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LATE PAYMENT WORSENS FOR UK SMES

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LATE PAYMENT WORSENS FOR UK SMES
  • Survey of 80,000 invoices from UK businesses reveals stark findings
  • 62% of invoices paid late in 2017, £21.1b outstanding in late payments annually
  • Invoices paid 18 days late on average; Prompt Payment Code not delivering for UK businesses

 The culture of late payment to UK SMEs is undermining their growth and the value they bring to the UK economy. Findings1 from business finance company MarketInvoicereveal that 62% of invoices issued by UK SMEs in 2017 (worth over £21b) were paid late, up from 60% in 2016.

The average value of these invoices was £51,826 and three in ten invoices paid late took longer than two weeks from the agreed date to settle, with some taking almost 6 months to be paid. The research analysed which sectors, UK regions and countries were the worst late payers to UK SMEs.

Sectors

Sectors were assessed on proportion of invoices paid late and how late, on average, these invoices were actually settled. Sectors that frequently pay late included the food & beverage industry (83%), energy businesses (80%) and wholesalers (79%). Meanwhile, those who took the longest to pay included transport businesses (25 days), utilities (23 days) and those in media sector (21 days). 

Regions

Businesses in Northern Ireland, taking the mantle from Yorkshire in 2016, were found to be the worst late payers with 93% of invoices paid late. East Anglia (68%) and East Midlands (66%) came in second and third respectively. Scotland was the best of the worst, where half (53%) of invoices were settled late.

Countries

The research examined invoices sent to 93 countries. German companies were the worst late payers, taking an extra 28 days to settle invoices from agreed terms. French firms took a further 26 days and businesses in the USA 20 days.

While UK companies (66%) often pay invoices late, those in the USA (71%) and continental Europe (73%) are even more likely to delay payment. However, the UK still takes twice as long (18 days) to pay UK suppliers than counterparts in Europe (9 days). 

Bilal Mahmood, MarketInvoice spokesperson commented: “A bad situation is getting worse. The problem is being compounded by 90-day payment terms demanded by larger organisations, which are becoming more common. SMEs need to understand what measures they can take to reduce the risk, such as making T&C’s clear from the outset, chasing payments down and enforcing the right to claim compensation from late payments.”

“We look forward to how the Duty To Report 2 measures [which requires large businesses to report on invoice payments twice yearly] that came in to force earlier this year will play out. This is not about naming and shaming but encouraging positive behaviours at big business”.

“SMEs owners respect long payment terms, but late payments are inexcusable. For every day an invoice is late, it’s more time spent chasing payment. This means less time for business owners to focus on growing their business, creating innovative ideas and hiring more people. Things need to change quickly.”

“We want the UK to be the best place in the world to start and grow a business, but the UK’s small-to-medium-sized businesses are hampered by overdue payments. Such unfair payment practices impact a business’s ability to invest in growth and have no place in an economy that works for everyone.”

Business

Logitech warns on FY 2022 outlook after pandemic-boosted FY 2021

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Logitech warns on FY 2022 outlook after pandemic-boosted FY 2021 1

(Reuters) – Computer goods maker Logitech International on Monday warned operating income for fiscal 2022 will drop back from a 2021 boom driven stoked by demand for mice and keyboards for work and leisure at home amid the coronavirus pandemic.

Operating income for fiscal 2022, measured under non-Generally Accepted Accounting Principles (non-GAAP), is expected to be between $750 million and $800 million, the Swiss-U.S. company said. That’s down from the $1.1 billion it now expects for fiscal 2021, a fraction up from a previous estimate of $1.05 billion.

Sales for fiscal 2022, measured in constant currency terms, will be about flat – plus or minus 5%. For fiscal 2021, Logitech raised its sales growth forecast to about 63% in constant currencies, up from the 57-60% range it previously expected.

In January, Logitech reported a more than three-fold jump in quarterly adjusted operating income, benefiting from the pandemic-driven boost in demand for work-from-home products and gaming accessories.

Sales at the company, which makes mobile speakers, keyboards, mice and video conferencing devices, increased 85% to $1.67 billion in the third quarter, which has traditionally been the company’s biggest sales period.

The company also said on Monday its expectations of long-term sales growth in constant currency have increased to 8% to 10%, up from high-single digits and that its non-GAAP operating margin target has improved to between 14% and 17%, up from 11% to 14%.

(Reporting by Kanishka Singh in Bengaluru; Editing by Kenneth Maxwell)

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South Korean tech firms shake up Japan’s storied manga industry

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South Korean tech firms shake up Japan's storied manga industry 2

By Sam Nussey

TOKYO (Reuters) – Two South Korean technology companies are borrowing from mobile gaming to shake up – and dominate – Japan’s storied manga industry, a plot twist that has expanded the comics’ fanbase to a new generation of readers.

Backed by tech giants Kakao Corp and Naver Corp, Piccoma and Line Manga have become Japan’s highest-grossing mobile apps outside games. Such online manga platforms have seen a surge in popularity during the COVID-19 pandemic.

Piccoma’s third-quarter transaction volumes more than tripled year on year to 11.6 billion yen ($110 million), extending a wave of online manga sales that has already seen digital surpass print in Japan’s $5 billion manga industry.

Line Manga, now operated by SoftBank’s internet business Z Holdings, saw transaction volumes jump by a third to 8.2 billion yen in the same period. Naver declined an interview request.

Piccoma passed Line Manga to become last year’s top-grossing manga app on both Apple’s IoS and Android. Its rise can be traced back to 2016, when it introduced a revenue model it calls “zero yen if you wait.”

The app’s manga tales – from classroom love stories to supernatural horror – are serialized. Users must wait for a timer to unlock the next instalment, or pay to read ahead.

Inspired by smartphone games in which playing is free but extra content is not, the approach marked a radical departure from the typical model of selling an entire manga volume up front at prices of $4-$6.

“We thought if we could grab 5% or 10% of the bigger games market it would drive growth,” said Yukiko Sugiyama, senior manager in Kakao Japan’s business strategy department.

Readers, eager to find out what happens next, often end up paying. The business model has become standard as dozens of book sellers, tech companies and publishers rushed to offer their own apps.

PAPER TRAIL

Megumi, a 34-year-old office worker in western Japan, said she reads 20 pages or so of manga on her phone during her lunch break, and turned to the two apps when stuck at home taking care of kids during last year’s pandemic state of emergency.

She became “addicted” to and paid for a hit Line Manga series, “True Beauty”, about a young woman whose makeup skills make her popular with men.

The strip originated in Korea, where the rise of the internet saw paper sales collapse, replaced by smartphone-optimised comics.

Manga apps offer a vast back catalogue of titles and exclusive strips.

“You can read manga carrying just your smartphone – it’s handy,” said Kana Misaki, a 36-year-old care worker living near Tokyo who reads manga “overwhelmingly” via apps.

In Japan, online manga is generally still formatted like a book, and traditional publishers are a powerful force, with editors closely involved in each stage of production.

Printed in black and white on cheap paper, paper manga remains affordable and disposable. The industry is protected under Japanese law from books being sold for less than their cover price, even online.

“For new titles, paper sales are much higher,” said Shu Hashimoto, an editor at publisher Kodansha’s long-running Weekly Shonen Magazine.

Even the most ardent app users say they will buy paper editions of their favourite titles.

“You don’t know when titles will disappear from the apps, so when I want them close at hand I buy them,” Misaki said.

($1 = 103.6900 yen)

(Reporting by Sam Nussey and Yuki Nitta; Editing by Gerry Doyle)

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British insurer Aviva sets out net zero 2040 climate strategy

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British insurer Aviva sets out net zero 2040 climate strategy 3

LONDON (Reuters) – British insurer Aviva plans to become a net zero carbon emissions company by 2040, it said on Monday, claiming this was the most demanding target set by any major insurer worldwide.

Following the 2015 Paris Agreement on climate change, many countries and companies are aiming for net zero carbon emissions by 2050, to limit global warming to 1.5 degrees Celsius above pre-industrial norms.

The insurer plans to reach net zero carbon emissions from its investments by 2040 and net zero from its own operations and supply chain by 2030.

“For the world to reach net zero, it’s going to take leadership and radical ambition,” Aviva Chief Executive Amanda Blanc said in a statement.

Aviva’s plans include expanding green investments and switching to renewable electricity in its offices and to electric or hybrid vehicles in its motor fleet.

Aviva will by the end of this year stop underwriting insurance for companies making more than 5% of their revenue from coal or “unconventional” fossil fuels such as shale gas, unless they have signed up to the Science Based Targets initiative, an NGO-led group that signs off on corporate climate plans.

Aviva also plans to divest from such companies by the end of 2022, unless they sign up to the initiative.

Investors are stepping up their efforts ahead of COP26 climate talks in Scotland later this year, where countries will look to accelerate the fight against global warming.

Aviva is one of more than 30 members of the United Nations-convened Net-Zero Asset Owner Alliance, which also includes European insurers Allianz, AXA, Generali and Zurich.

The group’s members last year committed to setting tougher carbon limits on their portfolios.

Elsewhere, the New York state pension fund also committed in December to transition its investments to net zero by 2040, making it the first U.S. pension fund to set the goal by that date.

(Reporting by Carolyn Cohn; additional reporting by Simon Jessop; Editing by Susan Fenton)

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