Diverse engineering Group which had expanded organically and by multiple acquisitions.  Core disciplines mechanical, electrical, control and instrumentation solutions entailing the provision of the following services:

• Design
• Manufacture
• Construction
• Installation

Decline of key Oil and Gas market together with loss of key maintenance contracts resulted in trading losses and increasing pressures on cash flows. Absence of segmental P&L reporting and lack of visibility of cash flow forecasting beyond two months rang alarm bells with the bank.

• Nine payrolls with personnel working across various revenue streams

• Expenses and costs not sub analysed
• Multi- site manufacturing
• Multi - site contracts
• Unwieldy project costing system
• Standard “costs” were actually “standard sell prices” – labour and materials
• Lack of visibility of relative profitability of different trading activities

• First phase major data analysis exercise
• Reconciled opening sales order bank and WIP in order to forecast jobs to completion
• Identified £500k over statement of WIP
• Produced forecast project summaries for major works
• Extracted forecasts for new work from Group management
• Allocated personnel on payrolls to revenue streams and major contracts
• Substituted actual costs for standard sell prices for labour and materials
• Modelled a labour capacity planner to allocate costs to forecast contracts
• Demonstrated actual profitability of the various revenue streams/contracts
• Produced 21 business segments with individual P&L, BS and CF
• Produced a restructuring plan with incumbent management
• Presented the plan to the Bank

• Identified the profitable and unprofitable parts of the Group
• Identified £2m of potential cost savings which are being implemented including the closure of loss making manufacturing operations
• Group gained three mechanical contracts during the process worth £7m
• Group returned to profitability
• Cash flow improved
• Bank agreed to support the company through the restructuring