Construction Company

Due to poor financial advice, poor reporting and huge overspending on capital equipment the client had accumulated over £3 million debt by May 2008. The client had grown from zero to £8m turnover in four years. Debt was proving difficult to collect and cash was very tight.

During an initial review it became apparent that profits had been overstated and that much of the receivables was neither due nor collectible. Collingwood was involved in the refinancing of the client with the support of the lender.

Subsequently the recession, which hit the client within months of the re-financing reduced client revenues to less than £3 million.

But now the client is profitable, has survived and is now making progress to reduce its debt, which currently stands at less than £1.5 million (i.e. less than half what it was). In the role of CFO, Collingwood helped implement changes that resulted in the following:

• Reduction of overheads
• Reorganisation of management and managerial responsibilities
• Improvement in management information and the introduction of job costing
• A policy decision to only take on work that will make good money and to concentrate on added value
• To sell under utilised assets and hire short term if and when required

The client has been released from business support and has repaid its loan.