I run KPMG’s UK and global restructuring practice. Our role involves advising and assisting underperforming or distressed corporates and their stakeholders. I have specialised in restructuring work now for well over 30 years, but I have to admit that whilst I love what I do, this was never my plan as a youngster, but rather I fell into it when the company I worked for after university went bust.
Over this period I have experienced many busy times through the economic cycles, but perhaps never quite as challenging as the one we are currently in/facing. It’s boring to use the word “unprecedented” but it is and has introduced a level of uncertainty into the corporate world way beyond anything experienced – Brexit was only a light-touch, pre-season training session compared to this!
It is extremely difficult for virtually any business in any sector to prepare robust forecasts in this environment, but it is in fact more important than ever – assumptions and sensitivities need to be carefully thought through and challenged, leading to well-developed contingency plans to cater for (hopefully) every eventuality. Cash remains king and will do for some time.
So far since lockdown, we have seen relatively few insolvencies across both Scotland the wider UK, and I suspect we will see something similar for May. I think this is entirely down to the various support measures brought in by the government, principally the Job Retention Scheme (JRS), but also the various bank-related support mechanisms including the Coronavirus Business Interruption Loan Scheme.
There is no doubt that JRS in particular has so far prevented significant levels of redundancies and has facilitated the mothballing or hibernation of businesses during the lockdown. After a slow start, the feedback on the bank-related support schemes has also been for the most part positive. The key question is, have these measures prevented closure/insolvencies/redundancies or just delayed them?
There is no easy answer to this and the final outcome will vary from sector to sector and business to business. Key questions include, can my business operate viably when lockdown measures are relaxed (for example allowing for social distancing); what will the customer reaction be; will there be problems in the supply chain and have I sufficient finance to cover most, if not all, eventualities?
As far as sectors are concerned, it is clear that areas such as retail, casual dining, hospitality and leisure and travel are amongst those most badly affected. The first two were already suffering pre-Covid-19 and it is difficult to see anything other than more store and restaurant closures or insolvencies and consequent redundancies. Leisure and hospitality and travel and tourism are probably the next most affected – but, let’s be honest, virtually no business in any sector will escape pain.
That being said, I do not subscribe to the view that we are heading towards Armageddon and business failure on a scale never previously seen. I do think that most businesses that were viable pre-Covid-19 will survive through a mix of good business-management, supportive stakeholders and time.
There will also be many opportunities for businesses not only to survive but to prosper, for example as a result of the change in working practices brought about by the lockdown (like home working) and through opportunistic acquisition through a strong balance sheet or access to funding.
I have been very fortunate to have been involved in many high-profile insolvencies over the last few years including Thomas Cook, Monarch Airlines and MF Global and more locally Dunfermline Building Society, Scottish Coal and Tullis Russell, but it’s ironic that the only one I am well remembered for is Airdrie Football Club.
That was actually an incredibly interesting and challenging case, especially in the context of what is a very small Scottish company – it did, however, rather turn me off getting involved in any further football insolvencies, including Hearts and Dundee to name a few.
Another small frustration is that people assume insolvency is all that myself and my colleagues do, whilst in actual fact the vast majority of our time is spent advising companies on how best to avoid that. This is perhaps understandable in that it’s only when a company goes bust that there is a public acknowledgement of us being involved.
In terms of who I admire, one management team that always springs to mind is that of Wiseman Dairies when I sold them part of the Scottish Pride business many years ago. They knew their business top to bottom, had great complementary skills and were hard but fair.
I have of course been lucky to work with some fantastic people over the years and if I was asked to identify common features it would be common sense, energy and enthusiasm and excellent interpersonal skills.
Born: Falkirk, 1959
Education: Linlithgow Academy followed by University of Edinburgh
First Job: Trained as a chartered accountant at Coopers & Lybrand (PwC)
Ambition while at school: To be a professional footballer like every other boy of that age, but didn’t even come close!
What car do you drive: Range Rover and have an interest in cars old and new
Favourite mode of transport: See above – definitely a car
Music: Not a huge music fan – last concert was Cher and prior to that Rolling Stones and Rod Stewart
Kindle or book: Neither!
Reading material: Mostly-job related as have little time for anything else
Can’t live without: Mobile phone
What makes you angry: Internal politics
What inspires you: I like to win, as part of a team and have fun doing it
Favourite place: That’s an interesting one – I have many favourite places, but the one that constantly gives me a buzz is when I drive into St Andrews
Best business advice I have been given and now give: Stick to your knitting, i.e. for those people who have been successful in one field don’t get carried away into thinking that they can replicate that everywhere else
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