Accountancy Age exclusive: FDs unfazed by Net losses
One in four 'old economy' FDs would consider leaving their job for a dot.com start-up, despite dire warnings that the internet economic bubble has burst.
The findings, in this week’s Accountancy Age/Reed Big Question survey, follow a string of high profile collapses including internet retailer boo.com and online news service Netimperative in recent weeks.
Despite the setbacks 24% of more than 200 FDs questioned insisted they would still consider leaving for a good dot.com opportunity.
Jerry Garland, FD at game-centre operators, RAL, said: ‘Yes (I would consider moving to a dot.com start-up), dependent on the company and stability.’
Another FD who wished to remain anonymous, said: ‘(There is) no reason why they should be any more risky than any other organisation. If you do a good job it does not matter where you work’.
But 64% of FDs were sceptical over dot.coms and said they would not consider joining such a company.
‘The rewards would have to be substantial to justify the risk. Many dot.coms will fall by the wayside in the future’, said Ron Haley, FD of construction consultants Andrews, Kent & Stone.
Dot.com feelings have run high in recent weeks. A number of loss-making internet companies are expected to drop out of the FTSE 100 later this month and CBI director-general Digby Jones, a former KPMG partner, caused controversy last week by welcoming the recent correction in internet share values.
Liquidators are also seeking to recover as much as they can from the wreckage of the dot.com companies that have collapsed in recent weeks. KPMG has sold the systems architecture of collapsed boo.com for a rumoured figure of £250,000. The system is thought to have cost tens of millions of pounds to develop.
Announcements regarding the sale of the remaining elements of the business, including the boo.com brand and the website are expected soon. The company owed £25m to creditors.
Senior partner Simon Freakley at insolvency firm Kroll Buchler Phillips – who has been appointed as liquidator of Netimperative – said: ‘These companies are running into difficulties because of equity rather than debt. They are running out of cash before they can set up effective distribution channels.
‘From an insolvency point of view the problem for liquidators dealing with dot.coms is the lack of assets they can provide.’