Birch Advisory is a business consultancy firm focused on bringing calm clarity to challenging business situations.

Located in Perth, Western Australia, Birch Advisory helps owners, directors, boards and CEO's solve critical and unusual problems.

We provide impartial and objective advice on the options available during times of financial crisis, and can assist the borrower to implement agreed strategies, or monitor compliance on behalf of the bank.

We are trusted and respected business consultants with an exceptional track record in delivering workouts that avoid the need for a formal insolvency appointment, and improve the outcome for all parties.

We work directly with boards, executive management teams and business owners facing strategic issues that need careful management. Drawing on broad industry experience and refined technical skills, we deliver critical insights and clear recommendations for:

• Turnarounds, restructuring and work-outs
• Bank intermediary services
• Board advisory
• Financial crisis management
• Strategy and planning
• Solvency and working capital improvement
• Acquisitions and divestments
• Corporate governance
• Risk management

• Commercial expertise and clear business direction in times of crisis.
• Independence, objectivity, specialist skills and a fresh perspective.
• Additional resources to drive critical projects while the incumbent team focuses on day-to-day operations.
• Considerable expertise and knowledge to forge innovative strategies tailored to the client's needs to get them back on track for sustained growth.
• A long-term interest and commitment to achieving the best outcomes for our clients.

Financiers

• We assist financiers with impaired loans gain an independent objective assessment of the borrower’s situation, develop realistic achievable turnaround and work-out plans, and monitor those plans to reduce credit risk.
• Our investigative accountant reports provide a detailed analysis of the current position, including borrower background, business performance, financial performance and position and a review of the current business plan.
• Our reports are objective, well written and realistic.
• As we do not take informal insolvency appointment you can be assured that our advice is genuine and independent.

Business owners, executive management teams, boards and their directors

• We help solve critical problems. Critical because an unsuccessful resolution is likely to have a profound impact on the business's viability.
• We help solve unusual problems. Unusual because the problem or its root cause might be outside of the executive team's experience or sphere of influence.

Andrew Birch

Andrew Birch is a business consultant with 20 years' experience in successfully managing troubled businesses.

He has spearheaded change initiatives, led full-scale restructuring plans and turnaround efforts, overseen sale negotiations, and delivered best-practice corporate governance and risk management solutions to listed and unlisted companies.

Now based in Perth, Western Australia, Andrew specialises in helping businesses facing critical, challenging and unusual situations. He applies deep financial skills, risk analysis and commercial common sense to design creative strategies and implement practical solutions to help clients achieve their goals.

Andrew enjoys helping clients develop their strategy and business plans, believing that clear strategies and organisational alignment are fundamental for longer-term viability. He has experience in commercial and not-for-profit sectors, focusing on strategy, governance and operational performance.

Andrew is the Chairman of St. Bartholomew's House

Qualifications and memberships

• Bachelor of Commerce (Honours), Birmingham University, England
• Chartered Accountant and member of the Institute of Chartered Accountants
• Advanced Strategy at INSEAD, Fontainebleau, France
• Official Liquidator
• Graduate, Company Directors' Course, Australian Institute of Company Directors
• Member Turnaround Management Association of Australia (and past WA Chairman)
• Member Insolvency Practitioners' Association of Australia

Contact

Contact Andrew on

0422 220 122 (M) or andrewbirch@birchadvisory.com

Simon Read

Simon Read is a highly sought after business consultant who can quickly identify and react to the key issues that affect troubled businesses. He has a hands on skill set honed over 25 years of working with Australia's leading corporate recovery specialists. He has personally handled hundreds of assignments involving both large publicly listed groups and smaller family operated businesses. Simon's business experience and clear thinking mean he can efficiently and effectively make a big difference to troubled businesses.

Having worked closely with financial institutions Simon understands their issues in times of financial stress and how they are likely to react. He has assisted national, international and local clients in their negotiations with Australia's major banks involving re-negotiating terms, debt levels, re-payment and in some cases assisting with the re-finance of existing facilities.

He has worked across many industries with significant experience in forestry, mining, engineering, finance and property development and construction. Over the last decade he has specialised in the operators of Managed Investment Schemes.

Simon has a passion for helping businesses in unusual situations, whether they are financial, performance or management related situations and derives great personal satisfaction from achieving successful outcomes for business owners, directors and shareholders.

Simon is a Director at Landcorp and chairs the Audit and Risk Management Committee.

Simon sits on the Council at Prestbyterian Ladies College and chairs the Strategy Committee.

Qualifications and memberships

• Chartered Accountant and Member Institute of Chartered Accountants
• Graduate Member Australian Institute of Company Directors
• Member Turnaround Management Association
• Member Agribusiness Association of Australia
• Registered Liquidator
• Registered Official (Court) Liquidator
• Member Insolvency Practitioners Association of Australia
• Bachelor of Financial Administration University of New England
• Diploma of Financial Management University of New England

Contact

Contact Simon on

0408 542 100 (M) or simonread@birchadvisory.com

Project Phoenix:

With over 200 employees and contracting work underway of more than $100m this specialist engineering and construction Group faced immediate problems when cash flow difficulties arose on one contract. The impact was crippling and we were asked to assist. A number of "white knights" emerged but with cash flow down to a trickle a managed Voluntary Administration was the only means to avert collapse.

Working with the Board we were successful in negotiating and concluding a proposal for the restructure and rebirth of the business. This saw the introduction of a large national engineering Group to partner our client and after further successful negotiations with the administrators and creditors the new entity was born. The business is set for a very bright future with new contracts underway and the support of a national partner.

Project William:

Our client was referred to us from his business banker when his file was moved into the credit risk area. Working closely with our client and the bank we implemented a turnaround, restructure and work out of this diversified group with bank facilities totalling $41.1M at an LVR of 86%. Improved focus on key business metrics led to all businesses operating at above breakeven point within 12 months and repayment of $32.5M of bank debt through sale of non-core assets. Once the loan to value and interest cover ratios were within normal bank requirements the client refinanced. Businesses continue to trade profitably, and Birch Advisory has been engaged to assist with ongoing performance and corporate governance improvement initiatives.

Project Rebus:

A work–out and bank intermediary role for a significant property developer with exposure to multiple financiers totaling $51.9M at an LVR of 98%. Identified and confirmed the financiers' competing objectives, and developed a work-out strategy involving debt reduction through property sale and restructuring of the remaining facilities at lower interest rates, for extended terms. The breathing space provided will enable to the group to achieve significant further increases in the net asset value through a longer-term property development focus.

Project Xena:

When faced with the possible loss of a multi million dollar loan to a small public company this client sought our advice. As an unsecured low priority convertible note holder our client faced a difficult task in recouping its investment. After deliberation we agreed a robust strategy to recover the loan. Following numerous negotiations with the public company's Board and senior management our client was repaid in full, including the full recovery of costs and interest. In the circumstances a sensational outcome.

Project Gutenberg:

The Worldwide Online Printing Group was one of Australia's largest and most geographically diversified print organisations. Its’ collapse in 2010 drew a lot of interest from prospective purchasers. One of those parties was a large European printer who sought our advice on acquisition strategy. While ultimately withdrawing from the sale process we were actively involved in discussions and preliminary due diligence with the vendor and setting an acquisition strategy with the European printer.

Project Dance:

With secured debt of circa $15 million and property assets valued at circa $30 million this small property developer was reasonably well positioned before the GFC. That position soon changed. The outcome of the GFC saw the market impact of sharply declining values and the tightening of credit. Our client's bankers faced a difficult position and were very close to taking possession of the assets. We were asked to assist.

We negotiated a stand still agreement with the Bank and an asset realisation and refinance schedule with the client. Putting in place a regular communications process was integral to a successful outcome and ensured that all stakeholders were aware of progress and issues arising. The strategy was successful with our client realising surplus properties and refinancing the balance.

Project Texas:

An independent review of a company for two of its key stakeholders confirmed serious financial irregularities and mismanagement, and led to improved fact-based communication focused on common objectives.

Project Zeus:

Our client came to us with critical issues: profitability had been hit by an industry down turn, gearing had increased and its ability to service bank loans had been affected by the decline in its profitability.

We quickly established that the business was bordering on insolvent. The industry outlook was uncertain, and, without an immediate increase in turnover, the business would suffer large losses. The Bank and major financiers were looking for payments to be brought in line and sensible answers to their fears about the future of the company.

We worked with the owner and other directors to develop and implement a sale program around a party that had previously expressed interest, whilst keeping all major banks, financiers and creditors on side.

The business was sold to a major international competitor with goodwill approaching 10% of the asset value, preserving the business and all employment, paying creditors in full, and giving the owner a managing director role in the acquiring company.

Turnaround, restructuring and work-out:

• We identify the critical issues, assess viability, develop solutions and manage the turnaround. Successful turnarounds are characterised by realistic assessment of the symptoms and causes, adequate and early stabilisation, clear and effective strategy, decisive action, and stakeholder support.
• We bring a fresh perspective and a wealth of experience managing troubled and distressed businesses.
• We identify symptoms and underlying causes that may not be visible to the incumbent executive team.
• We are objective and independent. We are not biased in favour of or prejudiced against any products, services, processes, situations or personnel. We objectively assess each situation on its merits, and provide clear decisive advice.
• We advise boards and senior management teams on how to design and implement effective plans to restore value to troubled businesses and help them to avoid insolvency.
• We have many years of insolvency experience and have a detailed knowledge of effective rescue plans using the voluntary administration legislation to maximise the chance of the business continuing in existence.
• We have provided advice to all of the major Australian financial institutions and to many of their customers on workout programs including formal and informal agreements.

Bank intermediary services:

• With many years of experience in formal insolvency and informal advisory roles, we offer the leading practical alternative to insolvency.
• We assist the bank and/or the borrower to develop a plan that will achieve the bank's objectives and ensure that the borrower's executive management team and board buy-in to the plan.
• We focus on developing constructive relationships between financiers and borrowers to achieve mutually beneficial outcomes.
• Often there is some tension between the client and counter-party. We develop practical solutions to resolve these tensions and build trust leading to better outcomes, more quickly and with less risk.
• We have an impressive track record of aligning action plans with the Bank's objectives to successfully work out a large volume of impaired debt.
• When appointed by the borrower we act as an advocate for the borrower. In cases where the Bank is concerned about the borrower’s facilities, the Bank may insist on a detailed investigative accountant report and ongoing monitoring as a condition of its ongoing support.

Financial crisis management:

• We are trusted financial crisis managers sought out to assist businesses when they are most vulnerable; surprised by a sudden adverse change that threatens the business's viability and requires a rapid response.
• We have hands on experience managing financial crises expertly and proficiently.
• We quickly identify the most urgent issues and develop dynamic action plans to immediately begin managing the crisis.
• Less urgent but still critical issues are built into short-term management plans.
• Stakeholder communication is critical to a successful outcome. We are skilled at recognising the explicit and implicit needs of stakeholders to quickly bring the situation under control.
• We have a range of skills and techniques at our disposal to identify, assess, understand and cope with critical situations.
• Handled properly, crises provide an opportunity for executive management teams to impress stakeholder groups.

Strategy and planning:

• Simply put, strategic planning is a process to establish where your business is now, where you want to get to, and how you are going to get there.
• We find that many people over-complicate strategy, and in the process decrease their ability to achieve the most fundamental and important objectives.
• We believe that clear strategies are easier to understand, easier to communicate and therefore easier to implement.
• We listen to you to understand your objectives and any pertinent constraints, and help you develop a strategy that will achieve your objectives.
• We consider the financial consequences of strategic decisions on future viability.
• We assist you to develop detailed action plans, and provide ongoing monitoring, mentoring or advice to keep you on track.

Corporate financial advice:

We find that borrowers and bankers often seem to speak a different language. Bankers may be concerned about the company's performance, its credit risk rating, the effect on its cost of funds and whether the loan is impaired, or on accrual or non-accrual. Directors are concerned about growth, profits and cash flow. When the business has a run of bad luck, revenue targets are not met, and working capital can become tight. In some cases, this leads to the bank moving the file to another area of the bank that specialises in managing riskier loans.

We recommend that Directors seek urgent, independent, objective specialist advice in these circumstances.

We can help you understand what the Banker is saying, what it means for your business, and what you need to do to get back to a normal banking relationship as soon as possible. When that is impossible, we can help you to refinance your facilities to another bank.

Performance improvement:

There is no shortage of businesses that want to improve or people offering advice. Performance improvement at Birch Advisory is a combination of strategic planning, financial analysis, working capital management, asset utilisation, corporate governance and risk management based on detailed action plans to consistently encourage accountability, drive performance, and build momentum.

Our clients show a sustained improvement in performance, as measured by free cash flow (after-tax) and the Z-score.