Optimise the potential of your business
A key indicator of a successful business is its ability to maintain a strong balance sheet and forward outlook despite the day to day fluctuations in short term profits – “maintaining the underlying value”.
A turnaround that can focus on increasing underlying value over the long-term enables the true health and value of a company to be sustained and reinforced.
All too often advisers make changes to the capital structure of an organisation, focusing on a short-term solution to operational distress (the “get in, get paid, get out” approach) without paying due consideration towards ongoing liquidity needs and other long-term financial stresses. This short-term view ultimately leads to more severe capital distress, and potentially the ultimate failure of the enterprise.
The idea of underlying value and taking a long-term approach to view a company’s sustainability lends its self to how Olvera approaches operational and financial transformations.
The SICS™ Guide was designed by Olvera Advisors to be used in any form of transformation or restructuring assignments. It has a specific focus on distress situations where companies are in an extended liquidity crisis and directors are concerned about their company’s continued ability to trade.
Olvera’s SICS™ Guide for the management of companies in distress is set out in four phases:
Phase 1: Stabilisation and Resourcing
This phase focuses on two core resource issues necessary to stabilise a company sufficiently to allow for a more detailed diagnostic to take place. Firstly, the fundamental ability of the current management team to create, plan and execute any change transformation while maintaining stakeholder confidence both internally and externally, and secondly the ability of the company to generate the liquidity necessary to underwrite any operational or financial transformation.
Phase 2: Information and Analytics
This phase focuses on the diagnostics to assist a clear understanding of the issues the company is facing. A methodology for carrying out this diagnostic work is set out in this section. The SICS™ Guide provides a framework for carrying out a review of the company’s markets and operations (including its management capability) and for preparing the financial analysis. It also provides techniques for converting the findings into a documented restructuring or transformation plan
Phase 3: Communication and Stakeholder Management
This phase focuses on stakeholder identification, responsibilities, relationships, and messages. These include the cultural change programmes necessary to align and engage internal and external stakeholders in the transformation process.
Phase 4: Strategy and Execution
The output of any transformation process is an executable plan to deliver the identified courses of action. The SICS™ Guide deals with the review of forecasts, sensitivity analysis, financial and business modelling, and drawing up contingency plans for the restructuring programme.
This process is able to transform the company and create a more financially beneficial environment that increases the organisation’s value and supports sustainable operational change.
Olvera’s team of advisors work with management and directors through our sics™ programme to:
- Provide independent analysis of the current financial performance;
- Deliver cost out programmes and exit strategies for underperforming assets and operations
- Re-negotiate onerous contracts with suppliers and stakeholders
- Identify the mechanisms to drive profit growth and cash flow generation;
- Build sensitised financial models that forecast and track financial performance; and
- Create strategies to communicate to lenders and investors that seek to maintain trust
Contact us today for an obligation-free consultation with one of our specialists.