Private firms better payers but riskier

(AAP) - Private companies are more likely to fail in the coming twelve months than their publicly-listed counterparts, according to business credit information provider Dun & Bradstreet (D&B).

Public companies outperformed private companies on profit margin, D&B said after
releasing the findings of a survey on company performance over the last financial
year.
Of the 2,000 publicly listed entities in Australia, and over one million registered
private companies, D&B's survey looked at Australia's top 100 public and private
companies.
Private companies, which are more likely to be involved in the construction,
transport, utilities, wholesale and retail sectors, have a higher average chance of
failure, D&B said.
The median private company achieved a net profit margin of just 2.8 per cent,
compared to 8.2 per cent for the median public company.
Revenue growth was also higher among public companies, reflecting their larger size,
D&B said.
But private firms outperformed public companies on net debt and liquidity,
collecting receivables in a more efficient manner than their public counterparts.
And they are better payers, with up to 12 per cent of private firms either involved
in court actions or being approached for debt collection, compared to 20 per cent of
publicly listed companies.
Public companies dominate the financial services, mining, manufacturing, and real
estate sectors.