Case Studies

Energy Saving Trust funded by The Department for Transport
Project: Perform Green Fleet Reviews for multiple clients

The Green Fleet Review is a holistic look at a business from a business mileage perspective. Whilst the focus is on company cars and van fleets, the review also takes into account grey fleet. Given that the reviews are conducted by the Energy Saving Trust it would be reasonable to assume that the focus is solely on carbon emissions. However, this is not the case. The Green Fleet Review also takes into account the cost of business mileage. In short, the Green Fleet Review is a fleet best practice document and even takes fleet safety into consideration. Perran Maven had conducted many Green Fleet Reviews and recommended savings of hundreds of thousands of pounds as well as tons of CO2 emissions.

Manufacturing Fleet (65 vehicles): £66K saving / 48 tonnes CO2 per annum
Distribution Company (77 vehicles): £34K saving / 177 tonnes CO2 per annum
Facilities Management Fleet (22 vehicles): £262K saving / 143 tonnes CO2 per annum

Hitachi Capital Vehicle Solutions
Project: Multiple projects focussed on optimising fleet funding methods

Focussing on Fleet funding in the large corporate sector. With the advent of the provisions within the Finance Bill 2017 there has been much confusion (and controversy!) around the non-standard fleet schemes such as salary sacrifice. Whilst it is clear that salary sacrifice has a limited future sue to Optional Remuneration (OpRa) rules, Employee Car Ownership Schemes (ECO) have not been caught by the new rules (when structured correctly). Dozens of clients requested funding reviews in light of the changes and the core advise now is the for job-need cars a well-structured ECO scheme is probably the most appropriate funding method saving up to 50% over contract hire. A blend of contract hire, ECO, net pay and salary sacrifice schemes should be implemented for cars provided as an employee benefit. In total, the savings noted in recommendations exceed £100m.

UK Corporate Bank - Non-Core Division
Project: To divest a book of c£350m of vehicles held under operating leases with c40 customers.
A condition of the bailout of some of the UK banks was to divest some non-core banking activities such as insurance businesses and vehicle leasing. The real challenge here was that the divestment activities for the vehicle leasing business started comparatively late in the overall divestment programme after a failed attempt to sell the business. The effective "run-down" involved building the team, the processes and all the necessary compliance. Two crucial issues that needed addressing were the key measures by which the approval for divestment would be granted. Namely: clearing a balance sheet position and not relinquishing any intrinsic value in the leases. These were the measures that were to underpin the project. However, a balance sheet position was not held at customer level and a working model for calculating the intrinsic value had to be built due to the highly bespoke nature of the contracts under which the assets were held. It was necessary therefore to build a detailed forecasting model that utilised future probabilities and scenarios in establishing the value of the contracts at term before discounting the values to present values. Having kicked off the project with blanks across all work-streams, the project was closed out slightly ahead of time.

UK Pharmaceutical Business
Project: To determine whether a sale and lease back approach on vehicle, plant and machinery is cost effective
Perran Maven were approached due to the extensive experience in asset finance and vehicle leasing that we could bring to this project. This was a focussed piece of work that was managed formally due to the number of stakeholders involved. The third party funders were deemed to be conflicted in terms of delivering the project for obvious reasons. The internal resource of the businesses was stretched and not experienced in going through lease contracts in detail to model terminal positions. After much liaising with third party suppliers, a recommendation was made to the client, on time and on budget.

UK's Largest Asset Finance Business
Project: To re-engineer the pricing model for wheeled assets
The business historically adopted a return-on-asset (ROA) based pricing model that generated returns on a fixed pound note basis and a margin % return. This favoured assets with a higher capital value and consequently the asset portfolio started to show signs of skew towards higher asset values. The business was keen to create a connection between the pricing model of the business the financial management of the business. The considered alternative was to move to a margin % return only model. However, this would have replaced the issue (favouring high-value assets) with the opposite case where lower value assets would have been underpriced. Paulo lobbied the business Board to implement a hybrid model that centred the asset returns around a marginal market rate. This involved de-coupling the pricing of the business and financial management at asset level and acknowledged the need for cross subsidisation. This was implemented on time and was assessed to deliver over £15m in incremental returns.

UK Lighting Manufacturer
Project: To implement a Y2K compliant business operating platform
The project involved the procurement of entirely new hardware and software infrastructure. The systems were migrated incrementally in line with the end-to-end quote, manufacture, delivery and ultimately cash collection process. A new payroll system was implemented and integrated into the core accounting systems. The key challenge with this delivery is that the systems "sandwiched" the production element of the business that was entirely managed on a hands-on manual basis. The new solution had to address this fact and a stock-control system was embedded in the architecture and managed raw materials through bill of materials management to finished goods. In addition a consignment stock system was implemented, releasing a significant amount of working capital. The project went live with no issues affecting the business operations and was delivered on time and well under budget.

UK's Largest Asset Finance Business
Project: To deliver a Salary Sacrifice product for the delivery of company cars to customer employees
In the vehicle leasing and reward space there are trends that many businesses inevitably have to respond to. Salary Sacrifice on cars was one such trend. As competitors in the market were rolling out propositions, it enabled them to build relationships with the businesses customer portfolio, putting the core leasing proposition under threat. A budget of £600k was assigned for the delivery of the proposition. Although the product was completed, the key challenge in the delivery was compliance with the business reticent to spending large sums of money on professional advice. This was absolutely crucial as historically anything that had been delivered by the business and its competitors outside of vanilla leasing was often found with hindsight to be non-compliant. The Board were lobbied for the appropriate budget in this area and two firms of advisors were appointed to create a professional tension and to ensure that no compliance issues had been missed. In reviewing the offerings from competitors, it was necessary to promote some USPs within the product. Two key differentiators were implemented. On handing over the product to BAU, Paulo highlighted some key deficiencies in the provision of cars under salary sacrifice to the Sales Board. This was necessary due to the need for the Sales team to be fully armed when talking to prospective customers about the product. These issues can be summed up by highlighting the fact that salary sacrifice treats all employees the same - the customer will not credit check employees and typically will not discriminate against employees who are high-risk drivers. From a reward perspective, it could be viewed that employees who are a bad credit risk or a high insurance risk are being unfairly rewarded.

UK Contract Management Business
Project: To evaluate the end-to-end processes of the business with a view to delivering operational efficiencies
Prior to any project work commencing an evaluation exercise was undertaken to map the as-is processes of the business with recommendations for change and implementation to follow. The main activity of the business was managing the chargeable time of contractors. The process was labour intensive and involved time-sheets being emailed, printed and input manually into a payroll system. The accounting postings were manually input into their accounting system from the payroll system. After Board approval, a project was initiated to deliver a technical solution for the business. Using various technologies an improved system was rolled out that scrutinised the relevant email inbox for a template that designated a contractor time sheet. The data was automatically transferred to the payroll system without any human intervention. The payroll system was integrated with their accounts system in a similar way saving the need for manually posting the payroll journals. Delighted client with the delivery on time and on budget.