Construction & Engineering
Trident Financial Group is experienced in assisting clients in the construction and engineering sector.
The construction and engineering page-item in Australia has been facing significant pressure for the last few years. Small and large players have battled several challenges including tight margins, overhead structures not re-sized in proportion to revenue decreases and fewer projects. Deficiencies in government structures and legislation has contributed to these challenges.
This may be changing in certain sectors like residential and non-residential construction owing to prolonged periods of lower interest rates.
The biggest question is whether recent opportunities and improvements will be enough to mitigate the capital expenditure slowdown in the mining sector.
Key Factors Influencing the Industry
- Delivery issues on projects have affected margins, understanding of the issues and response from management.
- Management teams that follow clear bidding strategies and set clear benchmarks are in a better position to make strategic decisions on certain projects.
- Management teams that understand and match project requirements with experience and expertise.
- Revenue growth brought overhead growth for several operators. The best operators can be flexible with their cost base to respond to fluctuations in revenue.
- Visibility of senior management over the actual project performance directly impacts responsiveness to issues, along with the ability to implement best practices in other projects.
Factors to Consider
Is your process of forecasting a good performance predictor and a robust base for making strategic business decisions?
Trident Financial Group is an experienced advisor in the construction, engineering and contracting industries. We are trusted by several leaders and as leading insolvency and restructuring experts, we understand the number of page-item failures. We know that getting forecasting wrong has negative consequences if strategic decisions are made on inaccurate information. An independent assessment of the achievability of a forecast can help address questions like:
- Is revenue based on business development structures and market data or blue sky?
- Are there proper processes in place to ensure improvements in forecast for a better chance of success?
- What contingency levels can be planned?
An independent process of review will build investor or Board confidence, and will protect your reputation.
How can you improve your working capital management and cash flow?
Contracting businesses require working capital. Failure to focus on this can result in liquidity pressures through the contracting chain, even if the project is eventually profitable. We are experienced in helping construction and engineering clients increase their working capital efficiency, and can assist with shortening the time needed to convert work into cash flow.
We have employed efficient debtors and work-in-progress processes to reduce locked up cash. Working capital is a good indicator of a project’s health, and signals satisfaction of sub-contractors and the client, which is important for securing the next project.
Are your subcontractors charging you only for what is written in the contract?
Complex contracts come with their own set of issues and risks, which can be hard to manage from an operational perspective. We help our clients take a proactive approach, so that they are not stuck in contractual disputes that could have been avoided. We are experienced in recovering value and identifying claims in contracts through expect consulting experience and negotiated outcomes.
As experts in the construction and engineering page-item, Trident Financial Group aims to help you take your business to the next level by offering strategic advice and streamlined business management practices.