Intrum takes new bearings: Debt collector looks forward to penalties from Brussels for late payment

EUROPEAN Commission proposals to penalise late payers of bills would be highly beneficial to Intrum Justitia's business if approved by member governments, Bo Goranson, chairman, said.

The debt-collecting firm announced disappointing half-year results, down 6 per cent to pounds 7m after an unexpected 25 per cent slump in turnover in Sweden and Finland, caused by recession.

Mr Goranson, pictured yesterday on board Intrum Justitia, the 60ft Whitbread Round the World yacht sponsored by the company, said Europe's largest debt collector could expect tighter payment laws to encourage companies to use its services earlier and more often. Legal penalties give collectors a strong lever to prise money from debtors.

Mr Goranson has been lobbying the Commission for four years to introduce legislation on late payment.

In Britain, where the Government this year rejected statutory penalties for late payment, bills were paid in 60 to 70 days, Mr Goranson said, adding that it was beyond him why the UK had decided to stick to voluntary schemes to encourage payment.

In Germany, where there were legal obligations to pay on time, the average was 43 days. German companies were 'healthier and wealthier' as a result.

The European Commission's draft proposals recommend statutory interest on overdue bills and payment of collection costs by debtors. A further proposal that would widen the services offered by debt collectors is the abolition of the lawyers' monopolies that exist in some countries over the handling of debt cases in court.

With turnover steady at pounds 42m, Intrum Justitia's growth was held back by Scandinavia, where Mr Goranson said his forecasts had been wrong. Market share in the region had risen by 15 per cent, however. In the UK, France and the Netherlands, operating profit rose by pounds 400,000 to pounds 3m compared with a year ago, but in Nordic countries it was down from pounds 6.2m to pounds 3.9m.

Mr Goranson said he did not know whether MAI, the TV and financial services group, planned to raise its 16 per cent stake in the company. Mr Goranson has 31 per cent.

The interim dividend is unchanged. The shares fell 1p to 89p.

View from City Road, above

(Photograph omitted)