Archive

Archive for June, 2011

Its all Greek to me

http://www.inpharm.com/news/161074/greek-debt-hits-pharma-deliveries

Its not just the Eu that is getting tough with Greece. Its the Pharmaceutical company credit managers too. And when you see the figures, you can see why…

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Your favourite retailer? Habitat? Dixons?

Perhaps not…. But here is the list of those that are

http://www.thisismoney.co.uk/money/bills/article-1607919/Waitrose-is-UKs-favourite-shop.html

I suspect that the winner was not unexpected. And rightly so…

But when it comes to Dixons well i would suspect that they would only be loved by those who have a longing for shocking customer service and love spending their hard earned on extended warranties. And maybe this goes some way towards accounting for Dixons less than wonderful recent results. I wonder how mourned they would be if they disappeared from the high street? Well i dont wonder…

Habitat is a different matter. The group has apparently been losing money since 2005 and its place in the market has become squeezed by cheaper competitors. In many ways they are now a nostalgia brand and despite the administration and break up, they will not be disappearing altogether. But ultimately another iconic name from a different age has effectively disappeared.

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8597807/Habitat-collapse-puts-jobs-at-risk.html

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So how does Linkedin make money?

I suspect most readers of this are connected on this networks in one way or another and lets face it, it is a pretty decent site. I have wondered quite where it generates its revenue and heres the answer. Surprised me a little….
http://www.practicalecommerce.com/articles/2870-How-LinkedIn-Makes-Money-Behind-the-IPO-Numbers

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Beyond the balance sheet…

One of my best clients is a firm of lawyers who ask me to look closer at credit reports and accounts for businesses they are considering taking action against. Rightly they consider part of their service to their clients is to advise whether an expensive action is worthwhile

You may well ask why this is necessary with a credit report to hand. Surely the agencies provide the information you require?

The answer to that is sometimes yes, sometimes no. Most reports are a simple interpretation of ratios on a balance sheet, with some additional legal stuff. The key is to look behind the figures

A recent simple example was a hotel that owed a considerable sum. The report considered the busiess to be “even”. Fair enough but look closer and we see that was based on the current liablities more or less matching the fixed assets. The hotel didnt own the building so it is fairly safe to assume that these assets were fixtures and fittings. Now we had a problem…

Clearly if this was the case, the realisable value of some fitted bathrooms and reception furniture would be…. zero

Was that the end of story? Well it was worth looking a little closer. How was the business performing? How do we find that out?

The answer is Trip Advisor. If you dont know already, this is an extensive site giving users reviews of Hotels. And you can now perhaps imagine what we found. “worst hotel in london” “rude staff” “dirty” etc etc. Needless to say this was not a business going places.

A little further investiagtion found that the property was also on the market. So we now had a clear picture

The credit report said “even risk”. My conclusion? I think you can guess, but once again the value of wide ranging in depth credit assessment was proven. There is always a story beyond the balance sheet

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The most hated business?

http://www.mirror.co.uk/news/top-stories/2011/06/11/southern-cross-care-homes-workers-blow-the-whistle-of-true-impact-of-devastating-cuts-115875-23193510/
http://www.dailymail.co.uk/money/article-2002231/Southern-Cross-hit-fresh-debt-blow-future-hangs-thread.html

It would now appear that this unpleasant enterprise’s decision to cut rents to landlords is having a severe knock on effect (see Daily Mail article). It looks as if a domino effect is on the cards.

Also they would appear to be attempting to get leeway on VAT payments (a Times article I cannot link sadly) and there is seemingly an undercurrent of “what will happens to the residents if we go bust”. Not good…

Perhaps the most relevant article is the Mirror piece above. This is where it really hits home. We are dealing with frail and helpless people here. Is there anything more that needs to be added?

They come first, second and third in my book, bit the sooner this vile business is dead, the better

And this must not happen again

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Our GDP over the past 55 years

recession”>ttp://www.guardian.co.uk/business/interactive/2008/oct/22/creditcrunch-recession

A useful graph for those of us interesting in such things…

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Southern Cross …. opinions

This is probably the most concise and best summary I have read on this so far
http://www.telegraph.co.uk/finance/newsbysector/epic/sche/8556108/Southern-Cross-whos-to-blame.html

Followed by another very decent update

http://www.telegraph.co.uk/finance/newsbysector/epic/sche/8556612/Is-there-still-life-in-Southern-Cross.html

With this comment…

For Southern Cross to survive beyond the summer, it needs to persuade landlords not to repossess their care homes or call in the administrators in response to the rent cut. However, many landlords are already preparing to find new operators for care homes they believe are profitable with current rental levels.

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