Page 24 - Widthwise Magazine
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Widthwise 2020
24 | Widthwise 2020 | www.imagereports.co.uk
Printers’ Perspectives
Simon McKenzie
Before Covid-19 we had the best start to our finan- cial year (December - March ) that we have ever had, and we were £1m over sales budget in those four months and 3% up on net margin against budget. We were very confident with the strength
of the market, after a small downturn during the Brexit negoti- ations and the general election. We had committed to another £750k in capex on a new print machine and then all things changed in the blink of an eye with the emerging news globally of the pandemic - at which point we had 85 full-time staff and a subcontract labour bill of £ 1.3m annually.
My mid-March all the exhibition and event clients had literally vanished as there were no shows, and our construction and retail business took a massive downturn. At the point of lockdown we had to think hard and fast about what we were going to do, and we had to accept that our core markets and clients were effectively on ice and we didn’t know how long for.
We were fortunate that our supermarket clients were still spending reasonable amounts with us, and they and others in the public sector started to talk to us about PPE and safety screens. At that point the market exploded and the require- ments for sneeze screens and floor vinyls grew exponentially.
It quickly became apparent that the manufacturers of the clear acrylic and floor vinyls couldn’t keep up with the demand of the marketplace. With this in mind we decided to make sure we had the raw materials to be able to supply our clients, and we invested a huge amount of money in acrylic and floor vinyls as it complimented our skillsets in both fabrication and print capability. To give you an idea of how bold this investment was, we basically purchased one year’s worth of stock in one go - a move that proved to be the right one as we were inundated with orders, and from mid-April to today we have worked three shifts, seven days a week.
As of August we still have 40% of our staff on furlough and we will continually monitor this. The reason being that in the ‘normal world’ we would raise around 800 orders a month -
during this period our average order value has tripled, which means that we are only raising approx 250 orders per month and therefore not needing a lot of our staff.
We have made redundancies as we try and navigate our way into the new normal - we are having to be careful and make sure that we are as lean as possible during these turbulent
We benefited form a £300k CBILS loan, but this has to be paid back
times. Events and exhibitions account for around 40% of our turnover, and sport and retail another 40%. With the uncer- tainty of when the events industry will start up again, it is more important than ever that we are not top heavy with staff.
The furlough scheme has worked really well for us, as it allows us to retain the skillsets within our staff, and has cer- tainly reduced the redundancy numbers and helped us greatly with our cashflow as we have a combined wage bill with sub contract labour in excess of £3m.
I do hope that the country, and indeed the world, can come back to some kind of normal soon. However, the timeframe
is unknown. We worry about a second spike - and whilst the government has done a wonderful job with the bail-out, and we benefited form a £300k CBILS loan, this has to be paid back. The knock-on effects of such high gearing and borrowing will lead to a recession. We just need to hope that our economy picks up and we have a V shaped recovery. Unfortunately, I
am of the opinion that many companies across our sector will not survive. I think the market volume will shrink and that inevitably many people will lose their jobs. It will be a case of survival of the fittest.
