Simon Howell has worked in credit since 1983. He describes the change as stone age to space age, and he is not being dramatic about it. In the early 1990s at Hanson, a group credit meeting filled a table with ten people. Today, for a business several times the size, there is one.
Simon leads credit risk at Tarmac, the UK’s largest heavy building materials business. His team of three sets the trading parameters behind around £2 billion of external commercial sales. In this conversation with CEO Craig Evans at Company Watch, he explains how those decisions get made now that the old method has largely gone.
What replaced the site visit
The role used to belong to what the industry called credit risk roadies. You went to see the customer, counted the plant in the yard, looked at the invoices on the desk, and formed a judgement. Simon’s view is that this cannot be replicated. It can only be replaced, and replacing it well takes more thought than most teams give it.
He uses a jigsaw analogy. Filings, detrimental data and third-party information make up most of the picture. Payment behaviour is another piece. The interesting moment comes when that behavioural piece doesn’t fit the financial one. In the old world you picked up the phone and arranged a visit. Now the skill is knowing where to look, and looking early: a customer who has always paid on time is suddenly paying a day or two late, well before anything becomes reportable to a credit insurer.
Fewer failures than expected
Construction has taken a run of shocks and absorbed more of them than the commentary suggested it would. Simon’s read is that 2008, 2020 and the 2022 rate rises each left businesses with defences they didn’t have before, and that firms are more resilient than they get credit for. His caution is about demand rather than balance sheets. Large infrastructure programmes such as HS2 and Lower Thames Crossing carry enough weight to mask softer conditions underneath.
Fraud has arrived in a sector that never planned for it
Fraud in heavy building materials was close to unheard of not long ago. It is now common enough that Tarmac caught a corporate identity fraud attempt on the morning of the interview, through its own protocols. Simon points out the structural problem: banks have run multi-layer verification for decades, while B2B is starting from zero, and the person placing the order is often standing in a trench arranging concrete for the following day. Awareness and healthy scepticism do a lot of the work.
AI, and what it gives back
Simon is direct about AI being a threat to some roles and a significant gain for others. His preferred description is having your own financial analyst sitting on your shoulder. The point of the time it saves, though, is not the saving. It is the chance to spend that time back in front of customers, which is where construction credit risk started and where most of his customers still want it to be.
Watch the full conversation above and take away a working method for deciding who to trade with, how far, and when to change your mind. Simon is candid about the tools behind his process, including how his team uses our suite of credit risk solutions to set limits they can defend, spot deterioration before it reaches a credit insurer’s radar, and catch corporate identity fraud at the point of order.
