The timber industry and related trades are being urged to heed the warning sounded by the collapse of furniture retailer Courts UK Ltd.

Credit solutions company Coface UK, which organised a seminar for timber traders on November 24 about key risks facing the sector, said the industry was experiencing reduced margins, overcapacity, shortening of supply chains and consolidation which are leading to insolvencies.

The London-based firm advises all companies to monitor their customers’ ability to pay, negotiate their trade credit arrangements and use credit information sources and products to contain excessive risk.

Courts plc and Courts UK Ltd were placed in administration on November 30. The loss-making companies have been suffering under a £280m debt burden.