Facts
Background
In better times the company had been highly profitable
(£1 million+ pa) but had experienced sales drop by over half. Costs could
not be cut quick enough and the company was fast running out of cash.
Rapid expansion abroad in recent years had left the financial management
stretched and the need to fire fight short term cash flow issues. The last
full management accounts were six months old and new financial forecasts
were work in progress.
The problem
The company was talking to a number of possible funders/investors
to plug a gap in cash flow thought to be £1 million but no one was sure.
Just when the company needed reliable MI and forecasts most it was least able
to produce them because of having to fire fight creditor pressure. The
company had a large highly profitable contract in Indonesia that was
about to start that and after a couple of months would fund group operations for
the next six months but it had to make the next couple of months payrolls
first.
The solution
We introduced a Turnaround Interim Manager from our T-IM
network to produce a rolling 12 week forecast and take the creditor pressure
off the group FD who could then focus on bringing the MI up to date and
complete the 12 month forecasts. This short term focus on cash flow
identified the ability to bring forward contractual payments from the American
subsidiaries that helped meet payrolls across the Group. With up to date
MI and forecasts a major bank agreed to fund the first couple of months of the
Indonesian contract and disaster was averted.
Turnaround interim management difference
McTear Williams & Wood’s focus on business rescue and
its ready made T-IM network enabled us to see exactly what was required and
deliver the additional resources in double quick time. A lot of IP firms
would not have believed that a rescue was possible and would have jumped to the
conclusion that this was an easy administration with substantial fees. We always exhaust the business rescue options before considering
insolvency putting the clients’ interests before our own.