Peter Walshe – AFEX Tony Grimshaw – What More UK
Business faces volatility on a daily basis. But over this last 12-14 months, we’ve had it from every angle, globally, nationally and internationally. It’s been quite an addition to our ‘volatility bank’.
In March last year, we faced a deluge of cancelled orders from retailers and that trigged a requirement to furlough a lot of our staff. At the time we had 250 members of staff and we began the process of putting them into furlough.
Within two weeks, the orders had re-materialised because retailers realised it was not going to be as bad as they first thought, so we had to reverse that process and bring people back into the business.
We’ve coped with Covid well, mainly because we’d made a massive investment in new equipment which came to fruition just as Covid hit. As the pandemic hit our business rose.
Over the last 12 months plastic, which is our raw material, has not far short of doubled in price. We also make bakeware and we’ve seen significant increases in metal prices.
The last year has been an education, even for people that have been in business a long time and hopefully we’ve all learned a lot from it. You have got to take the positives from it and it’s how we have reacted to the problems and weathered the storm.
You build up a crisis/volatility bank and that knowledge goes into it. Hopefully it never gets used and is locked away, but if it is needed it is there.
We’re service based so we’ve felt things differently to many of the businesses we work with, because they were physically being disrupted by the pandemic and shut down.
We just wanted to make sure we were completely available without any dramas. Initially it was hard to get hold of people as they were transitioning to working from home.
Peter Walshe
One of the biggest challenges was you couldn’t predict how long the lockdown was going to continue and we were just helping our clients adjust to market conditions and volatility in currencies day by day.
A lot of clients were waiting to fulfil orders. Some orders hadn’t left Europe, China or wherever they were importing from and we had importers that didn’t have the need for the US dollars they had already reserved with us.
Fortunately, most of our clients adapted quickly, which is testament to some of the businesses that are out there, especially in the North West, and how agile they are. They have been trying different things, whether that is moving their business online or getting involved with supplying PPE.
Many of our clients have made fundamental changes to their businesses and we’re proud to be helping them see what those changes mean. Sometimes, you’re like a sounding board—some of our clients just want a chat or to test out new ideas on us, and it’s a pleasure to be a part of that.
Tony Grimshaw
We continued conducting business whilst offering clients support. That was needed more than anything, especially at the beginning as much of our business comes through referrals and networks. Our relationships with our clients go beyond just buyer and seller, and deepened over the course of the year.
Peter Slater – CMAC Group Normally we thrive on volatility because that’s what our business is built around.
However, it’s usually short-term volatility: if you’re a business and you’ve a problem with your building, we evacuate you, moving people quickly; if you break down at the side of the road, we move you. If you’re not going on a flight because of a technical or weather-related issue, or if the overhead railway wires are down, we get involved.
Unfortunately for us, the volatility Covid brought has led to an extended period where a lot of clients have effectively gone into hibernation and don’t necessarily need our services at all.
We’ve lost around 30-40 per cent of our normal revenue, but in terms of profitability it’s much higher because the emergency recovery reactive work that we do represents a higher margin.
It’s probably been the most extreme stress test of CMAC’s underlying ability to have a business without any emergencies to respond to. That’s something we always try to plan for. It’s difficult based on what we do, but this year has proved we can do it.
The business did recover to some degree, albeit in a different way. We were busy in other areas. We’re so grateful for the investments we made last year, before the pandemic, things like moving all our operating systems to the cloud. We are recovering but we need airlines to get back in the air.
Peter Slater
Sometimes you have to make really tough decisions quickly but it’s about not necessarily making them too quickly. You’ve got to assess the implications of the decisions you make.
LANCASHIREBUSINESSVIEW.CO.UK
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