Vantage Performance acted as the Chief Restructuring Officer (CRO) for this project.
Rapid growth exposes $100M group to industry downturn
A national group operating in the electrical construction and facilities management industries had grown from $2 million to $97M in just 8 years. Unfortunately, this growth came at a heavy cost.
The company’s growth was partly organic but also involved the acquisition of three businesses utilising a combination of debt and equity. When the industry took a downturn, the company faced a $22M decline in revenue resulting in losses of $5M.
As a result, the business had breached its banking facilities and had an immediate working capital requirement of $3M. To make matters worse its bank debt equated to 8 times EBITDA.
This period of extreme growth followed by rapid decline had placed extreme pressure on the board and its management team.
How we turned things around.
Our first step was to conduct a strategic review of the group to assess their options whilst implementing a crisis management and stabilisation plan. An aggressive working capital management plan was executed which improved cash flow by $5.1M in the first 100 days.
A comprehensive 2 year turnaround plan was implemented. Operating costs were reduced, $10M in creditor payment plans were secured and an agreement was reached with a major creditor to write off $4M of their debt. We also secured a $4M working capital facility to enable the partial refinance of the lead financier.
After a successful implementation of the turnaround plan we project managed a full refinance of the lead financiers’ facilities to the value of $17M, 6 months ahead of plan.
The Outcome.
The group’s revenue increased from $75M to $100M, earnings improved by $5.2M and enterprise value increased by $20M. An extremely pleasing result as 350 jobs were saved.
In conjunction with our client we received the Turnaround Management Association “Turnaround of the Year Award”, Large Company category.
I want you to know how personally grateful I am for what you did for us. I will never forget it.
My philosophy is that there is always a way to solve a crisis, as long as you’re engaged early enough.
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BioBio
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Michael is the founder and CEO of Vantage Performance.
Michael is passionate about helping businesses solve their biggest challenges and seeing the positive impact this has on people’s lives.
“In a time of financial stress, maintenance of the confidence of financiers in a client becomes more challenging even with a robust workout plan. Michael’s experience and strong reputation with financiers positions him well to bridge this confidence gap between financier and client. This, coupled with his advice in the preparation of a turnaround plan makes him a key player in any successful business turnaround.”
Oliver Martin, CFO, Smithbridge
“We engaged Michael and the Vantage team to provide a strategic review and implementation plan to assist us re-position our business after a challenging period. The team’s knowledge, commitment and professionalism were well regarded by us and this was instrumental in achieving our goals for the review and our business going forward. The credibility, discipline and momentum provided by the team was everything we hoped for and I am very happy to recommend their work.”
STEPHEN BARNARD, CEO, NATIONWIDE HIRE
“Michael ran the project well and on time. The outcome was increased financial support from our Bank to allow us to implement a business sale without cash flow pressures.”
JOHN POWER, GM, PROSERPINE SUGAR
“Michael and I have worked on a number of matters together for mutual clients. I have always found him to have a detailed understanding of the key drivers that impact on the ultimate outcome, and an unwavering focus on obtaining the best possible result for his clients.”
LUKE MOUNTFORD, PARTNER, HOPGOOD GANIM LAWYERS
“Whenever I identify that a client needs assistance to guide them through tough financial circumstances, I have no hesitation in recommending Michael. I have worked closely with Vantage on a number of turnaround and profit improvement assignments and they are the best in the business.”
SCOTT BUTLER, PARTNER, MCCULLOUGH ROBERTSON LAWYERS
“CBO Telecommunications sought the advice and services of Michael and the Vantage team last year when the mining industry made it very difficult through extended payment terms for SMB’s to participate in our day to day business. Michael not only brought a wealth of knowledge and industry peers to the table for us to navigate a path forward, he also managed the implementation of short and medium term strategies. We had a very successful outcome and continue to strive to be a thought leader in our market.”
Mark McGregor, Managing Director, CBO Telecommunications.
“Michael has made a fantastic contribution to the turnaround at SubZero Group. His support, drive and understanding of what it takes is greatly appreciated.”
Joe Clayton, CEO, MRS Plc
“Michael is a genuine turnaround expert. Michael will get to know your business very well and formulate a creative and practical plan to overcome the difficulties you face. Michael is also adept at adjusting and varying the strategy as things progress and change.”
Paul Betros, Partner, Hopgood Ganim
“Michael and the team at Vantage Performance have completed several assignments for me. They have always exceeded expectations with attention to detail and an intimate knowledge of the business and industry they have been asked to assess. If they don’t know an answer they find it and provide practical solutions to get the best possible result.”
Russell Morrison, Director, Westpac Bank
Michael Fingland has 20 years’ experience in business transformation, restructuring and turnaround.
Moving from a Chartered Accountancy background into corporate advisory he has worked in a wide range of industries from mining services, retail, agri, civil, transport, manufacturing, telecommunications, engineering to construction.
Michael has been awarded the “Australasian Turnaround Professional of the Year Award” by the Turnaround Management Association and a number of his client engagements resulted in Vantage Performance winning the “Turnaround of the Year Award” ten times.
Michael is a columnist for The CEO Magazine and regular contributor to other publications such as the AFR and BRW.
Qualifications
Chartered Accountant
Bachelor of Business, CQU
Awards
Australasian Turnaround Professional of the Year Award by the Turnaround Management Association (TMA).
Ten of his client engagements resulted in Vantage Performance winning the “Turnaround of the Year Award”.
Successful turnaround and restructure that led to a refinance of the Groups debt facilities totaling $17M, an increase in earnings of $5.2M and an improvement in enterprise value of $15M.
Strategic review and turnaround for a diversified agribusiness with annual turnover of $110M. Initiatives resulted in a 31% improvement in enterprise value increasing from $87M to $115M. The recommendations also resulted in a $30M improvement in working capital including a capital raise of $22M.
Strategic review and turnaround of a mining services company resulting in an increase in enterprise value of $39M. Key actions included revenue growth, stakeholder management, working capital management, internal systems controls, tender/contract governance, $30M capital raise and vendor due diligence.
