Business Turnaround Director | Chilled Food Company

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A Chilled Food Company

Sector: Chilled Food
Owner Type: Management Buyout from Family
Turnover: £8m

£8 million turnover food business which exhibited strong historic growth in both December turnover and earnings through to 2006 when acquired by the management team.
Business forecast to be profitable in 07/08, however in reality losses were escalating.
Increased gearing and losses created in a cash crisis which would result in insolvency if it could not be overcome.
In the event of insolvency the factors had a first change and the family had a change so there would be no recovery for unsecured creditors.
Accounts needed to be filed at Companies House.

Payment to the family for the business had imposed costs that were too high for the ongoing business.
Significant investment in a warehouse had greatly increased the overhead cost base and financial gearing.
Stock piling of the base commodity had overstretched the cash requirements of the business.
Commodity dealing in a time of rising prices had added risks to the business.
Creditor days were stretched to over 60 days causing some supplies to go on stoplists so some orders could not be fulfilled.
Financial controls were weak and margin analysis was not accurate.

In mid 2007, a multi disciplined team was introduced with myself acting as Finance Director. An insolvency practitioner advised all parties on their personal situation.
All financial figures including forecasts were consolidated into one report which was the baseline for the future.

To establish the true stock position and reflect in the financial results.
To make sales in areas where margins were maximized at a time when the base commodity was in short supply.
To explore potential exit routes.
To explore alternative finders.