Tag: Deloitte

Redcentric is a mess but it claims to have a plan

cunning-planManaged services outfit Redcentric appears to be in a total mess but thinks it has a plan to get itself out of trouble.

Last month the outfit fessed up to multi-year accounting errors which meant it overstated net assets by at least £10 million and its net debt was nearer to £30 million. CFO Tim Coleman was “placed” on “garden leave with immediate effect.”

Redcentric delayed interim results for the half year ended 30 September until Deloitte and law firm Navarro could do a “forensic review” of its numbers. The results show that things were much worse than expected and the cumulative overstatement of net assets and profits after tax up to the half-way stage of this fiscal year was £20.8 million. To make matters worse more than a quarter of this arose in the six months of this financial year. The remaining £14.9m related to the years up to 31 March 2016.

Normally you could not lose that much money unless it was being taken by a bloke with a gun aided by a bloke outside with the motor running.  However, the report ruled out theft.

“The misstatements are attributable to profit overstatement over several years with revenues being overstated and costs understated in broadly equal proportions,” the firm told the London Stock Exchange.

Net debt turned out to be “materially higher than was originally reported” and was £37.8 million at the end of March and £34.4 million at the end of September.

Redcentric said the net debt in those periods was “not representative” because creditors had been “significantly stretched at those dates”. The average net debt position over the past eight months to the end of last month was £42 million.

Redcentric has recalculated historic banking covenants and has received waivers such that it remains compliant with the Ts&Cs. This will aid changes to billing and credit control management systems and processes, and the continued restructuring of the finance department.

The delayed half-year numbers to September will be reported before the end of the calendar year, and Redcentric forecast sales to be £53m and EBITDA £9.1m.

Redcentric’s share price almost halved last month when the news first broke of the financial errors; they recovered somewhat in the interim and were down nearly five per cent today.

Beware fake presidents

Screen-Shot-2015-03-23-at-7.21.27-PMBeancounters at Deloitte arewarning companies against a ‘fake president’ scam which apparently is rather convincing and has claimed several reseller scalps.

According to a Deloitte press release, the scam works by convincing an employee of a company to make an emergency bank transfer to a third party under the guise of paying off a company debt, sealing a contract or making a deposit.

Deloitte’s said: “We wish to draw the attention of our clients and suppliers to a wave of frauds affecting many companies at the moment. We recommend our clients and suppliers to stay vigilant.

“These type of frauds are created by well-organised criminal organisations with a complete knowledge regarding the market, structure and customers of the companies they are attacking,” it added. “This knowledge is used to give them all necessary arguments to convince their victim and act in the wanted direction,”.

The scam gets its name from the fact that the fraudsters impersonate a group executive such as the president, CEO or CFO or a trusted partner such as lawyers, auditors, accountants of the company.

They contact a specific employee’s company by reaching a manager or any employee by phone (imitating a voice) or emails (using the company signature), requesting an urgent bank transfer to a foreign bank account.

The transfer is then done manually using a direct phone call or fax to a bank. They usuallu use the victim’s company procedures for urgent business transactions.

Deloitte said there were several ways to avoid falling victim to this scam, including making all staff aware of the issue, and ensuring they respect standard working procedures.
It was important to verify the legitimacy of the request by calling back the person using the contact information stored in the contacts and not use the phone numbers the scammers give you.

It seems to us that it is just a more personal version of the Nigerian scam, but apparently it is a lot more successful, presumably because it is done over the phone by someone who sounds like they could be the real deal.

Robots will steal UK jobs

Oxford's own Bridge of Sighs, pic Mike MageePeople in the UK will have more time to watch daytime TV if the result of a survey by an Oxford University team of scientists in conjunction with Deloitte is to be believed.

According to the survey, 35 percent of UK jobs and 30 percent of jobs in London look set to be taken over by automatons or by automated processes. London employers say advances in technology will be the most important reason for job losses.

And if you’re unlucky enough to be earning less than £30,000 a year, your job is five times more likely to be replaced.

While 73 percent of London businesses plan to increase their headcounts, 84 percent of those firms say skills of employees will have to change to include digital know-how, management and creativity.

Over 36 percent of London businesses will invest in bigger properties, the survey said.

Brits are nuts about their smartphones

smartphones-genericA third of British people look at their smartphones just after they’ve woken up, according to a survey conducted by Deloitte.

Before they attend to essential functions, 11 million UK adults check their phone within five minutes of waking.  They first check their text messages, then their email and then turn to Facebook and the like.

And, said Deloitte, one in six British adults look at a smartphone over 50 times a  day.  That’s not true for silver surfers. People between the are of 65 to 75 only look at their smartphones 13 times a day.

Ed Marsden, a lead telecoms partner at Deloitte somewhat understated the matter. He said: “Mobile phones have clearly become something of an addiction for many and has led to some people looking to unplug their devices and undergo a digital detox.”  Yes, there really are digital detox courses.

Twenty percent of people surveyed said they chose a network with the best internet connection, rather than quality for phone calls.

Distie goes into administration

pc-sales-slumpKMS Components  has entered administration, with Deloitte acting for the company.

The distie, which specialised in products from Asustek, Microsoft, and other big names has stopped trading, with a notification on its website saying that Deloitte names Richard Hawes and Matthew Smith are the joint administrators.

The Welsh company was operating more or less normally until yesterday.

A statement on the web site says: “Richard Michael Hawes and Matthew David Smith were appointed Joint Administrators of KMS Components Limited on 8 January 2014. The affairs, business and property of the Company are being managed by the Joint Administrators.

The Joint Administrators act as agents of the Company only and contract without personal liability.

The Joint Administrators are authorised by the Institute of Chartered Accountants in England and Wales (ICAEW). All licensed Insolvency Practitioners of Deloitte LLP are licensed in the UK.”

There’s no word about the fate of the staff.

HMV to be aquired by Hilco

hmv-administrationTroubled HMV has grabbed a lifeline from Hilco buying it out.

The store, which went into administration earlier this year, putting thousands of jobs at risk, has been rescued by specialist restructuring firm Hilco in what is believed to be a £50 million deal.

Hilco now has 132 HMV stores, and nine branches of the Fopp chain. It is expected up to 2,500 jobs could be saved.

The chain is expected to be run by a combination of HMV and newly-appointed Hilco executives, while suppliers are also rumoured to have gone running back to the company offering new terms and given a positive nod to the deal.

HMV could be in safer hands with Hilco already having experience with the brand in Canada, which it bought two years ago.

The purchase rumours emerged a after Jessops was saved by Peter Jones.

HMV to shut 66 retail shops across Britain

hmv-administrationHMV’s administrators announced Thursday that 66 retail stores across Britain will close their doors over the next two months.

HMV, which entered administration in January, currently operates 220 stores in the UK. Deloitte said the affected stores employ 930 staff, but no fixed date has been set for their closure yet.

Staff quickly took to Twitter, talking about redundancies made across HMV offices and distribution centres.

Deloitte, HMV’s administrator, is in talks with restructuring specialist Hilco about a possible takeover of HMV. Hilco is said to be in talks with suppliers and HMV’s landlords, as part of an effort to save about half of the shops in the UK, Express reports.

“This step has been taken in order to enhance the prospects of securing the business’ future as a going concern,” Nick Edwards, joint administrator at Deloitte, said. “We continue to receive strong support from staff and are extremely grateful to them for their commitment during an understandably difficult period.”

HMV became a hugely profitable enterprise following the introduction of CDs and cheap video tech in the eighties. It quickly expanded around the world, opening shops in North America and on the continent. Its retail operation peaked in the naughties, with 325 shops up and running. However, HMV failed to recognise the threat posed by online distribution to its traditional retail approach and by the late 2000s it was in more trouble than it could handle.

HMV is not the first retail outfit to face collapse due to online competition. Camera chain Jessops and DVD rental business Blockbuster were forced to close last month.

The HMV stores set to close over the next two months are:

England: Ashton-under-Lyne, Barnsley, Bayswater, Bexleyheath, Birkenhead, Birmingham Fort, Blackburn, Boston, Bournemouth Castlepoint, Bracknell, Burton-upon-Trent, Camberley, Chesterfield, Croydon Centrale, Durham, Fulham, Huddersfield, Leamington Spa, Leeds White Rose, Loughborough, Luton, Manchester 90, Moorgate, Orpington, Rochdale, Scunthorpe, South Shields, Speke Park, St Albans, St Helens, Stockton-on-Tees, Tamworth, Teesside, Telford, Trocadero, Wakefield, Walsall, Walton-on-Thames, Wandsworth, Warrington, Watford, Wellingborough, Wigan, Wood Green, Workington

Scotland: Dumfries, Edinburgh Fort, Edinburgh Gyle Centre, Edinburgh Ocean, Edinburgh Princes Street, Edinburgh St James, Falkirk, Glasgow – Fort, Glasgow – Silverburn, Glasgow Braehead, Kirkcaldy

Northern Ireland: Ballymena, Belfast Boucher Road, Belfast Forestside, Coleraine, Craigavon, Derry, Lisburn, Newry, Newtownabbey

Wales: Wrexham