Background: This multi-disciplined industrial water and waste treatment contractor, based in Berkshire, offers a national service providing clients with a portfolio of equipment and service solutions. The company has a dynamic management team and a highly skilled workforce but has struggled to make significant profits despite being consistently busy.
Issues: The business had struggled with profitability and cash pressure so it became necessary for the company to change its bank. The new bank suggested that they should talk to Secantor with a view to helping them review their business model so as to improve profitability and control working capital.
Actions: A Secantor FD joined the team on a part-time basis and introduced, guided and assisted the team with the following changes:
A comprehensive review of the business with advice to determine future direction and goals including detailed business plans for five years.
Restructure of the different profit centres with a focus on personal accountability for profit performance v plan.
An overhaul of the accounting systems and introduction of regular monthly financial reporting and a dashboard of operational information to aid commercial decision-making as part of structured monthly Board meetings.
A switch in emphasis from purely sales volume to the gross profit margin achieved on every sale.
Liaison with the bank to ensure information, securities and covenant requirements are fulfilled.
Mentoring of Executive Directors in preparation for taking over the ownership of the company upon the Founders retirement.
Mediating between the Founder/Owner and the four Executive Directors in the transfer of the business ensuring a seamless journey through the vesting process maintaining capital adequacy throughout.
Outcomes: The management team quickly embraced the strategy recommended to them and the company was restructured with clear lines of responsibility and reporting. Profitability increased almost immediately and the first year under the new business model resulted in a bottom-line result that was many times the previous best. The client has achieved further growth and the value of the business is greatly enhanced whilst the Secantor FD sits on the Board acting in a Facilitator role.
Chairman’s Quote:
“It's true to say that Secantor has transformed a struggling company, but full of good people, into a very, very profitable company full of very, very motivated, happy, well rewarded people.”
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