June Newsletter 2014

NEWSLETTER JUNE 2014

Unlocking cash to create value

Icknield has a particular expertise in the effective management of cash and working capital.

In almost all companies that we work with there are opportunities to improve the procedures for cash management and ‘unlock’ cash for use in the business.  We usually find that the easy targets such as collecting overdue receivables have already been addressed but in the majority of cases we find other ways to release cash that is unnecessarily tied up so that the business has lower working capital requirements.

In one Icknield project we found that the company had £40 million of  finance leases used to fund plant and machinery purchases which were being paid off over 3 year terms.  The assets’ lifespan was considerably longer so, as part of the restructuring, we re-negotiated the terms of these leases to include a payment holiday and a longer repayment period resulting in around £8 million and £3 million of working capital being unlocked in the first year and second year respectively.

In another example, Icknield worked with a company in the Oil and Gas sector that had a strong order book but was short of working capital.  This was affecting its ability to fulfil orders in a timely manner and holding back growth potential.  Icknield advised a renegotiation of terms with customers so that an upfront deposit was taken with orders.  This provided the working capital to enable the business to increase production and meet customer demand resulting in EBITDA growth without increasing borrowings.

Where are they now?

Vio Worldwide Limited

The company was founded in 1998 as a joint venture between a major UK plc and an overseas partner.  It provided delivery software services to the print advertising industry.  In 2001 the business was loss making and the two partners decided not to continue to fund it.  Icknield were appointed to assist in the orderly closure of the business.  The head office was based in the UK but the company also had offices in the US, Japan and France.

Icknield worked alongside management to prepare the business for closure.  Credit control was introduced and outstanding debtor balances were reduced.   Staff numbers were rationalised and some offices were closed down.   The process was so successful in reducing losses whilst maintaining services to customers that the business attracted interest from a buyer and was sold less than six months after commencement of the project.

The business continued to grow successfully post acquisition, re-establishing its US business, launching new European products and acquiring two more businesses, making it a world leader in digital supply chain technology for print advertising.

In 2010 Vio Worldwide was acquired by an Australian company and continues to provide its services on a worldwide basis.

Icknield News

Icknield continues to attract projects with cash and working capital challenged companies where there is a need to manage cash tightly and to create visibility on cash needs, working capital requirements and trading performance.  Since the beginning of the year we have begun working on 5 new projects and have 9 projects which are currently ongoing.  These include cash management, restructuring and turnaround projects.  We have been joined by a new associate who has increased our capacity to take on more work.

Mark Russell

Mark joined the Icknield team in April 2014.  He has known Steve Smith for 20 years and has a background in corporate recovery, having worked at both Arthur Anderson and KPMG.

He has spent the last 9 years working as an independent executive with companies who are in a growth phase and/or have cash flow issues.

Mark has joined the Icknield team to help work with cash challenged SME’s.  He is currently working on a project for Icknield with a recruitment company.

What our clients say…

 Owner, SME business in healthcare sector

At the end of 2012 my company was facing very severe financial difficulties. We needed expert help and guidance to steer us away from liquidation.  We were fortunate to appoint Ran Oren of the Icknield team. They immediately took control of the cash flows and general financial business management.  They dealt with all aspects of the business, dealing with impatient creditors and in particular the Inland Revenue and the Banks. They were available at any time of the day and acted quickly and efficiently to any problem that arose.  They were thoughtful patient and considerate to the Directors but with great calm and certainty they succeeded in turning the business around. They are a very professional organisation and we would actively encourage any business with need of financial advice to enlist their help.

About Icknield

Icknield’s team of business turnaround specialists assist companies through cash crises and restructuring.  We understand the need to respond quickly to an urgent requirement for help and will make ourselves available at very short notice.

Our ability to quickly field an experienced turnaround executive or a team where necessary has been critical to the ultimate survival of many of our clients.

For further information please see www.icknield.com or contact one of the team.