An interview with James Ashton and Louise Durkan, Managing Director and Head of Financial Advisory.

In an interview to mark the next stage of our Building financial fortitude programme, James Ashton, a leading financial journalist, speaks to Louise Durkan, a Managing Director and head of our Financial Advisory team, about what the future looks like for businesses as we move further out of lockdown and prepare for the post-pandemic recovery. 

The economy is turning up as the COVID-19 pandemic recedes. The FTSE 100 share index is rallying, and the UK is on course for economic growth not seen since just after the Second World War, according to Barclays chief executive Jes Staley. But beyond the exuberant headlines, Durkan sees an uneven recovery across regions and industry sectors. For Quantuma’s Financial Advisory team head, what will mark the winners out from the losers in the next phase is those businesses that have got a grip on their problems and are already hunting for new opportunities despite trying times. They are typically being led by entrepreneurs that have built financial fortitude during the recent crisis.

“There is the full kaleidoscope of bosses out there at the moment,” Durkan says. “An awful lot are thinking about what comes next: how can they add to their top line, where can they expand or increase market share? They are the positive ones.

“Then there's a number of businesses just hanging in there. We know they are sitting and waiting for the government support to be withdrawn and when it is, they are going to exit from that business, in whatever form that may take.

“Those in the middle are trying to reshape their business and understand what this new version of the world looks like. Some are coping better than others. Those that are struggling we are encouraging to access advice now and make use of programmes like Building financial fortitude to get the support they need. Our aim is to help as many businesses as possible go from being a casualty of the pandemic to being another positive turnaround story. 

Durkan, who has years of experience working in distressed situations and turnarounds, says bosses that have found some strength in adversity and got to grips with their financial challenges will only succeed by looking after their teams and not just themselves.

“You can have all the strength in the numbers that you want but if your people are falling apart, that's not going to lead to long-term improvement. Fortitude is not just about the strength of one - it's the strength of everyone.”

Decisions over people are at the heart of how businesses will cope when the furlough scheme tapers off and various loans amounting to tens of billions of pounds start to be repaid. The government jobs programme, which has helped to pay the wages of millions of workers whose roles might otherwise have disappeared, will require employers to chip in 10% for hours not worked from July and then 20% until the scheme ends in September.

“We know there are many businesses that have weathered the storm very well but there's an awful lot that are clinging onto the lifeline of the remaining support,” says Durkan. “Suddenly you’re going to have a significant cost coming back into the business. Do you still need that level of resource? Are you going to need to restructure your workforce? Because that comes at a cost itself.”

Durkan explained that the Building financial fortitude programme will be looking at these issues in more detail and are partnering with an organisation called the Gro Group to delve a little deeper into the challenges of managing people in distressed situations. 

“Our partnership with the Gro Group launches in June and aims to bring together our combined expertise in helping businesses manage the financial, operational and people related issues when leaders face tough decisions.”

Some sectors are bouncing back better than others. Those that are open for business are likely to benefit from an early splurge as consumers spend some of their lockdown savings. They include car showrooms, which reopened in England and Wales on April 12, but not aviation, as international travel plans have been shrouded in uncertainty for longer.

Durkan is cautious about whether the sharp rise in High Street activity can herald a sustained revival for the beleaguered retail sector, where debts are mounting, and landlords are frustrated by poor rental income.

“People have been sat at home for months and they're out there now because they've had nowhere else to go,” she says. “I think a lot of that short-term boost has been because people just wanted somewhere to go, some freedom. We’ve seen two stronger quarters of sales data, but I would caution against seeing that uptick as being mistaken for a sustainable recovery.”

Similarly, in manufacturing, Durkan has seen orders coming back at some of the businesses she advises “but it doesn't look like there's a huge backlog of demand as clients slowly turned the tap on”.

Another factor that will affect business performance in the second half of this year is Brexit, whose impact on the supply chain is still being playing out. Ongoing problems could hit cross-border trading. Meanwhile, deals activity has rebounded sharply, reports Durkan, while there are signs that restructuring work is coming back too, driven by lenders and forward-looking bosses who spotted distress early and reviewed their options.

“We are currently advising a range of businesses across pretty much every industry sector. Some are looking to sell but want to be sure it is the right time to do so. Some of the owners I speak to are concerned about the leakage of value out of their business, but some are also at the point where they realise, they have no choice but to make a move now. Their concern is that potentially in 12 months’ time, the numbers could be worse than they are right now.”

On the flipside, Durkan is talking to some very acquisitive firms, “looking to capitalise on any potential opportunity they can” and believes a very interesting few months lie ahead, powered by those that are prepared for it and by the lingering possibility of changes to the tax system, particularly CGT.

After a quiet first six months in 2020, Quantuma has seen a surge in deal activity, driven in part by the anticipated changes to capital gains tax, which of course didn’t materialise, and led by private equity investments. In the weeks leading up to the Budget announcement in March the firm’s Corporate Finance practice advised on eight transactions in just two weeks, at a combined value of over £130m. Durkan adds “Our Corporate Finance team have been incredibly busy recently and looking forward the team expects deal activity will continue to grow up leading up to the next Budget statement.”

James Ashton, JournalistAbout James Ashton

We’ve partnered with James Ashton, financial journalist, writer, speaker and thought leader, to provide you with thought-provoking insights. James was previously City Editor at The Sunday Times and Executive Editor at the Evening Standard, to name but a few of his prestigious roles. He has had a ‘front-row’ seat at many of the biggest economic and corporate stories of recent times and writes regularly for several national newspapers, including the Sunday Telegraph, The Times, and the Mail on Sunday. 

Building financial fortitude: support for advisers and businesses

To survive and thrive, businesses need to be resilient and robust. As a highly experienced business-advisory firm, Quantuma talks to hundreds of businesses daily and understands they need support to tackle issues proactively and move beyond the challenges. That’s why they created Building financial fortitude, a programme designed to provide information, insight and support on the key issues businesses and professional advisers are facing now and will need to tackle in the future. You can look at what’s coming up in our programme in our short video.


This article constitutes general advice and should not be acted upon without taking specific advice.  Neither the authors nor Quantuma Advisory Limited accept responsibility for any actions based upon this general advice