Technological development moves fast and can catch companies unawares. Key people are also mobile and can leave at critical times. Competition in these sectors is fierce and whilst margins can be high, competitive new products, systems and ideas can hit revenues, whilst costs may be more difficult to adjust. In these situations assistance from our professionals can be the difference between survival and failure. We have experience covering advertising agencies, law firms, software houses and manufacturers of “hi-tec” equipment. Tally Genicom, a German-based manufacturer of hand-held printing equipment for the retail industry faced competition from low-cost and better equipment from Asia. It made the decision to source from China but that left it with a high cost structure of European manufacturing and distribution. We led the project to downsize the European business, saving €14 million of costs on a €140 million turnover, most of which dropped to the bottom line.
Fusion, a software house, suffered financial difficulty as part of its product offering came under competitive pressure. We guided the company to progressively exit the loss-making segment whilst managing liquidity as the company avoided insolvency to survive. A Media Services Business under liquidity pressure from customer losses was assisted by us to manage its costs, cash and creditors, avoiding insolvency whilst it negotiated new and profitable contracts to survive. IT equipment manufacturers are also vulnerable to rapid technology change, as happened with Coriant, which was close to insolvency in Germany and Finland. We worked with Conway Mackenzie to analyse options that led to a refinancing of the business. Modular Inkjet Technology had burnt through more cash than its parent company could support in introducing a ground-breaking product to market. We helped the company analyse the problem, propose a solution and help execute implementation, allowing the company to be sold as a going concern.
Our professionals have the expertise and industry knowledge to help companies in these industries stay competitive in a fast-moving world.
Notes, insights and reflections from Matthew, one of our directors and turnaround experts, as he works with companies during Lockdown.