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Background
Cedar Plc is an enterprise software, consulting
and services organisation. Employing over 800 people
in offices throughout North America, Europe and Asia
Pacific and headquartered in the UK, Cedar provides
solutions for the management of customers, knowledge
and resources.
As a provider of software solutions Cedar grew rapidly
and became internationally respected. However the
down turn in demand for IT services which has blighted
the sector, created a range of fundamental cash flow
implications and the company was eventually forced
in to venture capital ownership in order to survive
and recapitalise.
New management were called in by Venture Capitalists
Alchemy Partners including a new Managing and Finance
Directors. The clear mandate of the management team
was to cut costs, rationalise and reorganise the business,
cut product lines and grow sales. These objectives
forced change throughout the business, in turn creating
major property implications for Cedar.
Enable
were asked to provide an outsourced property solution
to manage the rationalisation of their portfolio whilst
improving efficiency in use and cutting costs.
What we did
We immediately focused on the complete portfolio of
buildings and services with a primary objective to
cut costs, stem cash out-flow and eliminate balance
sheet liabilities. Having agreed strategy with senior
management we developed a tactical plan of activities
to meet business objectives which included:
• Letting surplus space
• Moth balling difficult to let space
• Out sourcing facilities services where possible
• Planning relocation of liabilities
• Dealing with dilapidations claims
• Cutting property taxation
• Scheduling action plan of all liabilities
over 12 months and beyond
These objectives required creative as well as critical
professional appraisal driven by extreme circumstances.
Our range of solutions has led us to review the possibility
of flip deals where we exchange leases on large highly
specified buildings in exchange for smaller and more
humble accommodation, cutting space, liabilities and
cash flow in one hit.
We also used the difficult market conditions faced
by Cedar as a negotiation tactic against the landlord
in negotiating more beneficial lease terms on their
head office. Again this helped to meet the overall
cost efficiency drive of the business.
As with many UK businesses, the Cedar staff were considered
the key asset to the future success of the business.
It was therefore important to achieve the overall
rationalisation plan consistent with communicating
a recovery position to staff. Maintaining staff morale
and promoting the benefits of cost cutting and efficiency
was a key component of the overall property strategy.
Results
We are still engaged with Cedar in completion of the
property strategy and will report on a schedule of
results very soon. |
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