Business turnaround (racing club)

What is Business Turnaround?

When a qualified professional is called in to assess an underperforming business and develop a strategy to improve business and avoid insolvency. There are many tactics that are used to develop a business turnaround plan.

“The team at Rapsey Griffiths were always professional, courteous and diligent in their approach to people and were a pleasure to deal with.

The service provided by the Rapsey Griffiths team was always well considered and timely with an effective communication strategy as part of the ongoing operations of the complex. Regular reports were provided in a timely manner for ongoing consideration.

I would have no hesitation in recommending Rapsey Griffiths services to prospective clients.”  

Deputy Chief Executive Officer of the Regulator.

Industry 

Hospitality and Racing

Background

During the external audit, several matters of concern (operational, financial and corporate governance) were raised with management.

Existing management had not adequately attended to these issues. As a result, Rapsey Griffiths was appointed Administrator under the relevant Racing Act to conduct the affairs of a racing club.

Core problem

The Club had serious operational, financial management and governance-related concerns. There had been a systemic breakdown of and failure in the Club’s internal controls. This had the potential to give rise to major financial issues.

The solution

Acting swiftly, Rapsey Griffiths implemented a crises stabilisation and turnaround plan.

The initial stages of our appointment involved focusing on understanding the Club’s affairs and stabilising its operations. This involved implementing a management and reporting structure and the re-establishment of critical internal controls.

As part of our engagement, we:

• Rebuilt stakeholder confidence by demonstrating that senior management had taken control of the situation.
• Clarified job responsibilities and reporting lines for staff.
• Developed a HR / workforce management plan and commenced implementing same.
• Identified and engaged with stakeholders through implementation of a communication plan with stakeholders in an open & honest manner, acknowledging concerns and providing a clear plan moving forward.
• Established a robust financial function and drafted profit cashflow forecast, budgets and manager trading performances.
• Established new operational processes, systems and controls.
• Facilitated the appointment of a new board of directors.
• Arranged new management leadership and training.
• Reviewed the Club’s WHS practices and rectified high priority deficiencies and implemented ongoing WHS practices.
• Renegotiated and documented expired contracts and informal agreements.
• Rectified outstanding audit issues, worked with auditor to complete the outstanding audit and facilitated the AGM.
• Completed outstanding compliance reporting requirements and established an appropriate compliance framework moving forward.
• Worked collaboratively with the Regulator with all aspects of the Club’s operational and racing obligations.
• Transitioned the Club’s operation back to a medium-term management structure.

The outcome

The entire process took approximately five months from start to finish. As a result of engaging Rapsey Griffiths, the Club was able to stabilise and provided with a platform to move forward with its next phase and new approach to Club’s business.

The benefits of this successful turnaround were felt by the Club as well as the local community.