Wimbledon, 2005. Roger Federer serenely watches an almost impossible retrieve by Andy Roddick from the baseline of his backhand court, the ball arcing back to bounce at chest height on Federer's side of the net. Roddick is splayed like a spatchcock chicken ten feet out of court, only half watching the reigning champion raise his racquet to smash the ball away.
That seems like a total gift to the Greatest Of All Time, but it is nothing compared to the story in today's press about 'zombie companies', with our Billy on the NTI newsroom team. Passing him some copy about 557,000 near-dead companies to research felt like sprinkling gold-dust onto his desk, his eyes shining as they skimmed the title and, dare we say, opaque inner eyelids seemed to slither across his eyes as he blinked in anticipation.
Even before we had ever heard of a coronavirus, a decade of low interest rates helped to fuel a rise in the number of terminally inert companies, unable to cover their debt-servicing costs from profits in the long term. They reeled hopelessly between financial crises, directors staring down the barrel of a misfeasant gun, doing deals with HMRC and covering debt with more debt whilst playing fast-and-loose with the producers of many a consumer complaints TV programme.
The term 'zombie companies' was slightly updated during and just after lockdown this year with the rise of unviable 'zombie jobs'; filled precariously with people plugged into 00 Sunak's life-support machine, furloughed and looking trepidatiously towards the future. Allowing zombie companies to limp along, unable to invest or repay their debts, comes at a cost to the wider economy. Allowing people to count on future employment with such companies, not paying tax on their earnings, just getting by and listening to reports of the virus taking hold of the world again, is the stuff of horror. Paying for those people out of money we don't have and must borrow at increasing interest rates? All we need is Vincent Price to rise from the dead to do the voiceover to the backdrop of Thriller, so ghoulish are the prospects.
Begbies Traynor published their 'Red Flag Alert' today (Thursday 29 October) reporting that the current ban on lease forfeiture and winding-up petitions, adds to the aforementioned 557,000 companies already in significant distress. Some think that even Rishi's generous Winter Economic Plan announced last week won't be even nearly enough and with the band playing ever louder on the increasingly perpendicular deck of a sinking ship, maybe it is time to sit back, light a cigar and let it all happen.
We won't, of course. Brits are made of stern stuff, and is that a rescue ship we see on the horizon in the shape of Pfizer's Covid-19 vaccine reportedly ready by Christmas? Can we do what our favourite loans did in 2020 and bounce-back? According to Billy, a zombie can only be killed if you destroy their brains and even then it must be by a total decapitation, as anything less than that can make them really mad. The seas are getting rougher, but maybe it isn't quite the perfect storm yet.
