1-in-4 creditor meetings for construction sector firms

ONE-in-four of all creditor meetings held in the secondquarter of this year were for firms in the construction industry.

According to figures from Inter Company Comparisons (ICC Information) there were 229 creditors meeting held in the second quarter of this year with three out of four of these concerning Dublin-based companies.

There were no creditors’ meetings for companies based in Carlow, Waterford of Sligo, while there were 16 in Limerick, 12 in Galway and 10 in Cork and Mayo. While 59 meetings concerned the construction industry, 32 concerned wholesale, 26 manufacturing, 25 hotel and restaurants and 21 the retail sector.

ICC said that according to its last filed accounts the 229 companies had creditors of just under €200 million, split into creditors due €160m in a year and long-term creditors due €38m.

Head of account and business development at ICC Information, Michael Gannon said: “As we continue through these difficult times it is important to recognise the early warning signs that many companies show.”

He said that 84% of the companies had a current ratio of below one, which means that they could not meet their debts if called on to do so.

Also 64% also had a negative working capital, while 47% had a negative net worth.

“Adverse information like court judgments and audit qualifications are also primary indicators of insolvency,” added Mr Gannon.

ICC also said that 14% of the companies that held a creditors’ meeting in quarter two this year had at least one court judgment against them, while some had multiple judgments.