Industry Index Ranks Top UK ARM Players

The second OC&C credit management and debt collection (CMDC) index ranking the top companies in the industry is now out in the October issue of Credit Today.

Exclusive to CT, the index uses qualitative and quantitative measures and this year reflects a market in turbulence, with only five of the top 20 companies scoring higher than last year. The average score for participants has fallen 12 per cent, driven primarily by falling financial performance.

Last year’s index predicted the demise of the debt collection contingency model and the rise of debt purchase. OC&C strategy consultancy partner Mark Jannaway, one of the index’s authors, said the recession has granted an Indian summer to contingency players. However, he added: “Many pure debt purchasers have suffered but that doesn’t mean to say debt purchase isn’t the way forward.”

In the medium term he predicts debt collection agencies will become subcontractors of debt buyers. “Quite a large percentage of their work is coming from debt buyers – that’s quite a worrying place to be because you’ll get squeezed on costs more than with creditors,” he said.

OC&C is bullish about the rise of public sector work and companies poised to take advantage of government and local authority contracts were rewarded in the index. Specialist activities such as field collections or the economic deployment of legal processing are also becoming more important.

However, David Hosein, managing partner of strategy consultancy OC&C and one of the index authors, said the recession should not be used as an excuse for poor performance. He said: “The writing was on the wall for people who had not improved their businesses before. The credit crunch has just exacerbated and accelerated it.”

Next year’s index promises to extend many trends further, with companies not prepared for an extended period of low collectability likely to fall further.

For the full rankings and write up see the October issue of CT. The index is not intended to be an investment guide or to be used as a way of identifying businesses that will fail.