Davis Langdon and G&T among companies adopting tough measures to boost balance sheets
Partners in consultants including Davis Langdon have stopped drawing cash out of the business in a bid to bolster balance sheets.
The news comes as further evidence emerges of the effect the downturn is having on consultants. Rider Levett Bucknall, which is a limited liability company, is considering a rights issue and salary cuts as a “worst-case scenario” measure to raise money, while Arup is preparing to make up to 400 of its UK staff redundant. Arcadis AYH has also entered a consultation to cut up to 99 jobs.
Rob Smith, senior partner at DL, said: “We are stopping drawing out money. Who can tell what the banks are going to say to businesses in terms of availability of finance?”
He denied he was asking partners to put cash in to the business, but added that the firm was still looking for acquisitions. “We want to strengthen our balance sheet because there could be opportunities for investment and it’s unlikely the banks will stump up the money.”
We are stopping drawing out money. It’s an appropriate thing for us to be doing
Rob Smith, Davis Langdon
Gardiner & Theobald is understood to be following suit. A consultant at the firm said: “We are slowing down the drawings so that money can be kept in the firm.” He added that salary cuts had not been ruled out.
Meanwhile, Rider Levett Bucknall has put together a contingency plan, which includes raising cash through a rights issue as well as salary cuts.
Phil Higham, regional director, said: “We have discussed our disaster plan and clearly salary reductions are one aspect of that, so are redundancies, so are closing offices. But we have no plans to implement these – it is worst-case scenario stuff.”