Focussing strategy - exiting noncore activities

When group strategy changes some business units simply no longer fit but can be difficult to dispose of

Sector: Manufacturing

Situation: Small UK manufacturing business of ancillary products where US group strategy had been recently reset under a new CEO to ruthlessly focus on core products

Operation historically seen more a cost centre than a profit centre, operating at a loss with an insolvent balance sheet

Huge concentration issue with customer base / small scale of operation / legacy issues / poor trading performance meant no realistic prospect of an exit for value

Solution: Disposal to independent control

Outcome: Traded for 1 year+, balance sheet restructured to solvency, and loss making performance turned around

Core business then sold for limited value and rump vehicle then liquidated with no reputational issues for group