Debt judgments show an increase

STRUGGLING firms in Londonderry accounted for the second biggest increase in debt recovery judgements in Northern Ireland over the past year.

A new report reveals that the number of County Court Judgments (CCJs) against Londonderry companies for the recovery of unpaid debt increased by 110 per cent between the last quarter of 2008 and the last quarter of 2009. This compared to a province-wide increase of just 34 per cent over the same period.

Thirty eight judgments were made against Londonderry companies in the last quarter of 2009. The total value of these judgements was 77,090. This was up from 36,758 in the corresponding quarter of 2008.

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Throughout 2009 there were 127 judgments against Londonderry firms at the County Court with a total value of 616,276.

Figures for Northern Ireland as a whole show that Quarter 4 saw an increase from 673,000 in quarter 4 2008 to just under 900,000. This brings the total value of CCJs in 2009 to 4.6million, with 1,042 CCJs lodged, compared to 3.8million with 713 CCJs lodged in 2008.

The data also shows that despite Londonderry posting one of the biggest increases over the year it has a relatively small amount of judgements compared to elsewhere.

Antrim companies accounted for the majority of CCJs in quarter 4 2009 with 53 per cent (477,493), followed by Down with 16 per cent (145,654) and Tyrone with 12 per cent (104,098).

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The lowest offenders were companies based in Fermanagh with 3 per cent (27,086), Armagh with 7 per cent (66,826) and Londonderry with 9 per cent (77,090).

Comparing Quarter 4 2009 against Quarter 4 2008, Tyrone was the only County that saw a decrease in the Value of CCJs.

All other Counties in Northern Ireland showed an increase in comparison to the same period in 2008, with Fermanagh companies showing the biggest increase with 119 per cent, followed by Londonderry with 110 per cent.

The Construction sector accounted for the majority of CCJs with 32.4 per cent, followed by manufacturing with 12 per cent.

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Finance, Education and Mining and Quarrying were the lowest offenders with less than 1 per cent each.

Telecommunications, Agriculture, Electricity, Gas and Water, Health and Social Work and Public Admin didn’t receive any CCJs in Quarter 4 2009.

“CCJs against companies are a useful barometer of corporate financial health and are a leading indicator of insolvency,” explained Michael Gannon, Product and Marketing Leader at Inter Company Comparisons Information, a firm dedicated to serving the legal and accountancy professions with company formations and company secretarial services.

‘’2009 has seen a total of 4.6million worth of CCJs against Northern Irish companies, an increase of 800K on 2008, or 21 per cent.

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“This highlights that companies still need to be extra vigilant and ensure they understand the Credit History of the companies they are dealing with, and ensure that they are doing ‘good’ business with appropriate Credit Terms, so as to best protect their own ledgers and cashflow,” added Mr Gannon.

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