Company Financial Health Info.

[Perik Omo]

Hope somebody in NZ may be able to suggest something here. Son-in-Law's business has been sub-contracting for a larger company in Auckland (Company A) but they have over the last few months got later and later in paying the invoices and only paying in dribs and drabs (i.e. $50k invoices outstanding and only getting paid $5k now and again). SIL has just been asked to carry out a specific piece of work that's going to take 3 months to do and he has managed to get a copy the costings and it would appear that there is no way that Company A can make a profit on the job as it stands so it looks like they have underpriced the job by a substantial amount to get the business. SIL is worried that Company A is in financial trouble as they have recently taken all the company truck fuel cards off the employees and he is now worried that they will not pay the invoices for the new job despite promises to the contrary. SIL needs this work at the moment as he has 3 guys to keep busy or he would walk away now and there is little else coming up in the near future. Is there any easy (cheap!) way to find out the financial state of Company A as there is no point in undertaking this new job if there is no hope of getting paid?

[mark387mw]

Businesses can be searched here http://www.business.govt.nz/companies/app/ui/pages... although financials in detail I wouldn't think are public.

It'll tell you directors and shareholders and you can search their other companies. It can tell you if they're struck off.

Someone may be along shortly with more helpful info

[derekfromnz]

IMHO and bearing in mind I know nothing of the businesses involved ....sounds like a bad plan to do further work for this company, your SIL is already supporting the main contractors' working capital and cashflow using his own resources and has identified that the new job will not provide a prudent level of profit potentially worsening the position, if your SIL is being used for free working capital by the main contractor it is likely others are too and subbies fall pretty close to the bottom of the food chain for repayment as unsecured creditors if everything turns pear-shaped. If your SIL needs the work for his staff now, takes on this new contract and isn't paid all he will be doing is paying more costs out of his own pocket providing a short term stay of execution for his staff and long term pain for himself. That said, the main contractor may well be profitable overall and just have a working capital issue which is common if they have been experiencing the high levels of growth common in the building industry, a lack of adequate working capital will kill a profitable business but there are options out there for that like invoice financing etc. To get an indication of the health of the business probably the only ones who will talk are the subbies, the bank etc won't be able to but you can talk to Veda (Credit Agency) about getting one of these.....http://www.veda.co.nz/business/commercial-intelligence/commercialcheck.dot

[Perik Omo]

Thanks both for the replies. SIL has been with me here in France for the past week and left today to go back to Auckland where he will have some big decisions to make when he gets there, daughter and 3 children are staying here with us until things become clearer. We did some more investigating on the first website mentioned and discovered some things have been happening since April:

1. Company A is now a wholly owned subsidiary of Investment company I with the same directors on both.

2. Investment company I is owned by two trusts split 50/50 which have an accountant in Auckland as the (sole) director of both trusts.

Also found out that Company A owes another sub-contractor $300k for work in Christchurch whch has been outstanding for 3 months.

[Gdguyswin]

It's very annoying but in my experience unusual, most people here pay their bills. BayCorp can help with a credit assessment and possibly getting the money back. I've had good experience with them over the years.

[Perik Omo]

OK, thanks. I'll pass that info on for when he gets there.