Delphine Paterson

With over 20 years experience in banking Delphine is a Fellow Chartered Certified Accountant and an Associate of the Chartered Institute of Bankers. She is an experienced banker having worked both regionally and in the City where she headed a team of Corporate Analysts, evaluating client risk, allocating credit grades and appraising covenants.

Experience spans start-ups through to large corporates where she was the lead Bank Analyst for the likes of Land Trillium/Land Securities Group and Ferrovial/BAA.

Delphine has considerable experience as a lending decision maker within bank central lending units, sanctioning requests and setting pricing and terms.  She has also directly relationship managed her own client portfolios giving her first-hand knowledge of the banking products available to meet their operational needs.

Raising £2M for strategic growth

One of our commercial clients wished to raise £2M debt to achieve both strategic growth and move premises. Since the deal involved a complex property purchase with a development phase and multiple companies, the loan did not typically match the High Street bank lending criteria.

Solution

Simmons Gainsford Financial Investigations, through their finance specialist Delphine Paterson, who has worked with/within financial institutions for over 20 years, were able to structure the deal and effectively communicate the needs/risk/rewards through a comprehensive information pack distributed to targeted financiers. Delphine then liaised further to match the deal to the best lender in terms of term, structure and pricing.

Outcome

Notwithstanding its complexity, the deal was ultimately financed at extremely competitive High Street rates with the client also benefiting from extensive time and effort saved as Simmons Gainsford Financial Investigations managed the deal through to conclusion.

Acquisition valuation in financial services

One of our clients within the financial services sector was considering the acquisition of a non-standard business “group”. For our client to have a good foundation for the negotiations, we carried out a valuation of the group.

Challenges

The main challenge faced in the valuation was the business group’s complex structure, which included companies and partnerships with different members, significant minority stakes, cross-holdings and complex remuneration agreements. Some of the LLPs were technically not part of the group but were included in the intended acquisition.

Solution

Due to the complex business structure and the significant trading activity between the entities, the Simmons Gainsford Financial Investigations team were required to perform a detailed elimination exercise in order to arrive at the right underlying numbers. When doing the valuation, the team from Simmons Gainsford Financial Investigations had to balance historic performance with future expectations. This involved building a detailed cashflow forecast model. The valuation methodology included use of comparable recent transactions as well as looking at relevant sector multiples, both historic and forward-looking.

Outcome

This elaborate valuation was then used as the basis for negotiations of the transaction, with the cashflow providing a focus of attention.

Director’s conduct – Fraud investigation

A non-resident shareholder of an hotel instructed Simmons Gainsford Financial Investigations to review the conduct of the sole UK director who had recently been dismissed from his position.

Challenges

Doing the review the team from Simmons Gainsford Financial Investigations had to deal with the poor records maintained by the former director. By using the director’s own explanations against him it was established that he had benefited from pay rises exceeding the maximum allowed under his employment contract.

Outcome

With the help of these findings the shareholder significantly strengthened his position in the director’s redundancy negotiations.

Falsification of Statutory Accounts

Former employees of a listed company, which provided finance to importers, complained to the Police that the majority shareholder was falsifying the published accounts. This potential fraud would be of major disadvantage to the banks providing the finance and to the minority shareholders.

Challenges

A secondee from Simmons Gainsford Financial Investigations was assigned by the DTI to investigate the alleged fraud. When starting the investigation, the team was confronted with directors who were engaged in systematic deception and fraud. It was established that the reported turnover did not agree to the bank records and explanations put forward by the company for this discrepancy were discredited.

Outcome

Following the DTI report, the case was referred to the Serious Fraud Office and the company’s Stock Exchange listing was suspended. The secondee gave evidence in Crown Court in the subsequent criminal proceedings. The two directors got custodial sentences along with confiscation orders amounting to £24 million.

Financial Modelling

Despite running in-house accounting software, our clients found that this did not provide adequate analysis of their business and scenariobased forecasting. As a result, they had insufficient “value adding” data on which to base strategic decisions; lenders were unsupportive as they had no clarity in terms of the cash flow/profitability going forward.

Challenges

No divisional breakdowns of data existed; frequent transfers were made between entities and there were no inhouse budgets. We therefore needed to take a step back to ensure that the core data was reliable before moving forward with our forecasting.

Outcome

We took on an interim FD role working closely with the business to remedy core data defects and to set divisional budgets ahead of building a bespoke in-house forecasting system. This split out relevant divisions and switched forecasts to actual data in real time. The model incorporated an integrated Profit and Loss, Balance Sheet and Cash Flow and included debt and trading scenarios, trend analysis, covenants, graphs and ratios. It rolled forward with ease and became the company’s key decision-making and
reporting tool.

Purchase of a maintenance company

One of our clients requested Simmons Gainsford Financial Investigations to assist them in purchasing a maintenance company.

Challenges

The Simmons Gainsford Financial Investigations team were required to provide an initial valuation of the Maintenance Company as well as subsequent advisory work (including Due Diligence) to help keep the negotiations on track.

The financial Due Diligence identified another company owned by the vendors in the same line of business. Reviewing the accounts provided by the company identified accounting policies which distorted the reported figures (such as including production labour costs below Gross Profit and using dividends to remunerate the directors/shareholders). The quality of the ongoing contracts, including the spread of the client base, the profit margins being obtained and the retention rates, were also examined.

Outcome

In the commercial negotiations these issues were addressed and resolved and the additional company identified was included in the acquisition at no extra cost.

Valuation for divorce proceedings

Our client, a director of a substantial trading business with significant operational properties required Simmons Gainsford Financial Investigations to value the company in a contentious divorce. The business was the primary asset in the divorce.

Challenges

Simmons Gainsford Financial Investigations team had to consider the valuation of the company as a going concern and compare that with the value of the sites on both a break-up basis and as a real estate play. We also reviewed the valuations provided by the other party and presented our findings in an expert witness format tailored to be of maximum assistance to the judge and to present scenarios which reflected the post-divorce position of both parties.

Outcome

Our work enabled a balanced view to be obtained of our client’s business and personal wealth which was reflected in the settlement. The Simmons Gainsford group was also able to offer advice on the best method of restructuring our client’s holdings post-divorce.