CAVENDISH MANAGEMENT RESOURCES

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Presentation transcript:

CAVENDISH MANAGEMENT RESOURCES Powerful, innovative resources for businesses

About CMR CMR - established in 1984 CMR - over 3,500 private investors CMR – National Special Associate of NBAN CMR - over 450 senior experienced executives CMR - throughout the UK & Ireland CMR - experts in every industry & market CMR – many innovative resources

CMR’s Resources Equity Funding Self-funding Business Loans International IPR Licensing Corporate Recovery & Restructuring Mergers, Acquisitions & Co. Sales Management Support & Non-exec directors Interim Management & Consultancy

CMR’s operations Ireland Scotland North west North East West Midlands East Midlands Western Chiltern East Anglia Thames Valley London South West Mid-South South East

Self-Funding Business Loans from CAVENDISH MANAGEMENT RESOURCES A unique scheme, providing businesses with loans that make no demands on cashflow, while substantially increasing profits.

Summary of Scheme Loan generated by purchase cost savings Up to 100% of annual savings available as a loan Scheme lasts for 30 months Company receives 50% - 85% of savings Company’s share normally covers both capital repayments and interest charges in full After 30 months, 100% of savings to Company

Eligibility Companies are eligible … Companies may not be eligible … If they are established, viable businesses in UK or Ireland If they have purchase costs of £2 million + (the minimum loan is £200,000) If they have partial security for the loan (the Scheme can create its own collateral) Companies may not be eligible … If they are predominantly a retail business If they spend large amounts on a few specialist commodities If they are fundamentally unsound

Cost Savings Typically, even an efficient company will save 10-15% of purchase costs. How can we do this? High degree of specialist knowledge & buying power Access to a wider range of suppliers Long experience in negotiating purchases Objectivity of outsiders Dedicated single-mindedly to task, with no distractions … and Company retains full control at all times

Cost Savings – case studies Water industry client – saved over £750K on £3 million Advertising client – saved over £1 million on £5 million Utilities client – saved 30% on IT spend of £1.2 million Financial Services – saved 50% on bank spend of £1.1M Government Dept – saved 35% on £6.3M spend Financial Services – saved 18% on stationery spend of £850K Chemical Company – saved £600K on £20M sales turnover Confectionery Company – saved £335K on £15M sales turnover Cost savings always pre-agreed with company before Loan Scheme starts

Stages of Scheme 3 stages. Company signs agreement at outset, but can withdraw at any time prior to Trial Period Stage 1: Purchase audit Free review of purchasing of materials and overheads Recommendations to company Stage 2: Trial period 3 months in which to implement and validate savings Final schedule of savings produced Stage 3: Contract period Loan input – repaid over next 30 months Company pays 1/12th of annual savings each month At end of contract period, Company retains all cost savings in perpetuity

The Loan An ordinary commercial loan, subject to normal conditions and at a normal interest rate If inadequate security, Scheme will pre-start to build collateral reserve from savings Loan capital and interest paid from company’s share of savings over 30 month contract period Company retains legal liability for the loan

Financial Management At outset, a third party is appointed to oversee scheme – usually Company’s accountants Overseers will: Receive and disburse Company’s payment each month After deducting own fee, pay Company’s share and CMR’s share Use Company’s share to repay Lender. Any surplus returned to company CMR receives no up-front fees. Its earnings come only from tangible savings

Safeguards What happens if annual savings fall over course of scheme? Provision for a fresh audit Safety margin of 15% built into Scheme Advisability of a slightly smaller loan In event of a shortfall in a particular month, Company pays balance of capital repayment directly to lender

Legal Agreement Agreement Commits Company to pay 1/12th of annual savings into scheme for 30 consecutive months Defines mechanism for calculating cost savings Defines mechanism for amending annual savings Confirms Company’s control over purchasing decisions Confirms Company’s right to terminate at any time before Trial Period Protects CMR in the event of early termination Principles of scheme are fixed. Details can be negotiated.

Financial example Sales turnover £5,000,000 Purchased cost base £2,500,000 Maximum savings identified (12%) £300,000 Annual savings agreed at month 1 £250,000 Loan advanced £250,000 Monthly repayments (30 months) £8,333 Company’s monthly payment £20,833 Overseer’s fee £521 Company’s share £10,156 (CMR’s share also £10,156) Annual savings revised at month 13 (-15%) £212,500 Company’s monthly payment £17,708 Overseer’s fee £443 Company’s share £8,633 (CMR’s share also £8,633) Net position after 30 months: all loan interest paid; all capital repaid; £1,432 surplus to Company

Summary Loan provided from cost savings, not cashflow No upfront costs; no costs at all except from savings achieved All purchasing decisions remain with Company Any purchasing decisions can be reversed Company can withdraw at any time prior to Trial Period Impartial financial administration Even companies without full security can be eligible Scheme can replace existing borrowing At the end, Company retains full benefit of savings

Summary of client benefits Essentially ‘free’ loan capital Interest paid, loan capital repaid No up-front costs - all costs are paid from savings Scheme also partially creates collateral base Significant, permanent profitability improvement Many companies will see profits double or more Profit improvement already in Company No sales increase required No new markets to be opened No staff redundancies Often a quality improvement All new suppliers are quality vetted

Summary of benefits for Bank Increases existing loan business Allows more ‘marginal’ loan applications to pass criteria because of improvements to collateral & company viability Helps existing ‘problem’ loans Switching part of existing loan into Scheme will allow loan capital and interest to be paid from cost savings Also improves customer’s underlying viability Expands market share Can be used to promote innovative funding solutions Can be integrated with conventional loans & debt financing etc. Can be dual branded between Bank and CMR

Summary of benefits for professional intermediaries Helps clients to obtain funding and increase profitability Scheme itself is a significant revenue generator for the firm introducing clients Can be part of the firm’s service package for new and existing clients Keeps the firm at the forefront of innovation in helping clients

Thank you CAVENDISH MANAGEMENT RESOURCES Powerful, innovative resources for businesses

CAVENDISH MANAGEMENT RESOURCES Powerful, innovative resources for businesses

Summary of benefits for CMR members A great revenue generator – from £50,000 upwards per client introduced and managed A great door-opener to other CMR business with the client A great credibility and awareness tool – will help to open connections with professional firms and other business introducers