Manufacturing Company
The Company
This traditional Glasgow based manufacturing company working in the construction sector had been established for 30 years and had lost around £1 million in the previous five years. Management were at a loss as to how to change the fortunes of this well know industry name. A well respected company with good products, sales were falling and cash was under severe pressure and the business was facing administration.
The Assignment
This traditional Glasgow based manufacturing company working in the construction sector had been established for 30 years and had lost around £1 million in the previous five years. Management were at a loss as to how to change the fortunes of this well know industry name. A well respected company with good products, sales were falling and cash was under severe pressure and the business was facing administration.
The Assignment
- Introduced to business by Scottish Development Finance (now Scottish Equity Partners) to strengthen the management team as part of a refinancing and rescue package
- Took on role as Managing Director with specific responsibility to manage a change in corporate culture and return value to shareholders
The Plan
- Secure new venture capital funding to refinance business
- Restructure business to stop losses and cut costs
- Implement plan to achieve operational breakeven within 2 years
- Improve cash management and financial forecasting
- Reduce bad debts and introduce strict credit limits for all new projects
- Rebuild management team and staff moral
- Secure more lucrative contacts with improved margins
- Improve production efficiency and manufacturing margins
The Results
- Stopped losses within twelve months and returned business to profitability
- Increased gross margins from 25% to circa 40%
- Turnover has increased by over 300%
- Reduced bank debt from £1.1m to zero in 10 years
- Created exit for SEP in April 2001, giving an excellent return to shareholders
- Sold business in August 2006 to trade buyer, returning a significant profit to shareholders
