BAE tops blue-chip list of slowest payers

Britain's biggest aerospace and defence company, BAE Systems, has the dubious distinction of being the worst payer of bills in the FTSE 100. The second slowest is another aerospace giant, Rolls-Royce.

BAE's Royal Ordnance division takes an average of 102 days to settle bills from its suppliers while Rolls-Royce Power Engineering takes an average of 59 days, according to the latest late-payment league table published by the Federation of Small Businesses (FSB).

Other blue-chip companies with poor records for paying their bills promptly include the telecoms operator Cable & Wireless, which takes 58 days, and Smiths Group and Rentokil Initial, both of which take 55 days.

Among foreign companies with the poorest record on prompt payment are the French-owned CarnaudMetalbox, which takes 75 days on average to settle a bill; Peugeot Motor, which takes 59 days and the French-owned London Electricity, which takes 50 days.

According to the FSB there has been no improvement in the number of companies settling their bills on time despite the introduction of laws four years ago entitling suppliers to start charging interest after 30 days.

The FSB table, based on analysis carried out by the credit management research centre at Leeds University, showed that only one-third of public limited companies complied with best practice by settling their bills within 30 days. A fifth took more than 60 days to pay. The average time it takes PLCs to pay bills is 46 days – the same as it has been for the past three years.

The FSB said it was also concerned about the apparent decline in the number of companies setting out in their annual reports the average time it took for bills to be paid, as is now required by law. There has been a 21 per cent fall in the number of companies providing payment information, from 4,100 in 2001 to 3,243 in 2002. The federation has raised the issue of no-compliance with company law with the Small Business minister, Nigel Griffths.

John Emmins, the chairman of the FSB, said: "A quarter of business failures continue to be the result of payment delays and I am disappointed that there has been no improvement in the average payment times."