Member News Archives - The IFT

The IFT Quarterly Update: continued strong demand for turnaround support as businesses struggle with debt costs

The IFT’s quarterly update looking at turnaround and restructuring activity across sectors shows continued demand for turnaround support at the start of 2024, with 50% of The IFT’s partner firms surveyed seeing an increase in activity in Q1 2024, with the rest seeing about the same level of activity as the end of 2023.  The busiest sectors for turnaround and restructuring activity in the quarter were real estate and construction. The costs of servicing debt was the most common reason IFT partners saw for businesses experiencing distress, overtaking inflationary pressures which had been the most common factor at the end of 2023.

According to data from FRP Advisory, whilst Quarter 1 2024 saw a lower level of insolvencies than the previous quarter, there was a 2.1% increase in the number of businesses experiencing distress compared to Q4 2023. This may indicate businesses increasingly struggling with levels of debt and costs pressures after a number of difficult years, with often a need for turnaround support to help address these issues and maximise improvement.

As we move through 2024 we will have a greater sense of the degree to which businesses are able to utilise such support and avoid insolvency.

The full update can be found here: Quarterly Review Q1 2024 FINAL

With thanks to FRP Advisory and our partners who contributed to this update.

Future Proof : IFT study of younger turnaround professionals suggests they are more collaborative and solution focused

New report from The Institute for Turnaround and t-Three/Kiddy & Partners highlights key differences between younger turnaround professionals and a broader cohort of professionals 

The skills of turnaround professionals in providing immediate viability and confidence to businesses and stakeholders in those businesses, and in the transformation and adaptation of companies to new or unexpected challenges are an asset to UK plc. The recent economic backdrop has highlighted the value of turnaround in a difficult economic climate, with our latest annual Societal Impact Report highlighting that IFT accredited members saved in excess of 55,000 jobs and £2.6bn in shareholder value in the year 2022-23. When we factor in the work of our partners the number of jobs saved rises to just shy of 150,000.

Turnaround is therefore an important business discipline – a profession of professions, which will continue to be crucial for the success of UK plc. In the longer term, drivers of economic and social change – technology, trade, the geopolitical context- mean that turnaround professionals will need to support businesses to adapt and transform to the evolving landscape.

The Institute for Turnaround and t-Three/Kiddy & Partners have undertaken what we believe is the first survey looking at the characteristics and traits of younger turnaround professionals. According to the research, younger turnaround professionals demonstrate some significant differences when compared to a general population of working people.

The report, Future Proof: The Traits and Attributes of Young Turnaround Professionals, surveyed turnaround professionals from fields such as banking, law and accountancy. They completed Facet5, a globally recognized Five Factor trait personality questionnaire accredited by the British Psychological Society and designed specifically for the workplace.

The responses from participants indicated three key areas where turnaround professionals’ traits and behaviours can be distinguished from those of general employees:

  • Turnaround professionals are more likely to demonstrate behaviour which seeks to resolve differences of view and disagreement in a calm, non-argumentative way to achieve a consensual position.
  • They also show a higher tendency to share their processes and approach, favouring working collaboratively towards a successful outcome, taking into account others’ input and feedback along the way.
  • Finally, those in the participant group show a greater tendency overall towards working to high standards and hence will display a strong sense of duty, responsibility and conscientiousness.

The research highlights the distinctive traits displayed by younger turnaround professionals and also indicates some possible areas of professional development such as stakeholder management skills and strategies for dealing with confrontation. It provides a useful starting point for further research about this important profession and what skills and competencies will be required to ensure future delivery of successful turnarounds.

You can read the full report here.

The IFT’s first Quarterly Update: increasing demand for turnaround services in the face of inflationary and costs pressures

As official figures show that the UK economy entered a technical recession in the last quarter of 2023, today we publish The IFT’s first quarterly update, covering activity in the turnaround sector as well as distress and insolvency statistics for Quarter 4 2023.

This update supplements our annual Societal Impact report which surveys our independent members and corporate partner firms. Last year’s report estimated that accredited turnaround professionals saved an estimated 55,000 jobs in 2022-23, helping UK companies to add £2.6 billion in shareholder value.

The vast majority of surveyed firms specialising in turnaround saw an increase in activity in the last quarter, with construction, real estate and financial services the busiest sectors seeking turnaround expertise.

Inflationary pressures and the costs of servicing debt were the top two reasons turnaround professionals saw underlying business distress, highlighting the difficult economic context for companies seeking support.

With thanks to FRP Advisory and our partners who contributed to this update. These updates will be released on a quarterly basis to provide a snapshot of trends in the turnaround sector and business distress.

IFT Quarterly Update Q4 2023 FINAL

The IFT Review of 2023

As we approach the end of 2023, we are looking back on a productive year and would like to express our gratitude to our members, partners, and stakeholders for all their support and engagement in what has been a busy and eventful time in the turnaround space.

You can find our Review of 2023, including an update on The IFT’s plans for 2024 here.

IFT Societal Impact Report 2023: Adapt, Transform, Succeed

This is the fourth year that the IFT has commissioned a survey of its members to quantify the value of turnaround and transformation. This year’s report estimates that accredited turnaround professionals saved an estimated 55,000 jobs in 2022-23, helping UK companies to add £2.6 billion in shareholder value.

Demand for turnaround management services continues to grow among The IFT’s membership. Over 90 per cent are busier in 2023 than in 2022, and over 95 per cent expect more turnaround activity in the next 12 months than in the last.

The retail sector saw the largest increase in distressed companies in the last year and was the third most common sector seeking turnaround support. The manufacturing and construction sectors were the top two sectors providing work for turnaround professionals, both of which saw an increase in distressed companies over the period. Turnaround experts expect these three sectors to lead demand for turnaround over the next 12 months.

IFT professionals reported that over half (54 per cent) of companies they are called in to assist are simply unaware that they are in trouble until it is too late. This year’s survey showed continued strong resistance among distressed companies to turnaround support. Over three quarters (77 per cent) of IFT members reported cultural resistance to external advice as the most common reason that companies didn’t seek support.

Against this, while turnaround projects typically require an adviser to focus on short-term survival, some 60 per cent of them have involved a full business transformation process in the last year, reflecting the IFT’s focus to “adapt, transform and succeed.”

This year we have focused on challenges in specific sectors and the approach needed to help companies adapt, transform and succeed in the context of the UK’s productivity challenge. The report also draws attention to the welcome greater use of restructuring plans, aligning with our messaging in this area. A link to the full report can be found below.

IFT Impact Report 2023