Companies that have had a prolonged period of poor financial performance are at risk of becoming insolvent. They can often benefit greatly from a fresh perspective. First Key’s Turnaround Services involves a structured process to identify key issues causing underperformance and provide recommendations on how they can be fixed. These engagements culminate in a detailed Turnaround Plan that estimates the financial benefit expected from implementing each recommendation.
Securing additional capital from investors may be contingent upon management of the brewery working with external independent consultants to execute or oversee the Turnaround Plan. In providing Turnaround Services, our role is to ensure that: (i) projects with the biggest payback (i.e. additional revenue or reduced costs) are addressed first and executed properly; (ii) new capital is invested on approved projects only; and (iii) the expected benefits are realized, measured and communicated to stakeholders.
Despite the best of intentions, there are many reasons why a brewery or beverage company may run into financial difficulties. In these situations, secured lenders will have some tough decisions to make. “Do we continue to support the company by extending further credit while management undertakes a turnaround plan?” or “are the problems faced by the company caused by structural market conditions beyond management’s control?”
First Key offers Business Review Services to assist secured lenders in evaluating their options to make a sound decision. A Business Review entails: (i) management interviews aimed at discovering the root causes of poor performance, (ii) a detailed review of operating results focusing on profitability and cash flow (including a 13 week forecast, if requested); (iii) assessment of financial reporting and budgeting systems; (iv) a high-level operational assessment that seeks to determine if the company would benefit from First Key’s Performance Improvement Program. A Business Review report will provide recommendations and options for the lender to consider, along with the pros and cons of each option.
Follow on engagements might include: (i) a review of the lender’s security position, including a formal equipment valuation if appropriate; (ii) ongoing support through a (monthly or quarterly) Monitoring Engagement to provide timely updates on key developments, and analysis of financial performance against plan.
We will happily work with you to custom-tailor our services to meet your needs.