As he prepares for the in-store marketing specialist’s half-year results next Wednesday, the 37-year-old chartered accountant is keeping tabs on Hutchison G3 UK, Disney, Sainsbury’s and other high-profile clients.
‘As an FD, I’ve got to be very careful,’ says Harris alluding to the usual cashflow issues. ‘I have to watch their progress.’
Coutts creates in-store displays for large retailers, and Harris explains that the company initially had concerns with Hutchison. The mobile phone operator launched at a difficult economic time and was trying to break into an established market. Although the board is now satisfied Hutchison has ‘turned the corner’, the FD admits he is still monitoring it, along with Coutts’ other significant clients.
Last year was tough for Coutts because of problems with its Dutch subsidiary.
At the end of the financial period, the board decided to close the underperforming subsidiary down. As a result, Harris will have to write off the entire investment, including the £79,000 paid in a last-ditch attempt to revive the ailing business.
But the subsidiary’s closure might still produce a dividend and Harris is now waiting to hear from the liquidator on the sale. ‘If we get a clear indication that there will be a dividend from the sale, we will include it in this year’s results,’ he says.
The offloading of Coutts’ stationery unit in August also caused a headache.
In last year’s accounts, Harris included the £2.25m sale in the accounts.
But auditors Ernst & Young warned: ‘A clawback maximum of £75,000 could apply if the turnover falls short of £5m in the year following the disposal.’ Harris says he is confident the clause will not be applied, saying: ‘We were right in the end and it will be proved in the first half of this year.’
Going forward, international accounting standards are also a preoccupation.
Harris claims IAS are not a major issue for Coutts, because its accounts are ‘fairly straightforward’. ‘We are aiming at complying with all the requirements in our 2003 accounts,’ says Harris.
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