AT A GLANCE 

• Long-established waste management specialist J. Dickinson & Sons, invested in a new processing plant to boost output and drive growth
• The plant replaced an existing facility on the same site, causing an interruption to productivity
• Unforeseen cash flow pressures consequently arose
• EFM Associate Neil Outram was brought in as interim Finance Director to put the rest of the business on a firmer footing and help offset the cash flow impacts
• Neil took action to replace the company’s accounting system, move financial reporting to a weekly basis, and increase sales, turnover, and efficiencies, delivering much-strengthened performance and cash position, and supporting the new plant to go live successfully

BACKGROUND 

EFM Associate Neil Outram put his Finance and financial management skills to good use in a demanding interim Finance Director (FD) role with Bolton-based commercial and domestic waste management specialist J. Dickinson & Sons – an assignment that, to date, has lasted two and three-quarters years.

The family-owned company’s rich history, which dates back to 1939, and is built on roots going back further still, has created a brand whose vehicles, skips, and operators are a familiar and instantly recognisable sight in the Bolton area and elsewhere in Lancashire.

And with a turnover of over £22 million at the point Neil was brought on board, following five years of particularly high growth, it was, by any measure, a highly successful business trading strongly off the back of a solid reputation.

Ever keen to move forward and grow, the company had invested in the construction of a new waste processing plant – but there were impacts their business plans hadn’t foreseen, and Neil’s financial expertise proved critical in managing and remediating them.

CHALLENGE 

Whilst J. Dickinson & Sons’ strategy of replacing an existing waste processing plant with a new, more efficient, and more productive facility certainly had the potential to deliver on the company’s growth vision, some challenging operational and financial issues had come to light along the way.

Firstly, with the old plant removed and the new plant on the same site not yet operative, the company found it couldn’t maintain output, and therefore turnover. This, combined with the fact that the new build had run over budget and schedule, caused a ‘cash crunch’ that was placing pressure on the company’s working capital and reserves.

Secondly, the business’s financial reporting – its processes for modelling Finance, identifying coming challenges and opportunities, and communicating them to the decision-makers – had not evolved in line with the company’s growth.

The necessary management information (MI) was typically siloed and often lacking, and the month-end reporting routine was too infrequent to identify issues as they developed and correct them in a timely fashion.

Neil also found that both turnover and efficiencies were not being maximised, and this was contributing negatively to an already difficult cash situation.

SOLUTIONS 

Neil saw that the key to managing and improving the firm’s financial posture was twofold.

Firstly, there was a need to strengthen the performance of the existing business to put it on a firmer footing and help offset the impacts associated with the new plant. Secondly, he needed to put in place better MI, reporting, and analysis, to anticipate and minimise further pressures on cash flow.

To achieve this, Neil focused the company’s management on taking practical steps to measurably increase sales, turnover, and efficiencies, each tied to defined KPIs.

He steered the business to promote more of the activities and services with the best ‘tipping percentage’, and reduce the drag of less profitable offerings, like shredding, by optimising associated costs such as shipping.

He also delved into the technicalities of the production process itself, to identify opportunities to make machine use more effective and efficient, and reduce running costs and processing times.

On the reporting front, too, Neil rang the changes, replacing the firms’ accounting system with a more analytical solution, and moving from the previous chief financial controller’s monthly reporting regime to a weekly process.

This enabled the business to understand what it was doing right, wrong more rapidly, and well – and make improvements where required.

BENEFITS 

Neil’s work at J. Dickinson & Sons delivered marked financial benefits that enabled the business to weather the temporary effects of its new plant build and sustain the performance of its brand.

The company has recently had its most positive year since Neil’s arrival and is now very close to setting the new plant live. Neil’s work on improving shift patterns and increasing the new plant’s productivity means it’s on track to return the business to a stronger cash position and full recovery, equipping it for the next stage of business growth.

But the benefits Neil has delivered have been cultural and organisational, too. Through his use of selectively layered reporting to bring out the most pertinent issues in any particular time period, and his use of Microsoft Teams to share information, he has helped break down silos, energise team dynamics, and generally enable employees to become more engaged.

Throughout, as an outsourced Finance Director, he has worked closely with the company’s Management Accountant and manufacturing consultant to build strong internal relationships that drive a shared investment in success.

For more information on how EFM’s experienced Finance professionals can take the pain and cost out of managing your business’s finances, and smooth its passage to growth, get in touch today.