Turnaround case study 2
Turnaround situation
- R100m turnover security/building products company.
- Posted R12m loss - we restated this as R18m loss during Diagnostic Review.
- Simultaneously approached by bank and client for a turnaround.
Turnaround management intervention
- CEO position.
- Interim MD and Manufacturing Director positions.
- 6-person consulting team for 3 months.
- Stabilisation: cash management, new controls, working capital reduction.
- Funding: Bank and World Competitiveness Fund.
- Fixing: total overhaul of the business.
Turnaround results
- Profitable and positive cash flow from month 3 onwards.
- Overdraft decreased by 75% over 9 months.
- 700 jobs saved.
- Fees recovered in 3 months.
- Company's assets sold as going concern after 1 year for R45m.
- Bank recovered its full exposure.
- Shareholders received R19m.