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Troubled Times for the Print Sector

Troubled Times for the Print Sector

Red Flag Alert recently contributed to the BPIF’s latest Printing Outlook survey for Q4 2019. The BPIF (British Printing Industries Federation) is an industry-leading trade association that provides business support and solutions for those working within the UK print, packaging and graphic communication industries.

Key findings of the report:

  • The third quarter of 2019 was a difficult one for the UK printing industry – both output and orders were disappointing, and there was no repeat of the seasonal boost experienced last year.
  • Brexit remains the most voiced business concern, with 69% of respondents selecting it as one of their top three business concerns (up from 61% in July).
  • UK consumption of printing papers and boards in Q2 2019 fell in comparison to both Q2 2018 and Q1 2019. 

Orders and outputs are now expected to remain subdued in Q4, so an election surge will be well received.

Red Flag Alert’s Findings

Red Flag Alert data for Q3 2019 found that financial distress is prevalent across the Print and Printed Packaging sectors. The report shows that the count of ‘critical’ reports (County Court Judgments totalling £5,000 or more and/or Winding-Up Petition related actions) was 15 in the third quarter of 2019 – an increase from 13 in Q2 and equal to the level recorded in Q3 2018.

Although 2,062 companies in the industry remain under ‘significant’ distress (i.e. facing a court action and/or having poor, insolvent or out-of-date accounts), this is a decrease of 1% from Q2, and is 1.1% lower than Q3 2018. The number of companies categorised in our financial health chart as being in a strong and secure financial position was 42% in Q3; an encouraging increase from 27% in Q1 2011.

However, the number of companies representing an average credit risk and a weaker financial position has increased from 18% to 28% since 2011. The number of high-risk companies – which includes those with poor credit scores and/or companies that have undergone insolvency or have a striking-off action registered against them – has also increased. Although this section represents a small portion of companies, it has grown from 3% to 8% between 2011 and 2019. 

Mark Halstead, Partner at Red Flag Alert, said:

“The uncertainty over Brexit has taken its toll on UK businesses over the past three years. The print industry is by no means immune, and the data shows that tough economic conditions are putting more and more companies at risk. Supply chain issues will cause businesses to suffer as they struggle to plan for an uncertain future.”

Red Flag Alert is the Perfect Tool to Mitigate Risk

Whether you are in the printing sector, or any other sector, minimising risk to your business is essential in today’s uncertain economic climate. If you’re worried about client payments or supply chain issues, the best way to safeguard your business is to gain visibility on the financial health of the businesses you work with.

Red Flag Alert uses a flag rating system to indicate how likely a business is to fail within the next 12 months. The more flags, the likelier the business is to fail.

Our data is updated over 100,000 times daily, and these changes can be linked directly to your CRM via the Red Flag Alert API, meaning that you will be immediately aware of any change in circumstances that affects the health of your clients or suppliers.

Why Monitoring is Key

Monitoring is crucial for any business, large or small, as it enables you to take preventative measures to mitigate risk. The failure of one business in the supply chain can often have a domino effect on the others, increasing the risk of debt and ultimately insolvency.

Noticing when one of your clients is at risk due to a client further up the supply chain facing insolvency enables you to act quickly and protect your own business.

As well as letting you know when a client is in trouble, our data can also tell you when they are doing well. This can be profitable, as it prompts you to get in contact with them when they are most likely to be receptive to your business.

For more information about how Red Flag Alert can help you to avoid risk and safeguard your business against the future, sign up for a free one-hour consultation by contacting Richard West on richard.west@redflagalert.com or 0344 412 6699.

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