Retail sector overtakes construction as problem area for unpaid debt
New figures from business and credit information supplier, ICC Information show that the total value of court judgments against Irish companies for the recovery of unpaid debt rose by 24% – on a year-on-year basis – to just under €14 million in the third quarter of this year.
While the overall value of judgments has almost consistently risen since the beginning of 2009, the retail sector is now the largest problem area – responsible for €3.9m worth of judgments in the last quarter. It is the first time for more than a year-and-a-half that the construction sector hasn’t held that position. However, the three months to the end of September showed that construction-related firms still accounted for €3.3m worth of court judgments and 28% of all judgments.
According to Paula Carney, head of risk management solutions at D&B Ireland – ICC’s parent – the overall rising number of judgments should serve as a warning to businesses when extending credit and issuing loans.
“Court judgments are a serious indicator of a company’s financial situation, but also of the economy’s health. Some 23% of all those companies that called creditors’ meetings in the second quarter of 2010 had at least one court judgment against them and, so, all businesses need to be mindful when extending credit to companies.”
“As we try to get back on the road to recovery, it’s essential that businesses be more vigilant when extending credit and ensure that they’re only dealing with credit-worthy companies; therefore decreasing the likelihood of them incurring a bad debt,” she added.
Geographically, Dublin-based companies accounted for 25% of all third-quarter court judgment instances – amounting to nearly €3m in value in total.
Ultimately, no county was devoid of at least one court judgment, during the period, and as many as 14 counties saw a year-on-year increase in judgment values.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
