IT’S BEEN AMAZING, AND SAD, for me to see how rapidly RSM Tenon’s fortunes have changed. Now different skillsets are needed to revive the listed firm.
The departure of its larger-than-life leader Andy Raynor has seen less expansive decisions required to turn the firm around – and one of those decisions has been the recruitment of Donald Muir.
Muir has the reputation of being a safe pair of hands, both among the lender community and his insolvency peers, racking up a string of successful turnarounds.
One of his most recent adventures found him sitting on the board of now insolvent Scottish football club Rangers as a director. As the Lloyds go-to guy it was reported that Muir was catapulted onto Rangers’ board by the bank to keep an eye on its efforts to reduce its debt – with the majority of that debt owed to Lloyds.
Rangers subsequently reduced its debt from £33m to £18m, and Muir stepped down along with Lloyds on the day current owner Craig Whyte took over.
Muir has received criticism for his role at Rangers during an incredibly tough time for the club.
But Institute for Turnaround CEO Christine Elliott says that Muir has a reputation for being very good at dealing with complex situations and at handling different stakeholder objectives. He is also a dab hand at advising senior management on how to sustain the restructuring – a role he took up at Northern Rock following its collapse.
Now his safe hands have been placed on RSM Tenon.
Lloyds agreed with the firm detailed terms for committed credit facilities of £88m until October this year. The terms’ contents would be formalised later. RSM Tenon will need to make a payment of £10m on 31 October, the £28m overdraft facility will be converted to a committed facility and interest payments will accrue but not become payable until the end of October.
Lloyds has been the sole banker for the firm since the inception of the group. It is unclear whether Muir has been parachuted into RSM Tenon at Lloyds’ request.
But I guess the bank is less than pleased to find out in the half year results earlier this year that revenues fell 9.3% to £107.8m for the half year ending 31 December 2011; and the firm posted an £11m loss compared to the £8.5m profit for the same period a year earlier.
However, according to an email seen by Accountancy Age RSM Tenon chief executive Chris Merry has recruited the safe hands to work on a programme management that will co-ordinate and monitor all the efforts the firm makes in turning its fortune around.
And turning fortunes around is no new concept to Muir. Aside from Rangers he won the Institute for Turnaround award for his work in the Public Sector in 2008. His efforts to turn around a Brighton and Sussex University hospital NHS Trust saw Muir deliver £43m of savings which were not only a year early but, £9m more than anticipated.
The trail of fixed up companies in his wake is plentiful. He worked as CFO then CEO at telecoms business Telspec which posted a £10m loss with Muir’s magic touch turning it into a £4m profitable business in just a year.
He later took on a similar management, but with a turnaround element, role at Cable & Wireless which he is quoted in the Financial Times as saying was “burning cash”. It had losses of £600m but was breaking even when he stepped down two years later.
Muir is more than qualified to help RSM Tenon with its plight to reduce headcount by 10% and recover from the damage its last financial statement revealed.
The question is whether he can help the firm turn around quickly enough to satisfy its lenders.
Rachael Singh is Accountancy Age’s senior reporter
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