KordaMentha and Compass Agribusiness

Overview

KordaMentha and Compass Agribusiness were engaged by a leading Australian funds manager to undertake a diagnostic review of a large horticulture operation currently under management. 

The business has underperformed since acquisition in late 2017. The lender sought to understand the root causes of underperformance. In particular, the client wanted to understand:

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• The key profit driver and causes of poor EBITDA performance
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• If head office and business support costs were to high
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• Whether �best practice� farming methods were being used
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• The growth potential of the business
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• The prospects for the ongoing operation of the banana trading business
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Background

It became apparent in the early stages of the review, many of the questions being asked by board, financier and executive related to the symptoms of more fundamental issues including:

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• An overly complex operating model and organisational structure
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• A cost conscious corporate culture which lead to lack of important fundamental investment into the farming business
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• Lack of a strategic approach to sales and marketing
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• Onerous leases or underutilised leased assets
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• Information systems which lacked integrity and, therefore, a lack in confidence of the data produced.
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Our approach

KordaMentha worked collaboratively with Compass Agribusiness Australia to:

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• Design a more effective, simplified operating model which would allow for better business support resources at farm gate
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• Build a staff establishment and organisational structure from the ground up
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• Highlight key on-farm opportunities which would deliver significant yield uplift
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• Undertake salary benchmarking for all key employees
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• Review and identify risks associated with information systems and sales strategy.
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Outcomes

Working with Compass Agribusiness, KordaMentha were able to provide value add for the client by:

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• Managing brand perception by bringing in specialist agribusiness experience
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• Forming strong and collaborative relationships within the business, both at farm gate and at head office
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• Effectively co-piloting the project to deliver a timely updates and allowing for concurrent business improvement
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• Using complimentary skillsets to provide a top-down, bottom-up and \'whole of organisation\' perspective
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• Bringing extensive agronomic and hands on farming experience; together with, strong commercial, operational and financial expertise. 
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