Out we go then...
Insolvency now guaranteed with new set up. Easy-peasy.
606 publicly visible posts • joined 7 Oct 2011
In effect, the problem has been around for a number of years and is getting no better. It has extended into other product areas. Brexit happening or not is not relevant.
HMRC have for years fallen back on multiple visits and handing out the same forms expecting this to work. It doesn't. Quite simply, business owners and senior managers have far too much to concentrate on and the way shipments are dealt with today means greater opportunity for fraudsters.
The common identifiers I'm sure are known to HMRC but they fail to educate or correctly advise businesses on how to first identify suspect deals and then do not react quickly enough in shutting down buffer and broker companies in the chain. A simple help desk line where a client can tap in, provide details of suspect deals and get sound advice is what is needed. HMRC would save a fortune in the public purse.
When you’re saddled with a shit balance sheet and any profit you generate is swallowed up by debt and loan note interest, no amount of bright spark ideas can get you out of a hole when your business needs to change direction. Those very ideas are limited as a consequence of a lack of financial clout and often lead to the cheapest option that rarely delivers.
This is a business with gross margins of around 50% but saddled with a woeful balance sheet, the result of repeated Private Equity investment and lack of real direction.
I once sat in a meeting with non-exec Director representing PE Investors in the funding of an MBO involving a midlands based OEM. He was totally clueless of the business and had no inkling of how important the previous owners had been to it’s success. The result? a second PE investment that subsequently added to the debt and further weakened the balance sheet. When sales stutter in such instances, the writing is on the wall.
Online sales in 2016 were only around13% of total sales. It’s footfall in the high street and management of costs that are the problem. There was a hefty increase in both people and premises costs in 2016 that needs to result in higher sales otherwise the debt becomes more difficult to service.
Insurers react to events, one of which is deteriorating performance and financial instability. Not paying HMRC or suppliers is one aspect of this.
No good blaming credit insurers or HMRC demanding its money. The fault lies in the business itself, the model, its historical trajectory and path and the very nature of what it does.
My experience has always been that businesses bought for just £1 offer just one thing- an opportunity to make some fast money, strip out certain assets and distance parts of the business that may have greater shelf life. Misco, as a brand and a business model is a throw back and cannot change sufficiently to move into new areas and activity.
Martin took the reins of a very successful but almost 'shy' reselling business and helped it break into the limelight. Proud of its roots however, he kept the very same work ethos and this accelerated growth. The tricky bit with any Reselling business is how one takes it beyond 1bn.
Great to see Softcat performing well but keeping feet on the ground is a pre-requisite of future sustained growth. Post IPO, certainly in the technology sector, the first two years are more likely to be easier in showing delivery. It gets a lot tougher after that to maintain the same levels of top and bottom line growth, more so consistently.
One thing to learn, when you're taken over by someone else that someone else gives not a jot what value you offered or the service level you delivered.
That someone else's priority is to retain as much of the actual business as it can and shed the excess cost of people in the acquisition; it's really as simple as that in 8/10 cases. Issue is in doing so, they actually retain less than 40% of the business volumes they acquired. Within 3 years of any acquisition, the acquirer will have retained less than 5% of staff acquired.
Best option is to sit and wait for the offer of make the demand to shift early, they always like that.
Had an HP printer once and never again.... Had a Lexmark printer once and never again. In the case of the latter, had a conforming substitute Tesco ink cartridge that worked but only until a Lexmark update stopped it functioning.
I consider another rip-off to be the assured number of either colour or black and white prints with each cartridge. It's well below the number assured.
Compiled a list of UK distributors back in 2010 and I had around 68 names. This has now shrunk by 55%. This mean less choice and further downward pressure on gross margins. Expect more because they simply cannot survive without acquiring currently. Seems that as manufacturers consolidate, so do Distributors.
Marked difference between a car manufacturer and Supermarkets that sell product other manufacturers produce to the likes of you and me and two ingrained and competing technology companies merging into one. Expect to see a thorough review of product and lines covered and even a new direction with the usual chopping of overheads.