{"id":10923,"date":"2014-12-24T19:46:10","date_gmt":"2014-12-24T19:46:10","guid":{"rendered":"https:\/\/www.leadershipof.technology\/?post_type=avada_portfolio&p=10923"},"modified":"2025-06-02T10:32:39","modified_gmt":"2025-06-02T10:32:39","slug":"r-bennett-construction-turnaround","status":"publish","type":"avada_portfolio","link":"https:\/\/winningthinking.co.uk\/?avada_portfolio=r-bennett-construction-turnaround","title":{"rendered":"R Bennett Construction Turnaround"},"content":{"rendered":"

Background<\/strong><\/p>\n

The well established\u00a0 niche construction company had been trading profitably since the 1940s.\u00a0\u00a0\u00a0 \"\"The relationship and trust had broken down between the owner\u00a0 and his succession plan ( MD & Board ).\u00a0\u00a0\u00a0\u00a0\u00a0 Margins had dropped from 35% 2 years ago to 10%. The business had become increasingly loss making over the last 4 years and cash was becoming critical. Management had become overwhelmed by cash pressure and had failed to respond to the challenge they faced. \u00a0\u00a0 The business value in the joinery and maintenance was hidden behind some unprofitable construction contracts.\u00a0\u00a0\u00a0\u00a0 There was a bank meeting planned to review the last 12m profits and plan.\u00a0\u00a0 The balance sheet and bank position was secured by a property.<\/p>\n

Ability to integrate into the client company<\/b><\/p>\n

Tom met the business owner and his wife on Sunday evening with the corporate finance partner.\u00a0\u00a0\u00a0\u00a0 That evening the equity and likely role was agreed.\u00a0\u00a0\u00a0 On Monday the incumbent MD was removed and Tom took over on Tuesday.\u00a0\u00a0\u00a0\u00a0\u00a0 Immediately repaired the family owner \u2013 operating board relationship, got a grip on the cash and financial position, and identified the turnaround plan and MBO \/ prepack options, and evaluated the construction contracts and cash impact.<\/p>\n

Impact on the business \/ bottom line<\/b><\/p>\n

The business was short of c1m cash to continue trading: pre or post restructuring.\u00a0\u00a0\u00a0\u00a0\u00a0 Newco was defined and prepack \/ funding \/ investor put in place.\u00a0\u00a0\u00a0\u00a0\u00a0 The prepack sale was inconclusive so the business was put into administration in order to protect the directors duties and creditors positions. On presentation of the plan to the customers they determined their contracts, and the business was put into liquidation.<\/p>\n

The sales and marketing plan was created to recover and support Newco margins.<\/p>\n

Overall contribution \/ achievement of objectives<\/b><\/p>\n

Within 2 weeks the bank overdraft and loan was repaid in full, improving the bank position by \u00a3500k.\u00a0\u00a0 Creditors will receive a substantial dividend: and the complete collapse of the business prior to concluding the process was averted, retaining c80% of the debtors book value.<\/p>\n

Working style<\/b><\/p>\n

Got the team on board from day 1: relationship and motivation focused to retain the employees engagement; right up until the end of the traumatic complex process.\u00a0\u00a0\u00a0 Put the management structure and review process in place to define team accountability, triage cash and get complete financial control.\u00a0\u00a0\u00a0\u00a0\u00a0 Got a complete grip on the cash and profit position of the business, using external support \/ to enable the FD \/ board to cope with their roles.<\/p>\n

Leadership \/ people management skills<\/b><\/p>\n

Some comments:\u00a0” excellent work ” ” the preparation and delivery of the turnaround was near text book stuff \u201c \u201cteam were fully on board\u201d \u201cachieved a complete handle on the financial position \u201d . \u201cTragic that he arrived to late\u201d.\u00a0\u00a0\u00a0 Shop floor comments \u201cat last” ( referring to the fact at last there was a good plan )<\/p>\n","protected":false},"excerpt":{"rendered":"

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