Creditor meeting surge led by construction sector

THERE continues to be a surge in the number of creditors’ meetings being held, with the construction sector still dominating.

There was an increase in the number of creditor meetings in Cork last quarter jumping from 10 to 31 while Dublin-based companies accounted for just over half of all meetings at 124.

Almost a quarter of the 238 creditors meetings that were held in the three months to the end of September concerned the construction industry. Close to 15% were for firms in the retail industry.

The figure is up from 229 meetings in quarter two and 211 in quarter one, according to ICC Formations.

There were no creditors meetings held in Monaghan, Donegal, Kilkenny, Leitrim and Mayo but there was also a large increase in Louth and Offaly over the previous quarter.

The companies that held meetings have creditors of nearly €280 million, an increase of just under €80m from quarter two 2009.

After analysis of the companies involved ICC Information found that there were several common indicators of failure.

Early warning signs can be recognised, according to Michael Gannon, head of account and business development at ICC Information.

A fifth of companies that held a creditors meeting had at least one court judgment against them.

“Only 32% of these companies had a positive working capital whilst only 40% had a positive net worth. Typically companies with multiple indicators of insolvency are the ones at greatest risk.

“It is essential to manage your current ledger and understand the risk associated with extending credit to certain companies,” he said.