Safeguarding & Rebuilding Stakeholder Value
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Safeguarding and rebuilding stakeholder value combines financial, operational & management skills. It involves higher skills in the art of influencing, negotiation & professionalism. These spotlights from Galen Partners indicates the level, depth and experience in a variety of sectors & scale of enterprises acting as CRO, Interim FD and board support.
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Safeguarding & Rebuilding Stakeholder Value
- 1. 2014 DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 Safeguarding and Rebuilding Stakeholder Value Galen Partners – Spotlights Restructure. Refinance. Rebuild.
- 2. Spotlights 1 – Aviation – Charter airline – £90m T/O 2 – Retail – Branded fashion business – £60m T/O 3 – Manufacturing – Elect & tech group – £50m T/O 4 – Food wholesale – Meat packaging – £16m T/O 5 – Retail – Soft furnishings – £14m T/O 6 – Agriculture – Tenant farm business – £9m T/O 7 – Automotive Services – Chauffeur business –£6mT/O 8 – Manufacturing – Injection moulding – £4.2m T/O 9 – Services – Property portfolio – £3.6m NAV 10 – Services – 24/7 Drainage business – £1.5m T/O DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014
- 3. DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 1 – Aviation – Charter airline – £90m T/O Role Cash crisis project leader Context Small & niche airline Driver – VC owner Servicing the highly competitive holiday market Key issues Loss of FD Fuel & airport suppliers Lack of capital budget Headcount Key actions Est short term cash flow budget & monitoring Prioritisation of supplier payments & terms of business Confidence & communication of numbers Time frame 4 months Outcome Sale to trade buyer Cash crisis managed & optimised to facilitate sale process Safeguarding business value at a time of weakness
- 4. DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 2 – Retail – Branded fashion business – £60m T/O Role Support to CFO / COO Context VC owned fashion brand Driving agent – VC owners Est cash crisis management plan Key issues Financial restructuring required Operational cash restricting ability to negotiate Key actions Short term cash flow plan priority re suppliers Working capital management re stocking plans Time frame 2 months Outcome Cash crisis managed through Debt rescheduling negotiations completed
- 5. DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 3 – Manufacturing – Electronics & tech group – £50m T/O Role CRO Context UK listed £50m T/O Driving agents bank & Big 4 IBR on 3rd monitoring visit Strategic review of a portfolio of business Key issues Post acquisition integration not delivering bottom line Misalignment of management in portfolio businesses Breach of bank covenants Key actions Ops reorganisation into business units with P & L resp Cost reduction & cash generation via working capital Time frame 3 months Outcome Bank confidence re strategic direction & operational perf Return to within covenants Expected exit from intensive care
- 6. DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 4 – Food Wholesale – Meat packaging – £16m T/O Role CRO & Interim FD Context Supplying supermarket & discounters 12 month start up Driving agent – Shareholder Key issues Inadequate financial information Poor governance £1.2m black hole in debtors Key actions Stabilise governance & confidence in numbers Est confidence with clearing bank ABL Disengage with discounters Time frame 6 months Outcome New investor engaged £1.7m, plus new T/O of £44m New FD & FC recruited Clearing bank ABL relationship stabilised
- 7. DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 5 – Retail – Soft furnishings – £14m T/O Role Interim FD & CRO Context 50 year brand, formerly £30m T/O Bought out of Administration by VC driver 160 concessions across UK Key issues FD dismissed, poor communication of numbers Clarity to ST cash flows & remodel business Inadequate working capital arrangements Stock lines, supply chain terms and finance cycle Key actions Manage down ABL funder Scale back headcount Renegotiate concession host contracts Manage board through insolvency twilight Time frame 3 months Outcome Remodeled on sustainable concessions & stock offering Business assets sold to trade buyer via pre-pack admin More equity than debt in new company
- 8. DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 6 – Agriculture – Tenant farm business – £9m T/O Role Lead Restructuring Advisor Context 30 year tenant farmers of 300 year aristocratic farm Failure of livestock company impacts on family P/ship Mixed arable / livestock farm Key issues Landlord notice to quit received 3 generations lived in 2 farms, prospect of no business, no homes & no income Local politics affecting livestock movements Key actions Restructure business to safeguard assets from Co failure Restore confidence with landlord & issue new tenancy Est tactics to nullify local politics Time frame 5 years Outcome New 20 year farm business tenancy issued to a new company with stronger capital, governance & ownership Business, homes & income safeguarded
- 9. DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 7 – Automotive Services – Chauffeur business – £6m T/O Role CRO & Interim FD Context Chauffeur to 1st class flight passengers & celebrities First & second generation business 30 years business experience Key issues Massive new flight contract received Purchase order + finance for 300 new E-Class Mercedes Icelandic volcano disrupts EU flights = no biz, no finance Key actions Renegotiate & refinance purchase order Improve both car & driver utilisation Disposal of fleet based upon sound financial formulae Recruit an FD and stabilise governance of business Time frame 6 months Outcome Reposition & upward revaluation of family business Performance legacy reinforced by new FD Rationalised purchase order
- 10. DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 8 – Manufacturing – Injection moulding business – £4.2m T/O Role Lead Restructuring Advisor Context MBI 10 years previously Quality & long term contracts with customers Contracted & own based injected products for wholesale Key issues Accumulated Crown debt Margin & turnover deterioration from Far East comp Mini group structure compounded by inter-co trans & whitewash process related to MBI purchase Key actions Consensual restructuring proposal rejected by HMRC Engagement with Big 4 practice to est pre-pack admin Negotiate buyback & finance via beauty parade of ABLs Recruit Operations Director Time frame 12 months Outcome Simplified group structure & rebranding Pre-pack admin buy back achieved Re-banking & new ABL finance
- 11. DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 9 – Services – Property portfolio – £3.6m NAV Role CRO & Refinance Context 10 HMO properties accumulated over 20 years Sole proprietor landlord One principal lender Key issues Inadequate governance & maintenance of properties Lack of financial skill sets within business Main lender given 12 mths notice not to renew facilities Key actions Refinance portfolio Negotiate with lender for time with estimated outcome statements for each scenario Educate client regarding insolvency implications of Fixed charge receivership & bankruptcy forced by main lender Time frame 2 months Outcome Disengagement of former finance advisor Credit approved offer of £1.5m achieved w/I 3 weeks
- 12. DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 10 – Services – 24/7 Drainage business – £1.5m T/O Role CRO & Interim FD Context Ground works construction and 24/7 emergency drainage services business 10 years established, downturn in construction Prospect of further emergency drainage contracts Key issues 2 bad debts from ground works division Invoice ABL funder & plant & mach funder working out Hi risk ground works re finance & contractual obligations Key actions Consensual restructure accepted by creditors Cessation of ground works division & redundancies Paid off invoice & P&M finance via auction of surplus kit Recruitment of Financial Controller Time frame 12 months Outcome Less debt & lower risk in balance sheet Recovering net asset position More profit, more predictable margin (but lower %age)
- 13. 2014 DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 Mid-Market / Upper SME Focus Galen Partners – Spotlights Wide Sector Experience Practitioners & Entrepreneurs Restructure. Refinance. Rebuild.
- 14. 2014 DAVID HOLE, FEACTP MARK BLAYNEY, IFT GALEN PARTNERS LIMITED Version 1.0 26/08/2014 An Alignment of Trust & Interests Galen Partners – Spotlights Delay = less options / value Restructure. Refinance. Rebuild. Can you afford that ?
- 15. GALEN PARTNERS LIMITED Version 1.0 26/08/2014 Galen Partners – www.galenpartners.co.uk http://uk.linkedin.com/in/dahole http://uk.linkedin.com/in/markblayney Restructure. Refinance. Rebuild.