Leading a construction company from breakeven to sale
Malcolm starts a long-term involvement
On retirement of the managing director, Malcolm Durham increased his involvement with his family company, Gordon Durham & Co. He played an active part in strategy and financial control on a three-day-per-month basis.
He cuts costs
Malcolm appointed a new MD and together they undertook a detailed review of overheads, resulting in an immediate reduction of 11% of the company’s total cost base.
In tandem with this, a review of outstanding claims resulted in an inflow of cash.
Malcolm reduces overheads
By the second year of the reduced overhead regime, costs were 27% lower than previously.
In the same year, Gordon Durham signed its first Partnership Charter, the new basis on which local authorities partner with private companies to provide public services – in this case, schools in the north east.
Looking to the future
Malcolm led the management team to create a three-year strategic plan – all on just four pages! This was constantly referred to, enabling the directors to take effective decisions.
The company generates cash
With rigorous budget processes and cost controls continuing, overheads were contained at levels below prior years, and the company was able to tell its bankers that renewal of the overdraft facilities wasn’t required.
The typical in-hand cash balances had increased over a three-year period by £1 million.
Partnership charters get signed
The company signed three more Partnership Charters as it really started to make its mark, culminating in recognition as one of the most innovative companies in the country, as judged by Cranfield School of Management.
Malcolm keeps an eye on costs
Several years later, the company’s overheads were still below the levels from five years previously. And profits were marginally higher than had been forecast at the strategy meeting three years previously.
Renewal of Charters
With Partnership Charters recognised as key to long-term growth, Malcolm was delighted to see the company’s Charters successfully renewed.
The success continues
During a busy ten years at the helm, Malcolm had seen bottom-line results move from an annual loss of £200,000 to profitability above £0.5 million per year, with a corresponding increase in the value of the company.
Malcolm hands over the reins
Malcolm’s family had a long involvement with the eponymous Gordon Durham, but the shareholders recognised the merit of sale to a larger construction company. Malcolm led negotiations including appointment of a preferred bidder, to whom the business was eventually sold.