Manufacture, import and distribution of branded construction products
Situation faced:
Acting as CRO, the Group was facing rising cash pressure due to under-performance within a manufacturing-led subsidiary - a consequence of operational, sales and poor quality information. This in turn was limiting the growth opportunity offered by an import/distribution subsidiary that required funding to grow. The management team was under-pressure, disjointed and there was no up plan to deliver a recovery. The team had consistently underperformed against forecasts for a long period of time leading to a loss of confidence from their Private Equity funders and they were unsure whether to support the business, and if so, in what form that support should come.
Outcome achieved:
Provided a diagnostic overview to the investors and worked with management to build a 3 year recovery plan and detailed action plans in key operational areas (manufacturing, IT, sales and marketing, customer care and new product development). Introduced improved cash management techniques and agreed a time to pay arrangement with HMRC covering £500,000 of arrears. The management team was strengthened with the introduction of a new Finance Director and Commercial Director, and ultimately the plan was supported by the Private Equity investors.