Archive for February, 2011

The Arab spring

It is difficult to comment on the remarkable events in the arab world without a political angle and it does seem rather premature to discuss the finance/business aspect at a time when millions are seeking their rights and freedom. Rather as if one was to be preoocupied with the loss of the Formula one bore in Bahrain

But these are interesting times and there are a few thoughts that spring to mind. I will start with just one for now.

Where will the Tunisias and Egypts of this world turn for inspiration? Gleeful commentators have pointed out that 82% of Egyptians have a “negative view of the US” but is it more complicated than that?

Over the weekend there were large protests against the islamist sects in Tunisia and I suspect that those involved in the revolution certainly do not want to swap one form of dictatorship for another (even worse) one

Their inspiration has not been Bin Laden or the Ayatollahs. It has come from the freedom delivered by that most western of innovations, the internet

The alternative powerbases to the US are the EU and China. Without commentating too much on the pros and cons of these two economic units, I wouldnt be at all suprise to see the strong commitments to freedoms, unity of purpose and dynamism of the US trumping the delights of Brussels or Beijing.

And I believe Obama can reach out

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It was the computer guv…

 Perhaps this was the scene at Auto Windscreens head office ? And maybe they should have branched out into repairing computer screens rather than car windscreens. Plenty of internal business given the stories we are hearing

So Autowindscreens collapse was due to the IT. That is what we are being told by Delloites. Heres a very good piece

So who or what do we believe? Frankly I cant help thinking that putting the blame on an apparently less than wonderful IT service is just a little too conveniently exonerating the possibly less than wonderful management. A bad workman etc etc etc

Of course poor systems can lead to cash being tied up in the worng areas of the business, but were the controls really so catastrophic that any business would have been bought to its knees? I suspect we will be hearing more about this…

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HMV The future?

Good article setting out various options…

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Return of the Zombies

February 6, 2011 1 comment

Interesting comments from a corporate recovery director regarding “zombie companies”, ie businesses staggering on as the “living dead”

In the 1990s, the peak in company liquidations was a year and a quarter after the return to growth

and the full article is here:

There have been a number of comments in various areas about how insolvencies have fallen year on year and how this is (presumably) a start of a positive trend. Very good news perhaps and I more than many people like to see the glass as half full rather than half empty…

But for the reasons stated in that concise article, my glass is a half empty pint of stale bitter

One skill any credit manager should have is the power of foresight. That sounds rather grand and it doesnt mean consulting Russell Grant to determine whether this or that company is going to breach its covenants. But what it does entail is understanding how businesses survive or unravel.

The fact is that companies rarely “collapse”  (as the press would have it). the death is often a fairly slow one and rather painful too. Having worked for two medium businesses that went into receivership, I have had a close inside view. Very valuable experience

The article neatly pinpoints the reasons why, but in addition to the bank lending, HMRC and interest rate factors, the plain fact is that many businesses are dead long before the last rights are administered.

Unfortunately bad debts are going to be a serious fact of life for the forseeable future and the  living dead are still out there?

Is your (or your clients) balance sheet hreatened by zombies?

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Something different…

February 2, 2011 1 comment

For reasons I cannot really explain, I have a fascination with the websites that have photographs of derelict sites around cities. The above site is a cut above being based around an exhibition and carrying some hauntingly evocative photography. It is certainly worth a look…

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