One-Off Triple Win Growth Opportunity for Private Equity According to Newton Europe
OXFORD, England, July 14, 2010 /PRNewswire/ -- When a recession actually occurs, everyone knows where they are and, difficult as things may be, there's a "we're all in this together" sense to it. The early-stage priorities are clear: reduce costs, reduce inventory, and reduce anything and everything that can lighten the load.
However, later, when the recession ends, there is not the same commonality of experience ... except, maybe, confusion. Early-stage recoveries can be unpredictable, messy and, frequently, unreliable. The reason why these treacherous conditions arise is, of course, because recoveries possess no homogeneity or symmetry.
During the depths of a recession, try as they might to stave off disaster, some companies do go under. This sets up a new marketplace dynamic that only really reveals itself when things start to improve. At this point, fewer companies find themselves trying to respond to unplanned order levels.
The result is the worst of all possible worlds: companies that, after a long period of dismal trading, need desperately to be able to exploit growth opportunities, find themselves unable to do so.
Newton, Europe's leading operational and financial improvement specialist, believe we are at this point in time right now. "Partly driven by customers replenishing depleted inventory levels and partly competitors going under, we are now seeing businesses with order books exceeding demand. This is causing serious strain on supply chains that have been weaned for leaner times. The result is that companies are seeing lead times extending, delivery performance deteriorating, customer satisfaction dropping, marginal costs accelerating and opportunities being missed," said Tom Wedgwood, Director at Newton
The situation is particularly poignant for private equity because liquidity remains so restricted. The opportunity for portfolio companies to exploit these market opportunities and deliver value through internal processes and efficiencies is surely not to be missed.
In fact, Tom Wedgwood makes the point that this activity can deliver a triple win: "Win 1, because operating performance improvements directly enhance portfolio value. Win 2, because the improvements afford positive PR opportunities by demonstrating to a sceptical world that private equity can play a key role in a more prosperous future by growing businesses and protecting jobs. And Win 3 because, in a world where up to 50% of mid cap firms may disappear and are ultimately competing for survival, demonstrating an ability to grow a portfolio's turnover and profit is an important element in ensuring success in raising future funds."
Email [email protected] to request Tom's whitepaper 'Private Equity: How to exploit an extraordinary opportunity in a world turned upside down'.
About Newton
Newton is the leading operational and financial improvement specialist in Europe. Founded in 2001 by a group of highly qualified and experienced engineers, the company's objective is straightforward: to deliver performance improvement of 10% - 50% in any client's operations and supply chain without incurring capital expenditure.
From its roots in manufacturing, Newton applies its unique engineering based approach across a wide range of industry sectors, working in areas as diverse as aerospace, automotive, defence, food & drink and healthcare, from the factory floor to design offices and throughout the supply chain.
Newton are not management consultants, they do not focus on strategy, re-structuring or re-organisation - their focus is on identifying and resolving the issues that limit performance, to deliver a tangible and measurable improvement, backed by Newton's guarantee "no results, no fee".
Newton has a substantial proven track record and has worked with many forward thinking organisations including Rolls-Royce, BAE Systems, VT Group, Nissan, Kerry Foods, British Airways and the NHS.
SOURCE Newton Europe
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