UK parts and accessories business in danger

Ninety per cent of the UK's motor parts and accessories businesses are using formal debt to run their companies. And with an average margin of 1.1 per cent, few are going to be able to reduce their debt burden, according to the latest Plimsoll Portfolio Analysis.

A Plimsoll survey of 117 companies showed that only 82 didn't carry debt, and the average business was financing around 30 per cent of their assets.

Says Plimsoll senior analyst David Pattison: “These companies are struggling. Their debts have increased nearly 59 per cent in the last three years and their ability to pay these debts back is under threat."

The analysis also reveals that of the 117 companies:

• 99 are loss making

• 55 failed to increase sales

• Interest payments were eating almost 1.7 per cent of sales

• All have a “danger” financial rating by Plimsoll.