On the Spot

We are delighted to once again welcome Kirsten Tompkins back on the show. Kirsten is a Market Analyst and Content Creator in Turnaround and Restructuring at EY-Parthenon, the strategy consulting arm of EY. Kirsten is the coordinating editor and data analyst for EY-Parthenon’s Quarterly Analysis of UK Profit Warnings. Kirsten joins the show to discuss the latest Q1 2023 report, 'On a Knife Edge'. Revised forecasts show that the UK economy is on track to avoid a technical recession in 2023, but EY's profit warning data suggests it could be experiencing a ‘rolling recession,’ where waves of pressure cause individual parts of the economy to contract in turn. Banking stresses and higher-than-expected inflation also serve as a reminder that the recovery is still on a knife edge. Profit warnings rose dramatically in the technology and telecommunications sectors in Q1 2023, as uncertainty and cost pressures continued to pass down supply chains. 35% of profit warnings in Q1 cited contract delays or cancellations. Although recession has moved off the agenda, the range of possible outcomes is wide, and uncertainty remains a significant challenge in 2023.

SCHUMANN, headquartered in Göttingen, is a German family-run company that offers consulting and IT solutions in the areas of credit risk, compliance, and portfolio management systems. Lara Biermann is Head of Sales Credit & Surety at SCHUMANN and advises and supports international credit risk insurers, and surety bond providers, in digitising and automating their risk and business management processes. Craig Evans sat down with Lara to discover more about the role she fills at SCHUMANN, and the winding career that brought her there. Lara speaks about the key risks that her clients are facing, in particular credit insurers, and how SCHUMANN helps to solve them with risk analysis software that makes sense of the vast overload of data in 2023.

Iron Mountain is a global business dedicated to storing, protecting and managing, information and assets. From critical business information to geological samples, works of fine art, and even the Iron Throne from the hugely popular Game of Thrones series! Nick King is a Senior Order to Cash Integration Manager for the MENAT region focused on billing, cash applications, disputes and cash collection. Nick leads order to cash teams across 12 countries. Craig Evans sits down with Nick to gain insight into his world, the role he fills at Iron Mountain, and the career that brought him there. Nick has a strong background in credit management and sheds light on the ins and outs of the industry, offering a unique perspective gained from years of experience. Learn what the hot topics in credit risk are for Iron Mountain and why spotting risk at the onboarding stage is critical.

Courtney Rickert McCaffrey, Global Insights Leader at EY's Geostrategic Business Group, joins Adam Stones for episode 6 of 'On the Spot'. The EY Geostrategic Business Group uses geopolitical insights and analysis to help clients inform their business operations and strategy. Courtney is a recognised thought leader in the political risk and global macro trends space and is based in Washington, DC. Courtney's role as a Global Insights Leader is to drive research, analysis, and insights for publication, such as the 2023 Geostrategic Outlook - which forms the cornerstone of this episode's discussion. Adam and Courtney explore the current geopolitical environment and discuss how companies can build a more robust strategy for an increasingly volatile world. Geopolitical developments are likely to continue to influence supply chain strategies, shift investment destinations and push up costs for companies throughout the year. Take a look at the top 10 geopolitical developments EY's Geostrategic Business Group have identified to have the most significant impacts on organisations across sectors and geographies in 2023.

Sue Chapple, Chief Executive of the Chartered Institute of Credit Management (CICM), joins Craig Evans for episode 5 of 'On the Spot'. The CICM is the largest recognised professional body in the world for the credit management community and is the trusted leader in its field representing all areas of the credit and collections lifecycle. Sue has over 25 years of experience in operational credit management across finance, utilities and the public sector. We explore the world of credit management with Sue and learn more about her life and career, which has led her to become Chief Executive of the CICM. Good business practices, improving cash flow, and the future role of technology in credit management are all hot topics in this episode. AI-powered credit scoring certainly has a bright future in the credit industry, and Craig shares how Company Watch is leading the way with innovative tools that are making the best use of the technology. Sue explains how the CICM continues to help support businesses in an increasingly difficult economic environment, where risk is becoming harder to predict, and paying on time is still as important as ever.

UK-listed companies issued 83 profit warnings in Q4 2022, bringing the total number of profit warnings to 305 in 2022 (50% higher than in 2021). We were delighted to once again welcome Kirsten Tompkins back On the Spot. Kirsten is a Market Analyst and Content Creator in Turnaround and Restructuring at EY-Parthenon, the strategy consulting arm of EY. As the coordinating editor and data analyst for EY-Parthenon’s Quarterly Analysis of UK Profit Warnings, Kirsten joins us to discuss the latest Q4 report, 'Universally Challenged'. It's clear in the report that profit warnings are coming thick and fast from across the economy, as cost pressures pass through supply chains, falling confidence hits spending and contract renewals, and credit tightens. For the first time since 2009, credit tightening triggered over 10% of warnings in a single quarter in Q4 2022. Unsurprisingly, consumer-facing companies still led profit warnings in Q4 2022. Changing consumer behaviour and the cost-of-living crisis will no doubt keep the pressure on consumer sectors throughout 2023. SMEs have taken the main brunt of economic pressure so far. But in such febrile markets, stress is contagious, and no company or sector can really consider themselves immune...

Kenny McKay, Managing Director at Interpath Advisory, sat down with our CEO, Craig Evans, in the latest episode of On the Spot. Interpath is a financial advisory business with a broad range of specialisms helping clients to face challenges or to find new opportunities to grow. Kenny specialises in the transformation and restructuring of organisations, in both the public and private sectors, and leads their Northern team and industrials practice. Kenny talks about his career and experiences within restructuring. He also discusses where he is seeing stresses and strains across different industries and how Interpath can help businesses ride out the economic cycle. Interestingly, the volume of corporate administrations remains below pre-pandemic levels. Many businesses survived the pandemic utilising government support measures, but it is expected that insolvency figures will continue to rise as businesses are impacted by price pressures, upcoming debt maturities and weakened consumer demand.

Peter Arnold, EY UK Chief Economist, joined Adam Stones for episode 2 of the 'On the Spot' podcast! Peter leads the economic policy team at EY in the UK and has over 20 years of experience in advising both government and private sector clients in the UK and internationally on economic policy impact assessment, regulation, and in interpreting macroeconomic forecasts for business planning. He joins the show to discuss the Winter Forecast of the EY ITEM Club, a leading UK economic forecasting group, whose forecasts are independent of any political, economic or business bias. The Winter Forecast was published in late January. (Link to report in comments). 2022 saw a global energy price shock, inflation running at a four-decade high rate, political turmoil, and the sharpest tightening in monetary policy since 1989… Unsurprisingly there was a lot to cover in the episode! Here are just some of the key talking points from the ITEM Club's forecasts: Recession -  the UK economy is now expected to contract 0.7% in 2023, bigger than the 0.3% contraction predicted in October. Labour market - unemployment is forecast to peak just below 5% this year. Consumer spending - is likely to fall 1.4% this year, with growth of 2.3% expected in 2024. Business investment - likely to remain a relatively weak spot. EY ITEM Club now expects a fall of 0.8% this year. Weaker business investment is one of the factors likely to slow the recovery from the recession.

Kicking off series 3 is Paul Wilson! Paul is the Policy Director at the Federation of Small Businesses. The FSB aims to provide a powerful voice for the UK’s 5.5 million small businesses and the self-employed. Paul’s policy team publishes regular reports on a range of topics, their recent report ‘Credit Where Credit's Due’ is all about small businesses and their need for external finance to grow. 59% of small businesses have applied for external finance over the last five years, and only 37% of those firms found the application for traditional loans easy… There has been an alarming reduction of nearly half a million small businesses over the last two years. Given recent economic turmoil, there is a risk of another credit crunch where the UK financial market may begin squeezing lending to small businesses, reminiscent of the period following the 2008 financial crash. Small businesses sit at the heart of their communities and external finance needs to remain as accessible as possible to help firms in these difficult times. Key talking points: Small business finance market – what is the state of play given the current cost-of-doing-business crisis and interest rate hikes? The demand for capital – why do small businesses need finance and where are they looking to invest? What challenges do small businesses face this year?

UK-listed companies have issued the highest third-quarter total of profit warnings since 2008. 57% of those profit warnings came from companies citing rising costs as a key issue as they struggle to pass on costs to consumers, with over half of all warnings coming from consumer-facing sectors. 'On the Spot' once again is Kirsten Tompkins. Kirsten is a Market Analyst and Content Creator in Turnaround and Restructuring at EY-Parthenon, the strategy consulting arm of EY. As the coordinating editor and data analyst for EY-Parthenon’s Quarterly Analysis of UK Profit Warnings, Kirsten joins us to discuss the Q3 report, 'Predictably unpredictable'. Kirsten returns to the podcast after discussing the Q2 report with us in late July. So far this year, profit warnings have been driven by increasing costs, supply chain and labour market issues, a weakening in consumer confidence over the summer and, more recently, the fall in sterling. With so many uncertainties in the outlook for 2023, management teams should focus on developing resilience to avoid further warnings and more profound consequences…