CASE STUDIES
Featherstone - SKSi
The Case
From January 2019 to December 2020, we were instructed to assist with an Individual Voluntary Arrangement by Peter Hall, Supervisor of the IVA. The IVA consisted of a property portfolio of a number of investment properties, ranging from 1-bedroom flats to 5-bedroom detached properties, nationally. An initial marketing appraisal of £7.45 million was determined, with mortgages totalling approximately £4.6million across the profile.
We facilitated and managed the marketing and sale of 13 properties over a 23-month period, which included 2 blocks of flats. The developer also carried out selected sales under their own management. We also provided marketing and disposal advice with regard to a number of other properties without equity, that subsequently had to be surrendered to the lenders. We also advised on a number of joint venture properties where the developer was part-owner.
The Challenges
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The properties were tenanted, which led to additional restraints in carrying out marketing and arranging viewings.
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Work had been carried out on some properties without proper planning consent. This caused a particular problem with a Grade-II listed property in Bath.
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A significant number of properties had issues or higher outstanding mortgages than we were initially made aware of.
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Due to the Covid-19 Pandemic, serving notice to the tenants had increased from 2 months to 6 months, resulting in substantial delays in obtaining realisations through sales.
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Additionally, the property market was struggling towards the end of 2019 into early 2020, with property values stalling and the market decelerating.
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A lack of available documentation also hindered efficient progress.
The Results
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Working with a range of reputable letting and estate agents within the locality of the properties, we were able to successfully ensure the properties remained fully managed, whilst ensuring tenants were regularly informed as to the process. Management included arranging for numerous repairs and maintenance works to be carried out, whilst keeping our client fully informed.
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We liaised with various mortgage companies in order to negotiate and agree settlements for negative equity properties.
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Marketing the properties with strategic email campaigns and liaising with local agents, 13 properties sold for £2.76m, against our initial desktop valuation of £3.42m. Subsequently, reflecting an 81% realisation of our desktop valuation, which we feel is an exceptional result, taking into consideration the number of issues with the properties, that we were unaware of at the time of valuation, and furthermore, the compromised property market during the early stages of the Covid-19 pandemic.
Client Feedback
We faced a number of challenges in dealing with these properties so were pleased to be working closely alongside Proudley Associates. Liv was proactive and adaptable and worked hard to ensure the properties could be realised for good value.
FRUEHAUF
The Case
In July 2021 we were contacted by Fruehauf Ltd, a major HGV/tipping trailer manufacturer, who required an urgent business and asset valuation to assist with restructuring the business.
The Challenges
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Significantly restricted timescale. We were contacted during the weekend and indicative figures were required to be provided by the middle of the week.
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Scale of the project being a £25 million turnover business with a 64-acre site, with nearly 100,000 sq. ft of factory and office space, possessing substantial machinery and assets.
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Diverse and comprehensive range of heavy metalworking and assembly line machinery & equipment.
The Results
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Two highly experienced valuers travelled 3.5 hours to the site early Monday morning, to meet with the MD & FD, and obtained all necessary information on the fixed assets, stock, business financial performance and assets subject to finance.
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Completed a walkaround detailed asset register within 48 hours.
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Immediately carried out in depth research on the market value of the predominant machines and over the subsequent 48 hours, completed the comprehensive valuation of several million pounds worth of assets, which included plant & machinery, office furniture & IT equipment, vehicles, trailers and stock, taking into consideration a number of encumbered assets. We also provided a valuation of goodwill, order book and intangible assets.
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As requested within our instructions and terms of engagement, we provided the client with indicative values by close of play on the Wednesday of the immediate week.
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The formal valuation report was submitted within the following 48 hours.
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Produced a confidential sales teaser and online IP-Bid advert on the instructions of the proposed Administrator.
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Compiled a schedule of interested parties, distributed a non-disclosure agreement and prepared a comprehensive sales pack.
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A contentious appointment of a third Joint Administrator led to the appointment of another agent to avoid any potential conflict of interest.
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The management team, in conjunction with new investors, subsequently purchased the business & assets, and safeguarded the future of a substantially large workforce and well-known brand name, within the industry.
Confidential Share Valuation
The Case
In January 2022, we were instructed by a retained private client to carry out a valuation of the shares held by 4 companies within their larger group. The companies operate within the UK and internationally. We had to produce the valuation in a very short period of time in order to meet internal accounting deadlines of other companies within the group.
We used three methods to value the shares of each entity; weighted average of past profits, weighted average of predicted future performance and net asset value.
The Challenges
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The timescale was very tight to carry out three valuations of each company
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Some information on future performance was not available
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Various information was in different currencies and had to be converted at an agreed upon date
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Each company operated on a significant scale and their costs and administrative expenses had to be analysed and understood
The Results
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We liaised with the Finance Director to source the relevant information and develop an understanding of typical costs and administrative expenses in any given year
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We made appropriate adjustments to the figures for accounting lines not applicable to a hypothetical purchaser of the business
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We carried out the valuations and methodically went through them with the Finance Director to ensure understanding and agreement.
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We produced a comprehensive valuation report for each entity within the agreed timescale.
Client Feedback
I was very impressed with the speed of Proudley dealing with the assignment and their general availability meant that we could conclude the matter expediently without any delays.