What's on your mind?
- In breach or about to breach its banking facilities and/or covenants.
- Under pressure from creditors due to withdrawal of credit lines and/or trade insurance.
- Overdue Crown debts.
- Being forced to micro-manage cash/defer payments and making unexpected requests for additional funding from lenders.
- Account moved to lenders high risk lending teams who are requesting more detailed cash forecasts and related information.
Bringing you peace of mind
We work with management to understand a business's need for cash and focus on the preservation and generation of cash in order to satisfy this requirement. This includes:
- Conducting an initial review of cash position/requirements.
- Reviewing and improving cash controls to reflect current position.
- Developing and implementing a robust forecasting process.
- Monitoring results and feeding back forecasting and control improvements.
- Identifying and implementing short term and medium term cash generation and preservation initiatives.
- Developing appropriate internal and external cash reporting.
What's in it for you?
- Need for new monies is minimised and facility and covenant breaches are potentially avoided.
- Visibility over funding requirements is improved significantly and robust forecasting processes are implemented.
- Quick wins delivered which will generate and preserve cash in short term and medium term.
- Tightened cash controls and improved reporting.
- Extra time bought to develop and effect a restructuring plan.
- Cash culture is embedded with skills and processes transferred.
- Experienced and dedicated teams with a clear understanding of who the stakeholders are and what their expectations are.
- Established methodologies based upon a lengthy track record.
- Global network of member firms.
Project Hellidon - Home Improvement Sector
Turnover - £328 million
As a result of continuing difficult market conditions caused by five interest rate rises and a drop in consumer confidence, this UK based home improvements manufacturer and direct selling organisation experienced a significant deterioration in financial performance. Following their quarterly trading update, the Group realised that they would breach a lender's covenant test.
We worked closely with the management team to:
- Identify and implement improvements in the Group's short term cash flow forecasting process to enable greater accuracy of forecasting and visibility of cash requirements.
- Implement cash controls and establish a cross-functional cash committee to instil a cash culture and focus throughout the organisation.
- Identify and prioritise cash generation initiatives. Implementation of the agreed cash generation initiatives provided the Group with additional headroom and breathing space in order to work up a more radical turnaround plan. The strengthened cash position and cash controls enabled the Group to self-finance its restructuring without any delay. As a result, the Group was able to undertake refinancing negotiations with its lender group concurrently with the rapid implementation of its turnaround plan.