Banks right not to lend to the print sector claims industry analyst
Market analyst Plimsoll has come out on the side of the banks, claiming they are right not to lend to many print companies because the risk is simply too high.
Recent high profile failures in other sectors (namely the travel and construction sectors) show the danger of operating on micro profit margins and the same thing could happen in the print industry in 2011 says Plimsoll. Its research shows 617 companies in the market exist on profit margins of less than 1.5% with 428 of these making a loss. Any bump in the road will be enough to see them fail because they cannot rely on cheap credit to see them through anymore.
“Nobody should blame the banks for refusing credit to companies that might not be able to pay it back. Many companies are turning up at the bank saying ‘We spend almost as much as/more than we make’,” states the analyst. “If banks are to meet government and electorate demands to lend responsibly then many companies with consistently low margins pose too big a risk.”
The new Plimsoll Industry Analysis – Printers will tell you which companies are prospering, those set to be bought out and those heading for trouble – across the whole of the market and in the individual regions. It gives a performance rating on 1,000 companies and highlights those ripe for acquisition. Readers are entitled to a £50 discount. Call 01642 626400 and quote reference PR/PI42.
