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A quarter of the UK's debt collection agencies companies are struggling to
barely break even, whilst the three quarters are delivering outstanding returns,
claims a study published by industry analysts Plimsoll Publishing Ltd.
The research looked at the financial performance of each of the Top 260 UK debt
collection agencies, and has analysed their latest profitability figures.
It found a great discrepancy in the level of profitability and a worrying trend
for the majority of the companies’ analysed.
A quarter of the companies averaged only a -11.3% pre-tax profit margin, down
from last year when the average was 0.0%. The owners of these companies are
going through lean times with an average return on investment of only -31%,
falling from -1% last year.
In addition, almost one in six agencies have reported a loss for the year. For
18% of these companies this is now their 2nd year of loss making.
David Pattison senior analyst at Plimsoll commented: “We are seeing from these
numbers just how tricky the recent trading period has been for companies to
return a profit and how many are really struggling.
"Yet at the same time three quarters of companies assessed seem untouched by
recent cost increases and competitive pricing.
"They have been able to record fantastic results”
But three quarters of the 260 companies make 75% and are averaging an 40.1%
return on their investment.
In all, 16 highly profitably companies identified in
the analysis are enjoying their 4th consecutive year of profit growth.
Pattison added: “Losing money might not be a complete disaster for your
company, but it is likely to cause long term damage as your investment is
constrained and your ability to retain staff becomes compromised.
"These companies may well find that they will not be able to keep pace with
those companies who have the profits behind them to finance investment.”
The full 444 paged analysis contains a details of each of the 260 companies. It
is aimed at anyone with a commercial interest in the UK’s leading Debt
Collection Agencies companies.
Whether these are your customers, suppliers, or
competitors how many are now at a commercial disadvantage in the market and are
jeopardising their long term prospects?
Copies of the analysis are available for £350 from Plimsoll Publishing Ltd by
email to c.sherwood@plimsoll.co.uk or by calling 01642 626400.
Readers of creditcontrol.co.uk receive a 5% discount when ordering.
Source:
Credit
Control Journal
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