Experian insight reveals impact of recession on Irish business

News release:

Petrina Timoney / Laurie Mannix, MKC Communications 01 703 8600

Experian insight reveals impact of recession on Irish business

• Business closures outnumber formations for first time since 2002
• Dramatic increase in number of bank appointed receivers
• Increasing number of companies seek protection from creditors

Dublin, Ireland, 6 July 2009: Experian^®, the global information services company, today published new Irish business figures for January to June 2009. Experian’s analysis shows that, for the first time since 2003, the number of companies being dissolved has exceeded the number of new companies being registered with the Companies Registrations Office (CRO).

The analysis shows that there has also been a dramatic increase in the number of bank appointed receivers to companies in difficulty and a significant increase in the number of companies seeking protection from creditors by filing for examinership.

Between 1 January and 30 June 2009:

• More companies (523) went into non-members-voluntary liquidation than in any other period on record since Experian first began recording its business statistics in 1998.
• 79 companies were placed in receivership compared to 21 in the first half of 2008.  In total, 56 companies were placed in receivership during all of 2008.
• 53 companies sought protection from creditors by filing for examinership. This compares to 19 in the same period in 2008.
• 6,691 companies were dissolved compared to 6,627 new companies being registered with the CRO.  There were 20 percent fewer new company registrations in the first half of 2009 than the first half of 2008 (6,627 compared to 8,207).
• 527 companies held creditors’ meetings, 700 had judgements registered against them and 77 companies were subject to a winding up petition.

Jim Kennedy, Head of Operations, Experian Ireland, commented: “The effects of the global recession continue to cut deeply into Irish business.  In the current climate, cash is king.  Businesses that will emerge strongly from this recession are those that maintain excellent credit controls and use real time data and insight to decide whether or not they should do business with a customer or supplier.

“It is no longer sufficient to rely on out of date company accounts.  Newer tools such as payment performance data can be used to identify companies’ payment patterns and worsening payment trends.  These are strong indicators of the cashflow in a business and will not only indicate whether a customer is likely to pay, but also when.

“Reducing the risk of bad debts is critical for any company.  We recommend that businesses use as wide a variety of business information tools as possible to create an early warning system to alert them to customers or suppliers heading into difficulties”.