eBuyer has downplayed the impact that a reduction in credit insurance will have on its business after both Euler Hermes and Atradius slashed limits on the company by 50% following the disclosure of its preliminary results to them.
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In the last six months credit insurers have been hit by arise in claims as the economy has weakened and are rapidly moving to reduce their exposure, particularly in the retail and construction sectors.
Sources in the credit sector said Euler and Atradius who between them underwrite in excess of 85% of the credit in the channel had halved the lines on eBuyer having seen its prelims for the year-ended September2008.
“There is a general nervousness around the retail sector,eBuyer’s line will be reviewed in March,” said the source.
However, eBuyer financial controller Malcolm Healy told MicroScope there would not be “any real impact, we are trading well and everything is fine.”
Earlier this year the e-tailer had got involved with TV assembly said Healy but “we didn’t do a good job and that affected our figures”. The preliminary accounts had been taken to the credit insurers in recent weeks, he added.
In the year ended September 2007, eBuyer achieved revenues of £212m and a trading profit of £4m compared to losses of £10m and £9m in 2006 and 2005 respectively.
Healy would not be drawn further on its preliminary figures but it certainly appears that they did nothing to calm the nerves of twitchy credit insurers.