Acute cash flow worries and downturns in operations have the potential to leave a business fragile and susceptible to changes within the market and particularly vulnerable in uncertain political landscapes. Once a business begins to experience a sudden or continuous drop in revenue, operational underperformance, or to exhibit the early signs of insolvency, swift action must be taken to preserve the company’s value and prevent the business descending into a period of distress from which it cannot recover.
An underperforming business does not equate to a fundamentally bad business; at some point during their lifecycle, most companies will undergo periods of declining performance and face various challenges to its future viability. These threats can be either internal or external to the company, however, both have the ability to plunge a profitable business into a state of distress. Whether a downturn in the market as a whole, or problems more specific to your organisation, action must be swift and decisive and this sometimes requires professional intervention to stem liquidity shortfalls, preserve portfolios, and minimise value erosion as much as possible.
Restructuring and turnaround comes in a variety of guises depending on the company concerned and the specific challenges it is up against. RBR Advisory’s team of industry-leading experts can identify these underlying challenges before creating and executing a solid plan to effect the company’s financial recovery and improve its operational performance.
This process could involve corporate simplification to rid the organisation of unprofitable assets, restructuring existing debt obligations, or looking at ways to improve immediate and long-term cash flow. Regardless of the method implemented, this must be done with a firm eye on protecting shareholder value and sustaining support and confidence from key stakeholders throughout the process. In crisis situations we can place an interim management team to steady the ship and maintain internal relationships while the company’s turnaround is achieved.
Once a business has been stabilised and its value restored, the next phase is to implement a sustainable growth strategy with the aim of increasing profitability and improving operational performance ensuring the company has a viable future.