We have worked closely with Eric Wright Group (“EWG”) for several years, ever since we established Dow Schofield Watts Business Planning (formerly named JL Advisory).  Our team provides ad hoc support on EWG’s PPP and PFI portfolio, including raising finance for new development schemes and advising on potential structuring issues and how to respond to them.

As part of our engagement we work closely with the funders of EWG’s existing PPP and PFI schemes.  This involves updating the operational financial models quarterly for each scheme to accurately report on financial performance.   We initially built the suite of operational models several years ago in response to the requests of the funders for more detailed information in accordance with the signed facilities agreements for each of the schemes.

The models were originally based on financial close information and allow easy reporting of performance against key debt covenants, most notably the Annual Debt Service Cover Ratio and Loan Life Cover Ratio.   They also report the shareholder IRR and highlight any upcoming potential issues where cashflow starts to get close to minimum covenant levels.

All models have been through the audit process without any material changes being required.

The operational models are now updated for actual performance each quarter and have been specifically designed to allow easy update from the output of EWG’s financial systems.  Due to the timescale required for reporting (within 30 calendar days from the end of the quarter) and the number of schemes we are reporting on (14 individual companies), this ease of use has been critical to allow us to hit deadlines each time.

The models are provided to funders with compliance certificates to provide further evidence to the funders that the schemes are operating within acceptable parameters and the directors are not aware of any issues which may impact this.

Our mandate with EWG is one of our longest running engagements, and we have been able to enjoy a great close working relationship with the financial and commercial teams there.