Company Project A

Background

• Established in 2001.
• Deboning factory.
• Operates in Limpopo, Gauteng and Mpumalanga.
• 2012 financial year company was insolvent.
• Loss of R3,5 million (2012 financial year).
• Loss of market share.
• Decrease in sales (R42 million (2012) – R27 million (2013).
• Gross profit of 15%.

Analysis Findings

• Lack of systems and processes.
• Lack of working capital.
• Weak financial management (lack of financial control).
• Management Capacity.
• Threat from creditors.
• One client.
• No marketing.
• Low gross profit.
• No stock management.

Interventions

• Financial
• Development and implementation of debtors system.
• Implementation of fiscal control (management and reduction of cost).
• Cash flow management.
• Information Management
• Re-alignment of and clean up of financial system.
• Development of stock management control system.
• Production / Service delivery
• Development and implementation of production scheduling.
• Marketing Sales
• Development and implemented a marketing plan/ strategy.

Outcomes

• Financial
• 18% improvement in debt collecting.
• Reduction in overhead costs.
• Overdraft dependency reduced by 44%.
• Improvement in gross profit
• Production / Service delivery
• Reduction in stock outs.
• Reduction in stock losses.
• Marketing Sales
• Sales improvement of 18%.

Impact

• Financial
• 18% improvement in debt collecting.
• Turnover improvement of 18%.
• Company turnaround from a R3,5m loss (2012) to a R1,7m profit (2013), R3,7m profit (2014) and profit forecast 2015 is R5,3m.
• Company is solvent
• vImprovement in gross profit from 15% - 36%, a gross profit improvement of 140%. This equates to a R6,9m in additional gross profit.
• Marketing Sales
• Sales improvement of 18%
• General
• The client received the Productivity SA award for performance improvement 2014.