Latest Press Releases & News

July 2010

One-Off Triple Win Growth Opportunity for Private Equity

When a recession actually occurs, everyone knows where they are and, difficult as things may be, there’s a “we’re all in this together” sense to it. The early-stage priorities are clear: reduce costs, reduce inventory, and reduce anything and everything that can lighten the load.

However, later, when the recession ends, there is not the same commonality of experience … except, maybe, confusion. Early-stage recoveries can be unpredictable, messy and, frequently, unreliable. The reason why these treacherous conditions arise is, of course, because recoveries possess no homogeneity or symmetry.

During the depths of a recession, try as they might to stave off disaster, some companies do go under. This sets up a new marketplace dynamic that only really reveals itself when things start to improve. At this point, fewer companies find themselves trying to respond to unplanned order levels.

The result is the worst of all possible worlds: companies that, after a long period of dismal trading, need desperately to be able to exploit growth opportunities, find themselves unable to do so.

Newton, Europe’s leading operational and financial improvement specialist, believe we are at this point in time right now. “Partly driven by customers replenishing depleted inventory levels and partly competitors going under, we are now seeing businesses with order books exceeding demand. This is causing serious strain on supply chains that have been weaned for leaner times. The result is that companies are seeing lead times extending, delivery performance deteriorating, customer satisfaction dropping, marginal costs accelerating and opportunities being missed” said Tom Wedgwood, Director at Newton

The situation is particularly poignant for private equity because liquidity remains so restricted. The opportunity for portfolio companies to exploit these market opportunities and deliver value through internal processes and efficiencies is surely not to be missed.

In fact, Tom Wedgwood makes the point that this activity can deliver a triple win: “Win 1, because operating performance improvements directly enhance portfolio value. Win 2, because the improvements afford positive PR opportunities by demonstrating to a sceptical world that private equity can play a key role in a more prosperous future by growing businesses and protecting jobs. And Win 3 because, in a world where up to 50% of mid cap firms may disappear and are ultimately competing for survival, demonstrating an ability to grow a portfolio’s turnover and profit is an important element in ensuring success in raising future funds.”

Email laura.skett@newtoneurope.com to request Tom’s whitepaper ‘Private Equity: How to exploit an extraordinary opportunity in a world turned upside down’.

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June 2010

Newton Announces Savings in Excess of €0.8 Million Per Annum at Rutland Partners' CeDo Group

Leading Turnaround and Restructuring Investor Chooses Newton to Enhance CeDo Group’s Operational Performance on the Back of Successful Pre-Acquisition Due Diligence.

Newton today announced that it has successfully completed a project with Rutland Partners’ CeDo Group, one of Europe’s leading manufacturers of household disposables, to increase performance without capital expenditure at their site in Katy Wroclawskie, Poland. The project, which was one of several opportunities originally identified in the pre-acquisition operational due diligence, delivered significant increases in aluminium rewind efficiency equating to €0.8m annualised profit improvement.

Back in June 2009 Rutland had exclusivity to purchase CeDo and called upon Newton to perform operational due diligence on the company’s business plan. Working in partnership, Newton and CeDo identified significant potential savings through opportunities in efficiency, yield, capital expenditure avoidance, value engineering, reduced labour cost, in-sourcing product, energy reduction and increasing capacity. Following Rutland's successful acquisition in September 2009, Newton was appointed to work with CeDo's management team to deliver the opportunities and uncover the value identified in the due diligence exercise, commencing with the project at CeDo’s aluminium rewind facility. Rutland has since gone on to win the ‘Buy-out of the Year Award’ at the M&A Awards in May 2010 for the acquisition.

“Rutland selected Newton on the back of a longstanding relationship and proven track record in operational improvement” said Ben Slatter, Partner at Rutland. “Newton has made significant improvements in several of our previous investments, delivering material savings on each occasion. We are confident that Newton will increase CeDo’s profitability considerably and have already seen the benefits in the aluminium rewind business” he added.

CeDo’s aluminium rewind business faced three key challenges which were limiting the performance of their operations: inadequate capacity to manufacture everything in-house; material losses; and roll quality. Newton were brought in for an 18 week project to address the challenges and establish new processes to enhance the profitability of the business.

“Newton performed a series of complex split-solving exercises on the shop-floor with our machine operators to identify the causes of the capacity inefficiencies” said Les Jakeman, Group Manufacturing Director at CeDo. “Working together, this enabled us to challenge cycle times, which ultimately allowed us to increase machine speed by 50% on some products, allowing for all manufacturing to be brought in-house” he added.

Newton made further machine modifications and implemented a short interval control system to manage the opportunities around aluminium waste, quality and downtime. “Making various adjustments we have made a 45% increase in aluminium rewind efficiency, reduced aluminium spend by €0.4m, adding €0.8m of annualised profit to CeDo’s Polish business” said Tom Wedgwood, Director at Newton. “To ensure the improvements are sustained we have provided the CeDo team with the skills and information needed to monitor and drive further improvements going forward by implementing Newton’s unique TrackerTM System” he added.

Newton has recently moved onto a further opportunity identified in the due diligence, this time at CeDo’s recycling facility in Holland.

Ashford and St Peter's Hospitals NHS Trust Selects Newton for Theatre Utilisation Improvement Project

Targeting £1.6m of annualised savings through increasing and optimising theatre utilisation at the Trust’s two hospital sites.

OXFORD, June 10 2010 – Newton, Europe’s leading operational and financial improvement specialist, today announced that Ashford and St Peter’s Hospitals NHS Trust, a leading Trust that is based across two hospital sites in Surrey, has chosen Newton to deliver improvements in their theatre utilisation. The project, which forms part of the Trust’s mission to continually improve their clinical, financial and operational performance in their theatres, is to increase utilisation and optimisation while delivering £1.6m per annum of savings.

Newton plans to identify and deliver the Trust’s targeted savings by supporting the Trust team across multiple avenues that will involve; increasing in-session utilisation, which will include reducing late starts, turnarounds and early finishes; increasing session uptake; reducing patient cancelations whilst optimising patient attendance and experience, as well as reducing lost time; improving procedure effectiveness; and implementing information systems bespoke to the Trust to sustain and underpin the results delivered.

“Newton has worked on many theatre utilisation improvement projects that have typically saved each NHS Trust between £1-2m p.a. of recurring savings. Recently we completed a similar project at Northampton General Hospital that saved over £1m p.a.” said Andrew Hawes, Director at Newton. “We are delighted that Ashford and St Peter’s Hospitals NHS Trust selected Newton as the best people for the job. We are confident that we will exceed the project’s target savings and hope to achieve around £2m” he added.

Newton supports EWB Volunteer on Small Wind Turbine project in the Philippines

Richard Jones spent two weeks in the Philippines working with an EWB volunteer to support SIBAT (a medium sized NGO) in their small wind turbine programme.

During his time he facilitated some of SIBAT’s strategy planning workshops and helped develop deliverable based 3yr plans. He also setup a number of simple project management tools to help them deliver more successful projects. Read more click here.

Newton and Babcock Announce New Pulse Line Production Process for Military Vehicles

Leading UK player in engineering support services chooses Newton to enhance the production of tactical military vehicles for the British Armed Forces.

Production of protected patrol vehicles, under an Urgent Operational Requirement (UOR), destined for frontline use by British troops in Afghanistan, has taken a significant step forward in terms of efficiency after the introduction of a new Production Management System which enhances the production line at the manufacturer’s Devonport Dockyard site. The IT-based production management system has been developed, in conjunction with Babcock, by Newton, Europe’s leading operational and financial improvement specialist.

Babcock, a major player in the engineering support services market, has announced that it has successfully completed a three month-long project to set up this production management system for controlling the assembly of military vehicles. The development of the production line, 3 years ago, enabled Babcock to control materials and labour flow during the production process and to optimise output and reduce costs while maintaining high quality standards. Newton’s Pulse™ Production Management System is an additional tool, which enables Babcock’s engineers to target more accurately the way they plan assembly of the vehicles using modern efficiency measures to reduce bottlenecks, track components and cut out time-consuming procedures. Babcock managers are using Pulse™ to monitor, in real-time, the status of the “flow” of vehicles along the production line to enable them to get the best out of the line and re-deploy personnel and resources to best effect.

For over a century, Babcock has been a name synonymous with ultra-reliable engineering excellence and best practice. Babcock selected Newton to help it develop and implement the pulse line as a result of the company’s proven background in manufacturing performance improvement and best practices.

Babcock, whose customers include the Royal Navy, British Army and Royal Air Force, has been preparing itself for future build contracts of modern high value military vehicles. “We made a strategic decision to enhance the efficiency of our production line. We wanted to better support our customers by providing efficient, high quality and low cost assembly solutions,” said Chris Dunn, Land Systems Director at Babcock. “The Pulse™ Production Management System has helped manage the variation of the build process, while consolidating the cost per job”.

The production line, now controlled using the Pulse™ Production Management System moves parts through 12 production cells. Pulse™ collects real time data, providing visibility of the current status of the line. This allows the production team to proactively respond to any issues, as well as providing accurate planning and control of vehicles and materials.

“Newton’s Pulse Production Management System was specifically adapted for Babcock’s current and future build contracts, helping to control variation in cost, quality and the delivery of vehicles,” said Kevin Jones, Director at Newton. “It enables them to reduce build times, eliminate re-work, improve materials management, alleviate quality deficiencies, reduce lost time and predict material flow.”

“With this new pulse line process, we will see significant benefits and cost savings. We have already eliminated 250 hours per month of lost time on the line and we foresee a 15-20% reduction in labour cost per vehicle,” said Roger Gillespie, Equipment Solutions Managing Director at Babcock. “We are all really impressed by this system and the results it can deliver.”