The Challenge:

To assess the financial viability of the business and, if viable, plan and deliver the plan for the survival of the business.

Timeframe:

18 months

Situation:

• £10m turnover business losing £800,000 per annum;
• Unreliable management information;
• Poor cash management;
• Burning cash at more than £1,000,000 per annum; and
• FD recently left, CEO followed shortly after appointment.

Tasks:

• Get to grips with cash position and management information issues;
• Manage the short term liquidity of the business; and
• Evaluate viability of each business and future options for the group;

Actions:

• Introduced effective short and medium term cash forecasting systems;
• Managed the short term liquidity of the group;
• Established accurate management reporting;
• Evaluated future potential profitability and financial viabliity of each business stream;
• Created turnaround strategy based on retention of core business and disposal of peripheral businessess; and
• Actioned the disposal of several operatons.

 Results:

• Realised cash invested in longer term assets;
• Created reliable financial budgets for next 3 years;
• Disposed of loss making businesses;
• Closed probmlematic part of core business operation;
• Improved profitability and cash generation of core business introducing sustainable pricing model;
• Raising contingent working capital funding (£750,000) to provide an acceptable cash headroom during execution of the turnaround;
• Business profitable and cash generative in 2012; and
• Handed over next stages of strategy (operational cost management) to a new management team;

Testimonials...

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