We were introduced to the directors of a specialist structural timberwork company by its accountants who were concerned by a poor trading performance reflected in the previous year’s accounts.
This was principally due to exceptional costs on a particular contract and a significant bad debt which also occurred in the same financial period. The balance sheet did not look healthy and cash flow had become a major problem. The company was trying to service its historic debt obligations to the Crown departments which had built up during this time of poor performance. The company’s order book was full and there were confirmed substantial orders in the pipeline. Projected work/invoicing supported the view that the company could operate profitably in the future if it could overcome its liquidity issues.
Detailed short term and long term cash flows were prepared and analysed for the purpose of negotiating with the Crown departments in order to agree a payment plan with them that was both realistic and workable. The Crown’s support was secured.
Kingsbridge have continued to advise the company and monitor the position over the past three years. Due to the effect of the general economic climate and the inevitable changes in performance over that period of time, amended proposals have been put to the Crown. These have been supported by updated projections and detailed analysis of the order book and invoice payment dates. The Crown departments have continued to support the company due, in the main, to the comprehensive statements that were included in correspondence to them and in their most recent correspondence have commented that they applaud the commitment the company has shown in ensuring its liabilities are met.