The leisure sector encompasses a broad range of businesses including hotels, gaming, restaurants and hospitality, right through to entertainment and travel.
Although a diverse sector, many businesses have suffered from falling revenues due to pressure on consumers’ discretionary spend. This combined with the ever increasing regulation – including the UK smoking ban through to complex employment law changes and ABTA bonding legislation, are all impacting the revenues within this important sector.
Such is our reputation that both management teams and leisure sector investors frequently seek our involvement in restructuring distressed businesses. Our approach is to work in partnership with businesses to provide practical restructuring solutions to restore confidence and provide a platform for future financial growth.
When advising leisure sector businesses we typically start by examining the working capital arrangements. Given the sector’s notorious difficulty with accurate cash flow forecasting, our team’s priority will be to stabilise the company and ascertain trading levels and to ensure cash flow is managed correctly.
After this initial assessment we typically examine supplier relationships, as we know they can be a major influence on the trading performance of leisure businesses. For example major food or drinks suppliers have substantial power over their distribution networks, frequently imposing terms such as pro-forma invoices or seven day payment; an obvious and substantial drain on cash flow. We work with businesses in this sector and often assist them in negotiations typically acting on their behalf to obtain more favourable terms.
However, our advice is more than just financial analysis. Through our specialist BRITE Panel we can bring in operational directors who have an established track record in areas such as sales and marketing to boost the sales of the business. We realise that making these distressed businesses attractive from both a consumer and a supplier perspective can be difficult; however, such action can drive turnaround faster than many other sectors.
Our track record is such that closing the business is often a route of last resort. With our network of specialist leisure industry agents, we can provide best practice performance management reviews which assist in developing new business plans that are both attractive from a consumer perspective and attractive to lenders. Indeed we have restructured many struggling leisure businesses from administration when those involved have been unsuccessful in turning them around.
Our advice includes:
- Strategic business reviews and performance management
- Specialist leisure market advice
- Rent reviews and lease negotiations
- Organisational restructuring
- Creditor negotiation
- Business development
- Cash and debt management
For further information about our leisure and hospitality expertise please Contact Us.