The IFT Societal Impact Report highlights the need for early intervention

The IFT Social Impact Report highlights the need for early intervention.

Last week our Managing Director, Mark Spragg, posted an article about creating long term success from a business turnaround situation. In this article he highlighted the need for businesses to take early and clear action if a company is facing a crisis of revenue, margin, or liquidity.

This week has seen the publication of the Institute for Turnaround’s Social Impact Report. This report highlights the impact that IFT accredited professionals, like Mark, have had in 2022-23, saving an estimated 55,000 jobs and adding £2.6 billion in shareholder value.

The report does however highlight the real challenge of identifying business challenges for business leaders. Surprisingly, over half (54%) of distressed companies are unaware of their financial troubles until it was too late, often due to insufficient data and underperforming finance functions. However, a tendency to optimism over realism can be just as damaging.

With interest rates rising, after an extended period of cheap borrowing and demand softening in many sectors due to the cost of living crisis, it is hardly surprising that company insolvencies are significantly higher in 2023 than last year, a trend that is expected to continue. This trend is mirrored in the IFT survey with demand for turnaround management services rising. Over 90% of IFT members report being busier in 2023 than in 2022, and more than 95% anticipate increased activity in the next 12 months, with a sharp uptick in Q4 2023.

Companies that are stressed or distressed should remember that there can be a real and profitable future: the UK has significant turnaround expertise, and the legal and financial frameworks work together to help distressed companies get back on their feet – but, just as with medical issues, early diagnosis and intervention will lead to much better outcomes both for the individual business and wider society.

About the IFT

The Institute for Turnaround (The IFT) is the UK’s leading membership organisation for turnaround experts. We bring together independent professionals, bankers, investors, and advisers to evolve the profession and respond to new challenges and trends. We are an incubator for turnaround talent, connecting, nurturing, and developing a community of experts at all stages of their career.

For more information contact:

Tel:                         +44 (0) 20 79479515

Email:                    info@the-ift.com

Website:              www.the-ift.com