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Interim Turnaround Management Team

Your means of getting a business back to profitability

Many business ideas fail to reach their potential and achieve success. It is rarely a case of bad luck, and most often the result of poor management, perhaps coupled with insufficient funding.

Usually, the unsuccessful entrepreneur is very good at one or more of the disciplines needed to make a success of their business, but has shortcomings in one or more key aspects of the management. It could be HR, Operations, Marketing or Financial Management. There are so many important areas that require both ability and knowledge. Sometimes it is merely the lack of someone acting as an effective Chair that is the problem.

Anglia Business Resources is a group of independent, successful business professionals who can come together at short notice to review a business and identify those areas where management support is required. Crucially, they are able to take a “hands on” role in managing the business and taking it forward. They are able and willing to be appointed as Directors of the business and can act as guardians of the creditors’ interests.

If the current lender is unable or unwilling to continue to finance the turn round Anglia are able to look at refinancing all or part of the business with another lender.

Turn round case 1

Background: Major Airline catering business with operations at Gatwick and Heathrow, turning over £100 million in a worsening market and a highly unionised workforce of 1500.

Diagnosis: The annual wage demand would make the company unprofitable. The company had developed a reputation of conceding to wage demands, and had seen falling margins. The decision was to make a stand whilst the organisation was still strong enough to do so and to increase productivity to restore profitability.

ACTION: Managed the union through the summer period to minimise the impact of a strike, took decisive contingency action including recruiting a replacement workforce and giving notice of
dismissal to all strikers

Result: The company lost the strike ballot vote but the union settled under extreme pressure for a below inflation agreement and increased productivity. Created a positive working environment where the management and union respected each other and increased profitability.

Turn round case 2

Background: Established £4m turnover packaging manufacturer confronted with industry wide recession saw profits slump as sales fell, exacerbated by a vicious price war.

Diagnosis: Cut cost base without compromising quality and service delivery in order to maintain viability of the business in the short term.
Review and rationalise operations to provide a new base for capitalising on longer term potential of business when industry cycle turned positive.

ACTION: Implemented plan to reduce staff by 30%, selected on basis that ensured that production rates were not jeopardised, rationalising activity to increase flexibility of operation. Secured buy-in of management, supervision and other staff to plan.

Result: Turn-round to break-even position quickly achieved. As business cycle turned increased sales effort and better cost base than competitors enabled company to invest in mechanisation and automation, and to post higher profits than ever previously achieved.

Turn round case 3

Background: Manufacturing company turning over £7 million, spread over 5 sites, with 120 employees. The company was loss making, due to a drop in demand for some of its products and a recession in part of its customer base. The company was being squeezed between high-end high volume competitors and low-end cheap, low cost base suppliers.

Diagnosis: Too many fixed costs tied in with the five sites, some duplicated activities, with over reliance on one customer (90%) by one division. Some product lines were unlikely to be profitable, given the costs of production and low volumes.

ACTION: The number of sites was reduced to two and work force to 60. The sites to be closed were gradually run down and the profitable lines were transferred to the remaining sites. In nine months the customer base was expanded for the division that was reliant on one customer. The proportion of sales to the single customer was reduced to less than 50%. Action was also taken to improve cash flow by stock reduction and improved debt collection.

Result: The company was turned round to a profitable state, with a wider customer base and improved cash position.

If you would you like to know more contact John Richardson on
01279 817102 john.richardson@abr-ltd.com or Robert Lee on
01279 757005 robert@abr-ltd.com to arrange an informal initial discussion.