16 October 2020

Tailored cash management solution helps Marlowe unlock efficiency

Reconciling its decentralised model of operating with optimising cash management was proving frustrating for Marlowe Plc. A cash concentration structure with reverse sweeping from HSBC proved just the solution the company needed to boost efficiency and support its quest for new opportunities.

Background

Established in 2015, Marlowe Plc is the UK leader in specialist services which assure safety and regulatory compliance, whilst managing risk for businesses across the country. The Group has grown both organically and through acquisition to record turnover of over £185m in the financial year 2020.

With around 2,500 staff located across the UK, Marlowe delivers services to some 20% of the country’s commercial premises. Clients range from manufacturers to leisure facilities, retailers to the NHS and from SMEs to FTSE 100 companies.

The challenge

With the company keen to continue its acquisition strategy, having an immediate and comprehensive overview of its daily cash position was essential. “It’s fair to say that managing cash across the different businesses that make up the Group wasn’t particularly efficient,” says Matthew Allen, Company Secretary and Group Financial Controller at Marlowe Plc.

“Making best use of the cash available and having a good understanding of our cash position at any given time was important, not just from a cash management perspective, but also to enable us to move quickly if and when we identify further opportunities.”

The company’s rapid growth and numerous acquisitions had created a legacy of systems and controls that meant monitoring and controlling cash in the business was labour intensive, time-consuming, and potentially inconsistent. There was also increased sensitivity around requests for both information and transfer requests from the individual businesses. As such, Marlowe was keen to maintain its decentralised model, whereby each business within the Group retains its autonomy and has access to its own balances, but at the same time, the company wanted to increase visibility and ensure its cash was working as hard as possible.

The solution HSBC proposed responded to our needs and the unique circumstances we operate in.

Matthew Allen, Company Secretary and Group Financial Controller at Marlowe Plc

The solutions

HSBC’s cash management team, led by Senior Cash Management Consultant, Courtney Schofield, worked closely with Matthew and his colleagues to understand the issues they were keen to resolve, what they wanted to achieve and the effect of the underlying structure of the business.

“The solution HSBC proposed responded to our needs and the unique circumstances we operate in,” says Matthew. “It offered us the potential to consolidate our cash positions across the business, allowing us to maximise returns on our available funds, but it also would ensure the local teams retained cash control.”

The degree of understanding of both the drivers of the business as well as the internal landscape developed by HSBC was such that Marlowe used the collateral the Bank provided to sell the new solution to internal stakeholders.

“Getting buy-in from the different businesses within the Group was vital to the success of the solution,” says Courtney. “Using a UK Domestic Cash Concentration structure meant that Marlowe would have visibility and control of its cash at a group level. Combining that with reverse sweeping provided comfort to the individual businesses that their autonomy was being respected and that they would still have access to their own cash balances the following day.”

The process

In order to ensure buy-in and test the new structure against the business’ needs, the implementation was planned across four phases, allowing the process to be tweaked and adapted to deliver a solution that worked on both a group and individual business level.

“Phase one began in May 2019 and involved 20 separate accounts forming a domestic end of day zero balancing and next day reverse sweeping cash concentration structure,” explains Courtney. “Over the following weeks we refined and tested that solution to ensure it achieved the client’s priorities, and finalised the structure in March 2020.”

Matthew was impressed with how smoothly the implementation went, with any issues resolved quickly and the implementation team keeping Marlowe well-informed at all times. “The structure is already providing a number of benefits,” says Matthew. “Our ability to mobilise cash more effectively has reduced our dependency on our debt facility and enabled us to pay down debt more quickly. We’re also operating far more efficiently. The automation of processes has allowed us to free up staff time to focus on new opportunities.”

Marlowe has found that the cost of the new structure pays for itself, both in terms of interest savings and cash optimisation across the business.

“The solution that HSBC came up with meets our cash management requirements and has helped to make our processes leaner and more effective,” says Matthew. “It has successfully navigated the various concerns about loss of control from the different businesses within the Group and has provided management with the overall control and visibility we need to help support our strategic plans for the future.”

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