Hiding in plain sight

PG Branding Limited of Harrogate is one distributor that has recently gone into administration. Were the warning signs there asks Mike Collins.

Once again we find insolvent distributors in the spotlight following the demise of a reasonably-sized and established distributor costing suppliers’ money. But should those that supplied have picked up on it, and not been victims? Read on and decide for yourself…

The Five Key Failure indicators

The Distributor Failure Analysis released by the writer in 2013 highlighted five key failure indicators of distributors as the minimum vetting standard when supplying a ‘distributor of concern’. Let’s see how PG Branding Limited matched up against those: 

1) The lifetime credit reporting limit of a failing distributor has never been greater than £1,000.

Since 2011, PG Branding has not exceeded £500 at any time.

2) A failing distributor has a declining or constant negative net worth/shareholders’ funds indicator during the previous 3 years – they are a risk in the highest category.

PG Branding was always negative since 2011.

3) Late filing history at any point in the previous five years is a bad sign.

PG Branding’s credit limit was suspended in October 2013 because its financial statements were too old.

4) Entries on the Register of Outstanding Invoices (ROSI) are a big negative, with more recent and multiple entries most significant. 

PG Branding has 48 entries on Register of Outstanding Invoices dating back to 2012, but the majority are late 2015 and into 2016.

5) A credit score of 50 or less at some point in the previous three years is highly significant. 100% of failed distributors analysed met this statistic.

PG Branding never went above 40 during this period and was often far lower.


There really can only be one, given a 5 out of 5 failure on all the key indicators. PG Branding Limited was a classic case of ‘the bleeding obvious’ for a very long time indeed. Suppliers that continued blindly on were in denial, and now find themselves on a £500,000 plus creditors’ list. They will no doubt be recognising the reality all too late, to the detriment of their pockets.

bpma AccountAssyst subscribers’ total losses on the PG Branding creditors’ list are less than £5,800 out of £524,000 or so (under 1.2%). 

Make no mistake about it, nothing within this is hindsight after the facts. The data and information needed to avoid a write-off was always out there for you as a supplier. More importantly it still remains very much available to you through the bpma Credit Management Service (AccountAssyst for prevention and Direct Route zero cost debt collection for cure). If you don’t use, you lose! 

Mike Collins may be contacted on 01274 223190 to set up your bpma benefit and all your other credit management requirements.

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