Crisis and Transformation

Apr 20, 2017

Bankruptcy Rescue

  • Restructure of the business resulting in more than 50% redundancies
  • Leverage of existing resources and minimal additional investment to maximize cash flow
  • Maintaining market lead in product development and IP

An initial appraisal of the business identified a significant cash flow crisis that had been hidden by the previous Finance Director. The outcome of which was the business needed an immediate injection of over £2m to survive. Through a restructure of the business, acquisition of some investment from existing investors and a programme of strategic sales, the business was recovered enough to continue trading. Addressing one cost alone (insurance) resulted in a rebate of £100k. Redundancy programme with full consultation was undertaken whilst retaining key engineering talent critical to the product development plan.

Cash Crisis Management

  • Strategic supplier management during a period of over trading.
  • Internal Communication and planning throughout the crisis
  • Recover planning to maintain key relationships

The company which was Russian owned and based, with administration and sales operations in the UK, engaged in a diversification project without planning for the investment required. Stretching the company’s resilience to breaking point, with no incoming cash and a sizable payroll to operate, a negotiation with the key suppliers became critical to the survival of this now thriving multi-national company.

Full Systemisation of Operations and Administration

  • Automation and systemization of all critical operations and accounting functions lead to significant efficiency improvements
  • First unqualified statutory accounts in the company’s history allowed for external investment

This relatively small company required inward investment but had too many inefficiencies for it to be attractive to any seasoned investor. A planned overall of the operations and accounting functions lead to both inward investment and scalability within 6 months and ran in parallel to the Cash Flow Crisis Management project.

Strategic Product Development (R&D)

  • Strategic appraisal of R&D programme resulting in 8 key products completing development within 18 months
  • £1m cash rebate from HMRC for R&D tax credits

Undertaking a comprehensive review of the product development program and streamlining it to deliver key strategic customer needs whilst “moth balling” non-strategic vanity projects allowed the early release of a key product fundamental to the long-term cash generation of the business. Additionally, making a retrospective application to HMRC for R&D tax credits resulted in £1m cash rebate and on-going credits.

Transformation to 21st Century Ready Operations

  • Cash–book operation to fully automated, integrated operations and accounting system
  • Training and manpower planning to enable scaling from existing single income business to a multi-income operation
  • Set up business structure for key project developments – including HR, Health and Safety, Finance

On joining the UAE’s second most popular visitor attraction, with 1m visitors a year, the operation was entirely cash with no control systems or KPI’s and no common systems for recruitment, finance, procurement or health and safety. Over 9 months the organization was transformed from manual and inconsistent processes to formal and, as much as possible, automated procedures with full accountability. Established a fully functioning HR, Health and Safety and Finance department.

Charity Restructure for Survival and “Fit for Purpose””

  • Complete restructure of a charity failing to maintain financial probity
  • Reducing overheads and costs by £800,000 in six months

An initial appraisal of the operations identified a fundraising gap of over £1m against the planned activity. By focusing on the main charitable aims, and undertaking a strategic review the costs, a structure plan was put in place and rolled out. This resulted in better quality delivery of the charitable core function with less staff and at a lower cost thus avoiding any negative PR exposure.

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