Dunn Healy Advisory
Case Studies – of some examples cases we have worked on.
Turnaround and Transformation - Engineer.
The Challenge:
A worldwide independent professional association (“Engineer”) instructed the team to review and advised an a turnaround and transition plan in relation to an underperforming and capital-intensive recent acquisition (“Training”). Training provided vocational and educational courses to adult clients funded by the individual, charities, member fees and government support. The acquisition cost was self-funded by Engineer with the anticipation that Training would be self-funding post-acquisition. Training’s performance did not proceed as anticipated with significant losses incurred with course funding being disputed and refunded.
The Approach:
Our team conducted the project over a 2-month period along the following lines.
- A forensic audit of historic, current and financial projections to confirm or otherwise their reliability and integrity.
- A review of historic and current training contracts to assess their actual completion in comparison to reported completion with any variances identified and accounted for.
- Detailed interviews and engagement with all relevant internal staff, training providers, professional advisors, and external stakeholders.
- Tailored reporting requirements agreed at the outset to facilitate both daily verbal, weekly written summaries to detailed presentations to individuals, various internal supervisory/financial boards, independent trustees, and external stakeholders
The Result:
- The process identified the following points.
- A lack of due diligence on the initial acquisition and recommendations as the any future targets.
- Undisclosed and un-recognised costs and losses.
- Inappropriate funding provided for courses which were either incomplete, fully funded in advance or not provided.
- A funding requirement to address the current shortfall with estimates as to future requirements to facilitate a turnaround of the acquisition.
- Recommendation on the structure and transition of Training to preserve both its and the financial future of Engineer.
- Support required to Engineer in its engagement with external stakeholders to rectify the position.
To help in transitioning both Target and Engineer, the team actively engaged with the various independent Trustees, third party professional advisors and external stakeholders to achievement the outcome.
Restructuring for Growth and Sustainability – Dean’s Institution
The Challenge:
Dean's institution was rapidly running out of money, and the first step was to stabilise the position and understand the actual cash need and how much time that would afford the company. After securing funding to cover the emergency need, the team had a brief timeline to consider what options were available for the future, given the institution's specific set of circumstances.
The Approach:
The team considered several options, including what would happen is no action was taken.
- amending the business plan to grow cash generating parts
- considering sales and mergers
- combining parts of the above options
- diversification into new areas of pedagogy
- alternative use of the estate
Sensitivities analysis was added to all the options to truly test the scenarios and possible outcomes. We also reviewed what an insolvency situation would look like, along with costs and outcomes to allow the board to see the full picture of possibilities being faced.
After reviewing these options, the team chose to streamlining and removing some of the more aspirational items of the business plan to allow resources to be focused on those actions that would bring sustainability and build a stable platform for future growth in the shortest time. The team recognised that restructuring would require cost-cutting actions to be taken alongside longer-term transformational actions to enable a sustainable future.
The Result:
By streamlining the business plan and focusing on key actions for future growth and sustainability, Dean's institution was able to build a stable platform to allow for future growth. The approach of combining cost-cutting with longer-term transformational actions enabled a sustainable future, rather than just closure and insolvency. The team's approach to restructuring and transformation serves as a valuable lesson to other organisations facing similar challenges and action, as one without the other can lead to disastrous consequences.
Unsustainable business plan long term – Specialist University
The Challenge:
The small and specialist university is a well-established institution in the UK with a long history of providing quality education and research opportunities to its students. Over the years, the university has grown, expanding its operations and student enrolment. However, in recent times, the university has been facing financial challenges due to its non-sustainable business plan in the medium term and the status quo no will no longer work in the long term. The university's business plan has been heavily reliant on student enrolment and tuition fees, with little emphasis on diversifying its revenue streams. This approach has left the university vulnerable to changes in the education sector and economic downturns.
The university's non-sustainable business plan has led to a situation where the institution is unable to meet its financial obligations over the long term. Although there is no immediate cash need, the university's financial situation is not sustainable, and changes must be made to ensure the institution's long-term viability.To address the financial challenges, the university has already implemented major cuts to its staff, particularly in the arts department, and is running on bare minimum resources. However, these measures alone are not enough to address the underlying problem.
The approach:
To address the university's financial challenges, the institution needed to amend its business plan to add new actions to be more sustainable over the long term. This approach required the university to focus on diversifying its revenue streams, reducing its reliance on student enrolment and tuition fees.To achieve this, the university considered several measures, including: Developing new revenue streams: The university explored new opportunities for revenue generation, such as research grants, partnerships with industry, and alumni donations, multi party group, alternative use of assets and alternative use of student accommodation when not used. Streamlining operations: The university can optimise its operations by reducing costs, improving efficiency, and identifying new areas for cost savings, this could allow funding for a new area to be invested in.Improving student experience: The university can focus on improving the quality of education and student experience to attract and retain students.Emphasising innovation and entrepreneurship: The university can foster a culture of innovation and entrepreneurship, encouraging students and staff to develop new ideas and businesses that can generate revenue for the institution. Collaborating with other institutions: The university can collaborate with other institutions, both locally and internationally, to explore new opportunities for revenue generation and cost savings.
The Result:
The university's non-sustainable business plan had left the institution vulnerable to financial challenges that could have long-term implications for its viability. However, by amending its business plan and implementing measures to diversify its revenue streams and reduce costs, the university has ensure its long-term sustainability and continue to provide quality education and research opportunities to its students.
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