The company undertook specialist construction contracts in a number of different sectors under a number of different business names, whilst it also had substantial interests in a number of property development situations.
The company’s FD had resigned, its management accounts were three months behind, the MD had no idea whether its construction contracts were making money or not, the bank account was hard up at its overdraft limit, there were substantial disputes arising over the property development situations, and to cap it all the company was facing an employment tribunal claim from a dismissed employee.
Unsurprisingly the bank commissioned an IBR to help it to understand where the company stood, what its prospects were, and whether the bank should continue to support it or not.
In order to produce information to enable the IBR to be conducted the business brought in, with the bank’s help, experienced advisors to work within the company who were able to:
- Rapidly bring the accounts up to date;
- Get cash under control;
- Investigate each contract to establish its profitability or otherwise for corrective action;
- Use this information to produce meaningful business forecasts; and
- Enable the reviewer to complete their review.
As a result of this work and joint discussions between the company, the bank, the reviewer and the supporting advisers, the company was able to:
- Regain control of its contracts and operations and was able to manage their profitability going forwards.
- Devise a strategy to divide the business up into separate trading and asset holding entities, so that each part of the business, and its relevant risks and assets, could be properly managed.
- Obtain the support of its bank to this strategy.
- Recruit in a new permanent FD to both help implement the changes required and to properly manage the finances.
The group is now highly profitable and successful with substantial cash reserves.
|
|
What To Do When You Need To Survive an IBR
To request your FREE e-book and monthly newsletter subscription please complete the form or |
