Electronic Products Manufacturer - £6 million

The client was a family owned business specialising in the design and manufacture of household electronic products such as shaver sockets, extraction fans, emergency lighting etc. The firm had experienced significant growth from £3m t/o to £6m t/o, but was going through a period of loss making.

The firm had a management team of husband and wife, plus three long-term employees who had been with them since leaving school. The owner had become unwell and the firm simply did not have the managerial capability of managing the larger enterprise. Collingwood was hired as CEO to improve the performance of the firm.

The main actions taken by Collingwood were as follows:

• Huge cuts were made in overheads. Jobs were redefined and £200k savings pa produced in overheads without reducing control, reporting or compliance.
• Efficiencies were made on the production lines so that produced hours (all production tasks were timed) more closely matched paid hours. This resulted in £250k pa savings.
• Perpetual physical inventory was introduced and the number of stock outs reduced radically without significant impact on investment in stock.
• Formal management accounting with forecasting was introduced to show management the implications of actions taken and also to show the financial trend of the client organisation.
• Within six months and with 46 days of Collingwood involvement:
1. The profitability of the client moved from £100k loss to £500k profit at EBIT level on an annualised basis.
2. Creditor days moved from an average of 105 to 50.

Contact Collingwood Management at a.condie@collingwoodmanagement.co.uk
or call 07710 376746