Professional Services Consultant, Fraser Burnett, recently caught up with Ross Penrose, Manager at Interpath Advisory, in the first instalment of our ‘Why Restructuring?’ interview series.
1. Why did you pick a career in restructuring?
The world of restructuring brings a variety of skills to the table. The environment in which you work is always dynamic and changing, bringing fresh challenges and problems to solve. It is not a job which involves being sat behind a desk five days a week, but can involve being at the management table and steering businesses or finding new and innovative ways to help. One day it could be a paint manufacturer in the north of Scotland, and the next it could be a garden centre in Glasgow.
Restructuring requires the skills of so many other areas within our profession. There are aspects of corporate finance, forensic accounting, and audit. You need to be able to pull on all of these skills, but often with limited time and funding to do, so which can only spark creativity.
I see the role of restructuring as more of a doctor than as the ‘undertaker’ that so many people consider it to be. A chance to make an impact. Restructuring involves helping companies navigate financial distress, improve operations, and return to profitability. Professionals in this field can make a tangible difference in the survival and success of businesses, which can be highly fulfilling. But regardless of economic tides, good or bad, there will always be a need for restructuring professionals.
2. What have been some of your career highlights?
I am still early in my career, but I guess I am starting to come to the end of my tenure in the “Next Generation” when I am being asked questions like this.
Highlights in restructuring are not always about the biggest fees or financial wins for your firm, but about finding the best solution or outcome for a client. For me, this has often involved selling a business, either through pre-pack or post-insolvency, and seeing it flourish on the other side.
Some of the most interesting and, dare I say it, fun moments in my career have involved the active trading of businesses in insolvency. Taking on a managerial role, assessing stock lines, negotiating with customers, and running a team of staff to create value in the wind down of a business have created some of the best learning experiences in my career to date. This aspect of the job brings a genuine urgency and intensity that you cannot get in many other roles.
3. What have been some of the challenges in restructuring over the last year? And what do you think are the key opportunities now?
In the Scottish market, we face unique challenges in restructuring. Unlike other regions, we don’t have the same density of high-turnover businesses. Many larger companies that are registered in Scotland often have their management headquarters situated in London. This means that restructuring in Scotland frequently involves working with small and medium-sized enterprises (SMEs), which are often family-owned.
One significant challenge is that directors of these businesses are not always quick to seek restructuring assistance. This hesitation can stem from perceived limitations in funds and the costs associated with restructuring professionals, or from pride. As a result, it can sometimes be too late by the time a director asks for help.
Additionally, a large proportion of restructuring work used to come through lenders and HMRC. However, high street banks and HMRC lost their appetite to act for a period due to the impact of COVID-19 and the backlash banks faced following the financial crash of 2008. Consequently, banks spent a large period of time more likely to continue supporting troubled businesses and intervene less aggressively than they once did. As a profession, we need to find new and innovative ways to showcase our services and create value for all stakeholders.
One of the biggest opportunities we can expect is the emergence of new, innovative approaches to restructuring. The Restructuring Plan, introduced in 2020, has been slow to gain traction, especially outside of London and large-scale restructures. With a small number of SME restructuring plans now having been devised, we have an opportunity to bring another tool into the fray for the restructuring toolbox to help save businesses in Scotland.
4. What one piece of advice would you give someone who is starting a career in restructuring?
Consult. Every project or case you encounter will present new and unique problems to solve. Your experience in restructuring will be completely different from those around you, depending on the jobs you work on. However, you will always find that those who have come before you have valuable experience and expertise to draw on. Everyone in restructuring has a plethora of anecdotes and stories that ultimately make up their learning experiences. Don’t hesitate to seek advice and learn from the experiences of others in the field.
If you have any questions about this ‘Why Restructuring?’ interview series, or you would like to get involved and share your thoughts on the restructuring function, please contact [email protected].
