Boosting profit margins from Zero to 20%

Transforming profit margins while ensuring smooth financial integration and supporting a successful exit

Howard was a senior member of the finance team in the Instinctif Partners group from 2009 to 2019. He had many achievements, we highlight five here.

1/ Integration of acquired company

In 2009 Howard was running the finance team for a small PR consultancy when it was acquired by an international business, Instinctif Partners. Howard took charge of the financial integration of the business into the larger group, which meant migrating to a different financial system and project managing an office move from start to finish in just 3 months.

After the integration, he became the divisional FD for two of the group’s five divisions, focused on providing commercial and strategic financial support to the operational management of those divisions. This covered a combined £8.5m turnover with 65 staff across three offices in three countries.

His time with the Instinctif Partners group spanned many experiences and projects, some examples of which are below.

2/ Drive profit margins from zero to 20%

As with all businesses, understanding profitability by project (or by client) was critical to being able to manage business performance.

Howard led a project to introduce and improve the collection of timesheet data in one division, to allow account managers to properly understand the work that had been carried out against the contracted scope.

As a result, account managers could better control the work being carried out and could more easily identify and charge for “scope creep”.

The impact was increased income as clients were charged for the extra work done, and all that income fell through to the bottom line. The division improved its profit margins from break-even to 20% margin over just two years.

3/ Negotiation and pricing

Financial input at the quote and negotiation stage of contracts can be absolutely vital to ensuring that the contracts are likely to be profitable, that invoicing and credit terms are acceptable, and that the forecast cash impact of those contracts won’t have an adverse short-term impact.

Howard was involved in negotiation and pricing on numerous occasions including a multi-year £1.5m contract with a Government department as well as the annual renegotiation of a contract with a large utility company.

“We shared a view that practice management and the finance function should work as a team. As such, Howard contributed to all of the significant decisions affecting the business, and alerted me to threats and opportunities for the business. So much more than a spreadsheet driver.” WS, Head of Practice

4/ Playing a bigger corporate role in the Group

In addition, Howard simultaneously had a role within the central group finance team. His first project was involvement with the founder selling to private equity, where he took responsibility for pulling together the financial due diligence information for the buyer to review. This was no small task with the group having subsidiaries in several different countries.

Subsequent to that he took the lead on various technical accounting and tax compliance projects including group consolidation, statutory accounts and audit, transfer pricing policy as well as due diligence and subsequent financial integration of a small acquisition.

5/ Critical role in due diligence

In 2019 the business was sold from one private equity firm to another.

Throughout the process, Howard liaised with acquirors, lawyers and other advisors on due diligence, forecasting, legal documents, funds flow, and through the completion process.

He also provided all group input and advice into the banking agreement being negotiated by the buyer to ensure that banking terms, security, and covenants were achievable and reflected the Group’s needs.