We work with companies of all sizes across a range of sectors in considering the financing implications of various business strategies and objectives, including growth, business capacity, merger and acquisitions, regulatory implications and new initiatives/special projects and bids. This involves a detailed dialogue with senior management in order to understand the reasoning behind the strategy and the outcomes sought in following them. We frequently take this understanding forward through financial modelling in order to develop a clear framework for comparison of different inputs, assumptions and scenarios and in order to consider different financing options to underpin the strategy.
We offer clients a rigorous test of their plans within a qualitative and quantitative framework, as well as a practical and innovative approach in seeking to deliver them from a financing perspective.
Capital Structure Optimisation & Strategy
In any competitive or resource constrained business environment, options around capital structure and strategy will be a key element in supporting objectives around capacity maximisation, shareholder return and cost of capital. Fundamental to this is refining the balance between debt and equity in order to minimise the organisation’s cost of capital while also risk adjusting to allow for the risks potentially associated with higher levels of leverage. While this balance will initially be considered internally by an organisation, there is often an assessment required in terms of the potential impact upon the perception and outcomes of other stakeholders in terms of credit rating, cost of debt and any regulatory oversight where this is relevant. Balancing these various stakeholders and related issues requires a practical approach as well as a quantitative one and we are able to work with our clients to assess the various issues at play in arriving at the optimal position.
In addition, we work with a number of clients from the non-profit distributing and project finance sectors where the issues are quite different from those considered by corporates, either because they don’t have equity within their capital structure or because they are financed entirely or almost entirely by different forms of debt. Nonetheless, the same issues will frequently arise in assessing the optimal use of capital and corporate structure, frequently relating to the balance between regulated and non-regulated activities and the balance of risks between the two. Again, the interplay between the organisation or its equity sponsors, its funders and where relevant its regulator require a practical approach in balancing the various interests.
Centrus can assist its clients in assessing various structures and options in terms of financial modelling, risk management, funding options and the impact on cost of funds and business growth/capacity and risk. Our approach ensures that clients have a clear and transparent comparison framework in order to support effective governance and decision making.