At least 20% of companies in the FTSE100 are unlikely to be able to eliminate
their pension deficits over a realistic timeframe, a new report by KPMG has
The Big Four firm said that one in five companies on the FTSE100 would
struggle to close the gap between liabilities and assets from free cashflow
within the next decade.
KPMG surveyed 66 FTSE100 groups, excluding financial services companies, and
found that although half the groups could pay off deficits with cash within a
year, at least 14 lacked sufficient cash and were in the ‘alarming situation of
never being able to pay off their deficits’.
Utility companies, with their high capital expenditure demands and regulatory
constraints, would be the most vulnerable. Retailers lacking ‘pure discretionary
cash flow’ would also struggle.
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