more available and ready to listen to their customers' requirements. These factors have been a helpful combination of positive influences, however arguably muted as things return to a post-recessionary like normality.
As consumer and business confidence is at rock bottom the pressure to perform in the fourth quarter is paramount. Commercial landlords must act promptly and efficiently against businesses showing signs of distress to secure their position over the assets. With over 4,000 clients currently using Red Flag as a mechanism to monitor the financial activity of tenants, those commercial businesses with damaged balance sheets and poor trading will be captured as high risk and subject to failure. In using Red Flag, dbs clients are able to establish those potentially at risk. Those commercial tenants will require the on-going assistance of landlords to support them through this period with fragile balance sheets and a declined profitability.
In our recent free download (the Red Flag Quarterly Property Report) we documented the geographical market sectors and company insolvencies. In the third quarter of 2011 company insolvencies were at a 30 year record low, insolvent liquidations which make-up 80% of all insolvencies were just 0.7% of active companies.
The recovery phase for businesses must be managed and, as stakeholders, the need to retain visibility to track these changes is vital. At dbs we have seen a proactive turn-around with clients using such tools as Red Flag to act appropriately in order not to come away empty handed.
We pride ourselves on turn-around recovery services, either at the pre-enforcement or Warrant execution stages and are rapidly winning clients on recommendation and referral instructions. dbs has worked hard over the last two quarters to deliver exceptional collection rates and have achieved this through helping clients identify and manage risk at early stages, which in turn means the dbs team has been able to act more efficiently and recover debts before clients enter in to administration.
Key reasons why dbs are becoming a significant service support partner of choice;