Pan European Leisure Project

The challenge

The advancing age of the principle stakeholder and the diversification of the wider group interest, meant that this part of the business was no longer considered core to the overall group operations and there was a desire to dispose of the business.

Previous attempts to achieve a sale had failed due to the inherent problems and complexities that existed within the group. Successive management teams had failed to tackle the issues and turn around the business. A combination of poor management, lack of control and direction, inefficiency, overstaffing and spiralling costs meant that profitability had further deteriorated.

Implementations

An in depth review was undertaken of the business and its operation. Hemro Hospitality created a business plan of short, medium and long term actions designed to create a platform on which to deliver the changes required to turn the business around and prepare it for an eventual sale.

After reviewing all areas of the group operations, staff, products, policies, finance, sales and marketing, the following was implemented:

• Centralisation of head office.
• Closing down loss making sectors and selling off non profitable assets.
• Replacing, restructuring and recruiting a new senior management team.
• Reviewing the pricing and product strategy.
• Restructuring the sales and marketing department and implementing a standardised product pricing strategy.
• Re-branding and re-marketing the business through the creation of a new web site, introducing a booking engine and SEO techniques coupled with a new advertising campaign.
• Implementing a cost reduction and control programme across all areas of the business and across the various jurisdictions.
• Improving the financial management and reporting function.
• Rationalising the group’s corporate structure, which consisted of around 45 companies, to a more manageable number in order to simplify the operation with consequent savings.
• Improving the quality of financial information and reporting and streamlining the group’s financial reporting procedures so that standard daily, weekly, monthly and flash reports were delivered to senior management in a timely fashion.

Achievements

As a result of this approach there was:

• A 169% increase in profitability in twelve months, with EBITDA rising from €3.4m to €9.3m in year one and then €10.75m and €11.5m in subsequent years.
• Through cost reductions and rationalisation around €9m in cost savings was achieved.
• Project management and positioning of the business for a sale to a third party backing this up with the preparation of the necessary financial and legal due diligence pack and resulting in a successful sale for c£50m the next year.