Tui and Rolls-Royce among slowest FTSE firms to pay small suppliers
Travel firm Tui, Guinness drinks giant Diageo and engine maker Rolls-Royce are among the slowest FTSE 350 listed groups to settle invoices with suppliers, new research has revealed.
A report by Good Business Pays campaign has named and shamed the top 10 slowest payers in the FTSE 100 and FTSE 250 indices, using the latest information submitted under the Duty to Report regulations to the Government.
It found that defence firm Meggitt – at the centre of a bidding battle – is the worst culprit for late payment, taking on average 132 days to pay and failing to pay 85% of invoices within agreed contract terms.
Bulmers and Magners maker C&C group follows at 120 days and travel operator TUI at 101 days.
Diageo is in fifth place, taking 84 days on average, with Mr Kipling cake group Premier Foods and Rolls both taking 76 days, and pharmaceutical firm GlaxoSmithKline in tenth place with 75 days.
Glaxo was recently reinstated on the Government-backed prompt payment code list, nearly two years after being kicked off for failing to pay invoices on time.
The prompt payment code sets a target for payment within 30 days, but the analysis shows FTSE 350 companies are taking on average 37 days to pay small suppliers.
The worst offenders take more than four months to settle bills.
Around 50,000 businesses go bust each year due to cash flow problems caused by late paying clients, according to the Federation of Small Businesses (FSB).
The Good Business Pays campaign said that while 76% of large companies report paying on time, they often use “lengthy and unfair” terms within their standard contract, while trade credit can enable customers to pay suppliers even later than their agreed terms.
It is urging FTSE firms to speed up their payment practices and re-evaluate their standard terms to support smaller suppliers.
Terry Corby, chair of Good Business Pays, said: “Many of these large companies claim to be responsible, but they’re failing to do the basics such as paying their small suppliers quickly.
“We’d like to see FTSE leaders, and their stakeholders such as investors, make responsible payment practices a bigger priority.”
The campaign is supported by groups including the FSB, business body the CBI and manufacturers group Make UK. It is launching an accreditation programme this month to recognise big businesses improving their payment practices.
