The bigger they are the harder they fall
Interserve is – or should we say ‘was’ – one of Britain’s biggest contractors. Over the last 135 years, they have operated worldwide, working with public and private sector clients. They have built an impressive workforce of over 68,000 individuals – 45,000 of which are in the UK. They have been in business since 1884, but earlier this month they risked a corporate disaster almost on the same scale of Carillion, which collapsed in January of this year.
It’s argued that Carillion ran into trouble after losing money on several big contracts, racking up an impressive amount of debt in the process. The contracts were clearly extremely risky, proving unprofitable and ultimately leading to Carillion’s failure. But what has happened to Interserve, and are they facing a similar fate?
Earlier this month, Interserve faced administration as a result of hundreds of million pounds worth of debt. They have now signed a deal that means they will avoid a Carillion style collapse (for now), something the government is extremely keen to support. It has however resulted in investors seeing the value of their shares wiped out by an impressive 75% as a result of the financial restructuring. Although Interserve now does have a plan, it demonstrates what can really go wrong for companies when they are victims of poor management behaviour.
Over the next few months, Interserve will begin quietly rebuilding itself. Its fate now rests in the hands of a group of lenders who will be making tough decisions that will no doubt include selling parts of the company, or indeed closing parts all together so these lenders can attempt to make their money back.
The tool you need to keep you up-and-running
It’s clear this has been a complete disaster for the company. If only they’d had a business risk management tool in place to foresee any potential problems, advise on important financial decisions, and to give a clearly structured and well thought-out business continuity plan.
The Risk Dashboard is designed the completely avoid disasters like this to your company. We work closely with start-ups, SME’s, micros and large corporate enterprises to create a bespoke risk management tool that can easily integrate into your existing structures.
“Information is power” is an age-old saying that we tend to live by here at the Risk Dashboard. Only when armed the right information are you able to make sound financial decisions and create a solid business plan. Part of the skill is having a back-up plan, and that might mean several. This is something that you can implement and know will still support the growth of your company, even if it’s a slightly different direction to your original vision. It’s something to get you back on track should disaster strike.
For more information on how the Risk Dashboard can assist your business and help in avoiding a Carillion style collapse, please don’t hesitate to get in touch. You can visit our website, or contact Neil Campbell, Commercial Director on neil.campbell@riskdashboard.co.uk or info@riskdashboard.co.uk. We look forward to hearing from you.
Follow us on LinkedIn
Follow us on Twitter
Follow us on Facebook
Follow us on Google+
Subscribe to our YouTube channel