Fabrication Industry Pre-Pack Administration

Typically a business can be saved if early advice is sought.  Gore and Company were asked to complete a business review and establish the true financial and trading position of a company involved in steel fabrication for the construction industry.   This was intended to support a client's decision about the future of their company.

The business review comprised:

  • An industry review to establish key industry trends, success factors, competitive strengths and weaknesses, SWOT analysis, industry growth targets and current and future market trends 
  • A business review, including product -, demand, competitive position of the business, drivers of financial performance, etc.
  • A look at revenue growth and differentiatiation between organic and non organic growth
  • A review of sales projections looking at geographic and customer segmentation factors 
  • An understanding of the balance between contracted versus un-contracted business

The business review made use of a range of tools and techniques, including:

  • RAG analysis (red, amber green)
  • A quantification of sales risk and its impact on cash flows
  • A review of seasonality in the business and its impact on cash flows
  • A general review of sales trends
  • Standard business reporting ratios and KPIs
  • Scenario planning i.e. going concern versus forced sales of assets
  • A review of lending and associated borrowing securities

Our review showed that although the construction industry was being impacted by the credit crunch, the business had customers mostly involved in public sector construction projects which gave it good prospects for rescue and recovery.   The business review lead to further work to develop a rescue plan: a way forward for the business and a plan of action.  

We were asked to assist directors, by marketing the business discretely for sale, to obtain a fair market valuation for the business in support of a "pre-pack" sale of the business to its management team.   It was essential to ensure that the management team paid a fair market price for the business.  

The pre-pack procedure allowed the business to be sold to the management team on the day of our appointment as administrators.