May 16, 2020

How to streamline your finances post-merger

Construction software
Mergers and acquisitions
Construction software
Mergers and acquisitions
Admin
3 min
Top Five Tips for Construction Claims Risk Management
On paper, merging two companies can seem like an ideal platform for profitable growth going forward. From economies of scale to the elimination of dupli...

On paper, merging two companies can seem like an ideal platform for profitable growth going forward. From economies of scale to the elimination of duplicate departments, mergers and acquisitions represent a great opportunity to maximise efficiency and capitalise on two complementary asset bases. The construction sector has seen many such deals in recent years, with industry giants like Taylor Wimpey reaping the rewards of amalgamation.

However, the path to an effective merger is fraught with risk in any industry. Daimler Benz incurred a $30 billion loss when it bought (and subsequently sold) Chrysler. While AOL Time Warner’s disastrous $186 billion tie-up is the stuff of legends. A number of key studies have concluded that the majority of M&As fail to meet their stated objectives and the reasons can often be as simple as culture clashes or unwieldy finances.

This latter aspect is comparatively easy to oversee, which makes it all the more surprising that more companies don’t prioritise economic synergy when conducting due diligence. These are some of the key things to look for when mapping out a merged construction company’s financial future:

Delete the duplicates

There’s simply no need to have two financial directors and two heads of accounts any more along with other duplicated roles in the newly merged finance function. If each company had ten financial personnel prior to merging, it is quite likely that something nearer to twelve would be a more sensible number for the combined outfit than the original twenty.

Apply best policy everywhere

A common catalyst for a merger or acquisition is that one company is outperforming the other. Effective business processes should be carried over wherever possible to the new partner and any successful economic approaches should also be shared – even if they belong to the weaker company. A classic example of this is the implementation of one organisation’s construction finance software across the whole of the newly formed enterprise.

One system for all. Providing consistent information to management is key to the successful control of a new merged enterprise. This can only be achieved through the use of a common system. Work with your IT partner to plan a rapid migration to a single platform to gain this benefit as soon as possible.

Join the dots

Chains of command often get broken during a merger or takeover, so it’s imperative to ensure people know who they answer to at all times. Workflow doesn’t stop during a merger and there will always be purchasing decisions to make and invoices to be settled. Before the acquisition gets underway, clearly defined channels of communication should be identified to ensure that everything runs smoothly during any transitional period. Communication is key, after all.

Act without delay

Following a well-defined timetable is one of the most crucial aspects of any successful integration. Problems need to be identified as quickly as possible and there’s no point trying to hide or sugar-coat the true status of a post-merger company. Even if additional resources are required to keep the original timetable on-schedule, it’s worth the short-term investment to prevent disruption or delays from damaging the new firm’s efficiency and effectiveness.

Be resourceful

Lack of resources is a recurring complaint among senior managers, but new arrivals from a partner organisation may render this argument void. Make sure this additional resource is managed effectively to maximise this opportunity. Effective construction finance software is invaluable in identifying areas of inefficiency or duplication and projecting potential savings.

Achieve greater efficiency

Maintain cash flow in your construction company with this Cash Flow Efficiency Flowchart that has some top tips to keep your company afloat. 

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Jul 29, 2021

Environment Agency clamps down on plastic films and wraps

Environment
construction
plastic
Recycling
Dominic Ellis
3 min
Environment Agency aware of plastic film and wrap from the construction and demolition sector being illegally exported

Businesses in the waste and construction industries must ensure they deal with waste plastic properly to stop illegal exports, the Environment Agency (EA) has warned. 

The warning comes as the Agency is increasingly aware of plastic film and wrap from the construction and demolition sector being illegally exported. 

Exports are frequently being classified as ‘green list’ waste of low risk to the environment, but are often contaminated with materials such as mud, sand, bricks and woodposing a risk to the environment and human health overseas, and undermining legitimate businesses in the UK seeking to recover such waste properly.

During the last year, the EA has intercepted shipments to prevent the illegal export of this material on numerous occasions. The Agency inspected 1,889 containers at English ports and stopped 463 being illegally exported. This, combined with regulatory intervention upstream at sites, prevented the illegal export of nearly 23,000 tonnes of waste.

Those convicted of illegally exporting waste face an unlimited fine and a two-year jail sentence. But construction firms could also face enforcement action if contaminated construction and demolition waste plastic is illegally exported.

Malcolm Lythgo, Head of Waste Regulation at the Environment Agency, said it is seeing a marked increase in the number of highly contaminated plastic film and wrap shipments from the construction and demolition industry being stopped by officers.

“I would strongly urge businesses to observe their legal responsibility to ensure waste is processed appropriately, so we can protect human health and the environment now and for future generations. It’s not enough just to give your waste to someone else - even a registered carrier. You need to know where your waste will ultimately end up to know it’s been handled properly. We want to work constructively with those in the construction and waste sectors so they can operate compliantly, but we will not hesitate to clamp down on those who show disregard for the environment and the law.”

There are a number of simple, practical steps that businesses can take to ensure that C&D site waste is handled legally.

Construction businesses should check what’s in their waste

  • Different waste types need different treatments and so must be correctly categorised to ensure it goes to a site that is authorised to handle it safely. Businesses can also check if their waste is hazardous as different rules might apply.
  • If you are removing the waste yourself, you must be a registered waste carrier- registration can be carried out here. When a waste collector is transporting your site waste, you must check they have a waste carrier’s licence from the EA.
  • You must also check that the end destination site any waste is taken to is permitted to accept it and has the right authorisations in place. Keep a record of any waste that leaves your site by completing a waste transfer note or a consignment note for hazardous waste which record what and how much waste you have handed over and where it is going.

Waste management industry must adhere to export controls

  • Contaminated C&D waste plastic - including low-density polyethylene (LDPE) wrap and film - must be exported with prior consent from the EA as well as competent authorities in transit and destination countries.
  • Those involved in the export of such waste must ensure that it meets the requirements set under the relevant export controls, such as being almost free-from contamination; the destination sites are appropriately licensed to receive and treat the waste; and waste is correctly managed once received.

The EA will continue to actively target those who export contaminated C&D plastic waste illegally, including any accredited packaging exporters who issue Packaging Waste Export Recovery Notes (PERNs) against such material in breach of their Conditions of Accreditation.

Businesses involved in the shipment of waste are required to take all necessary steps to ensure the waste they ship is managed in an environmentally sound manner throughout its shipment and during its recycling.

Anyone with information regarding the illegal export of waste including C&D waste plastics can contact the EA’s Illegal Waste Exports team at: [email protected] or anonymously via Crimestoppers on 0800 555 111 or via their website 

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