An electronic security company in Brisbane with clients ranging from small boutiques to international mega-corporations within Australia was experiencing difficulty with their cash flow, so Mackay Goodwin stepped in to help.
At a base level, the security company provides physical hardware (such as cameras and CCTV), security expertise/monitoring and consultancy to clients, and customised solutions for those who require it.
The high-calibre profiles of the companies represented would have increased the security challenges for any company. For this particular security company, the sheer magnitude of size for the companies of those contracts ultimately led them into incurring significant working capital difficulties, largely formed by insufficiently detailed terms and deliverables combined with timeline blowout, which ultimately formed an unsustainable pattern of loss.
After a time, the company declared insolvency. Continued difficulties had led them to be unable to sufficiently contribute their taxes, and they owed over $2 million to unsecured creditors (as well as almost $400,000 in employee entitlements, including annual leave payments and outstanding employee superannuation contributions). This, in turn, led to suppliers refusing to provide credit, which forced them deeper into financial difficulties.