Category: Uncategorized

Good credit rating

Firmly established over 35 years

Approx. 240 employees

Positive Net Assets

You don’t always see it coming so it is important to have companies pay your invoices on time to reduce the value of any potential bad debt.

Michael J Lonsdale, one of the UK’s largest M&E contractors, has appointed administrators.

The company, which has offices in London and Langley, Berkshire, was founded in 1986 and turned over more than £2.9bn in almost 40 years of trading, working on major project such as the 51-storey 8 Bishopsgate tower and the Paddington Cube in London.

It turned over £191m in the 12 months to 30 September 2022, making a £2.5m profit – down slightly from £2.7m a year previously. At the time independent auditors for the company said they could see nothing which cast significant doubt on the company’s solvency.

However, on Monday (2 October) the company collapsed, appointing insolvency practitioners from Begbies Traynor to sell-off the company’s assets in a bid to recoup money for creditors.

Michael J Lonsdale’s approximately 240 staff were told in an email from the company’s management, which asked them to return company IT equipment. Administrators are expected to make most of the company’s staff redundant.

Michael J Lonsdale was the 77^th largest UK construction company, according to the CN100 2023, and the seventh largest M&E contractor according to the CN Specialists Index 2022. It operated in sectors including pharmaceuticals, commercial offices, fit-out, education, hotels and leisure, rail and data centres.

In financial results for the year to 30 September 2022, published in July, the group said: “The post-Covid economy has brought its own challenges with over inflation resulting from an increase in utility prices and the war in Ukraine.

“Michael J Lonsdale has approached these economic conditions by adapting internal approaches to ensure they are robust and aimed at protecting the margin on jobs and working closely with the supply chain to adhere to project programme”.

The group was working on ongoing projects including the University College London Queen Square Institute of Neurology, which is due to be completed in July 2024.

Rising interest rates can have a significant impact on credit control.

When interest rates rise, it can lead to increased borrowing costs and cash flow problems.

This can make it more difficult for businesses to manage their cash flow and avoid bad debts.

However, there are also some benefits of higher interest rates.

For example, the amount of statutory interest you are legally entitled to for late payments increases.

The Late Payment of Commercial Debts Act gives you the statutory right to claim interest from your customers in the event of late payment of a commercial invoice.

The amount of late payment interest you can legally charge is 8% plus the Bank of England base rate for business-to-business transactions which currently sits at 5.25%, so the late payment interest you can charge would be 13.25% of the total invoice value, up from 13%