CVA case study: Scottish-based LocksmithsThis locksmith company in Scotland was established in 1851 and offers services to the general public as well as the corporate world. It was bought by the current directors in 2009.
One of the directors had 22 years experience as a locksmith whilst the other brought with him experience as an electrician, so that the company could expand its services to installing and maintaining alarm systems as well as door entry systems. The standards of the workforce are very high and aim to keep the customers happy at all times.
The company started to experience cashflow problems in 2013 due to the recession and the person in charge of ordering was not cutting orders back accordingly. Turnover also reduced having lost a large contract.
In the early part of 2013, the company went through a voluntary redundancy process. Two members of staff were made redundant which cut overheads considerably. Further costs were reduced as the company shopped around for insurances instead of automatically renewing existing contracts.
However, the directors realised they needed to take further action as cutting costs alone wasn't going to resolve the issue.
KSA were approached towards the end of 2013 by the directors with regards to proposing a CVA. The proposal offered 57p in £1 as opposed to 0p in £1 in a terminal insolvency scenario. The CVA was accepted early in 2014.
The company is now installing more door entry systems as the business becomes more advanced. Through word of mouth from existing satisfied customers, more new customers have been secured.