The downturn — an economic review

Are you still suffering?

An economic review, November 2009

 

The BBC recently reported that the UK is still officially in recession. The most recent set of results was slightly against the grain of expectations – France and Germany came out of recession 6 months ago and the UK was expected to follow suit for the latest quarter. Instead the economy as a whole fell a further 0.4% between July and September. It has now contracted 5.9% from its peak before the recession began.

The US economy grew at an annual pace of 3.5% between July and September, its first expansion in more than a year, official data has shown. Good news for our sister company, based in Canada and the US.

Whilst there has been much talk of green shoots and lights at the ends of tunnels, whether or not you or your business are personally suffering the effects of the downturn is very much an individual thing. Whilst many are in the doldrums or worse, some companies in even the hardest hit sectors are capitalising on their competitors’ woes and doing comparatively well. A small number are actually experiencing boom times.

We know from our own experience that the number of appointments is the highest we’ve seen for some time. This is an early measure of interest, a long way from invoice-able orders and actual turnover, but still very encouraging.

Merchant doldrums

Closer to home in the merchant sector Wolseley have posted a huge £766M loss, admittedly mostly explained by restructuring costs and write downs. At Travis Perkins revenue fell 13 per cent to £1.454 bn year-on-year and pre-tax profit plummeted 27.4 per cent to £90.4m. This news was greeted by a rise in share price, the markets relieved that things weren’t worse in the current market.

In the second tranche of suppliers, those in the top tier but outside the mega-corporations, many merchants are showing considerable agility dealing with the difficult trading conditions.

Elliott Brothers has opened a new Romsey branch, in their Hampshire heartland. The new premises opened in early October and doubled the size of their previous branch. Elliott, a 170-user bisTrack site, use the software to closely monitor and control the business across their 10 branch network.

Pontrilas Timber and Builders Merchants, a £26M company in Herefordshire has ambitious expansion plans, supported by their new bank Lloyds TSB with total banking facilities of £8.3M. It’s not often you hear a company openly praising their bankers, but Pontrilas and Lloyds TSB are busy building bonds for the future: ‘We spend time with the directors of the business and get to know it, and understand what their aspirations are for the business’, said Lloyds TSB’s Andy Connors. [Update: Pontrilas and Lloyds story in the TTJ]

Over in South Yorkshire Arnold Laver Timber World are exploiting bisTrack Smart Views to do more than ever with the valuable data buried within their IT. John Worsnop, Laver's group auditor, says it takes less than half the time to complete monthly system audits using smart views: "Previously I had to export information into Excel, filter it, and end up with a list of numbers which had to be copied and pasted back into the system," he said. "Using a smart view I can now see the information I need after just one click.

"I use around 20 smart views regularly for high and low margin reports, negative stock items, products without a cost, and so on. A further benefit is that the information you are seeing in the smart view is live." bisTrack's intelligence toolkit measures the KPIs important to a company, with a live rolling snapshot of data within the system.

The Unimer clearing house reported a tough year, with the volume of transactions down but an increase in their market share. In the year to 2009 they processed £793M worth of invoices (down 13.6% on the previous year). One significant bonus for members is the guaranteed payments, given the fragile credit insurance situation.

The construction sector

Glenigan reports that high vacancies and continuing downward pressure on rentals has led to continued problems in the commercial sector (down 43% year on year). The beacons of hope in construction are education, driven by the 'Building Schools for the Future' initiative, up 3%; Amenity and Community, up 8%; and Social Housing, up 1%. They give a continuing weak forecast, with ongoing reliance on the public and social sector.

The CPA (Construction Products Association) is downbeat foreseeing a delayed recovery in 2011, with the return to 2007 activity levels taking as long as 10 years.

Back on the nation’s favourite dinner party topic of house prices, they continue to rise gradually – the Land Registry gave a 0.9% in September 2009. According to recent figures from HM Revenue & Customs, sales rose to 82,000 in September, double the number sold in January.

"Lending activity has recovered in recent months, when compared to the start of the year, as buyers and sellers tentatively return to the market," said Adrian Coles, of the Building Societies Association (BSA).

"However, lending is still at levels much below that of previous years, and the slight recovery remains fragile," he warned.

On the high street

Whilst many consumers have concentrated on paying down debt, with lower mortgage repayments leaving some with some disposable earnings, there are come signs of optimism on the high street. The latest GfK NOP poll reports that UK consumer confidence rose to the highest in 21 months in October as Britons said they are more likely to make big purchases.

The report shows “a steady, if cautious, uplift in British confidence in our economic situation,” said Rachel Joy, an analyst at GfK. “Consumers are still wary of the future and so the overall trend towards uplift is still fragile.”

Overall then, a mix of good news and bad news. Where you fall on the spectrum seems to depend very much on individual circumstances and how well-prepared you are for the upturn when it comes.

 

Links

http://news.bbc.co.uk/1/hi/business/8331271.stm
http://news.bbc.co.uk/1/hi/business/8321970.stm
http://www.bloomberg.com/apps/news...
http://www.gfknop.com/pressinfo/releases...
http://www.businessweekly.co.uk/2009080335305...
http://www.birminghampost.net/birmingham...

 

Testimonials

  • "The reporting capabilities of bisTrack really help the sales department answer day to day enquiries. It gives them instant access to information about purchasing volumes and when timber is due to come in."

    Wayne Abrams, Project Leader, Arbor Forest Products

  • "The decision to go with bisTrack was based on the relationship we were developing with the Progressive team, a confidence in deliverability and their aggressive approach to overall cost."

    Stephen Mulhall, FD, McMahon

  • “Hargeaves are ideally placed to take advantage of the offer – whilst we plan to continue using e-Xact to update our product file we also want much better control over special product sales and purchases."

    Gordon Rothwell, James Hargreaves MD

  • "Our computer system impacts on every aspect of the business. Buying, selling, importing, transport planning, as well as accounts. If you install the wrong software, without the right level of performance or functionality, it will cause significant problems throughout your business."

  • "Our relationship with PSI has been transformed this year. This is due almost entirely to having an Account Manager as a single point of contact, who knows our system and our business."

    Eric Jones, IT Manager, Alsford Timber

  • "We looked at several systems, but most of them were using the same out-of-date technology as the system we were replacing!"

    Rodney Scoles, Director, T Brewer & Co

  • "We were drowning in paper and, as a business turning over £2.2 million, the time had come for us to invest in business management software."

    David Biddle, MD, Huntingdon Timber & Roofing

  • "At Complete we have a responsibility to the environment. That’s why we’re trying to lower our Carbon Footprint. We introduced e-commerce cut down on paper receipts & are introducing electronic billing through bisTrack for customers."

    Richard Moody, Director, Complete Building Materials

  • "There’s no doubt that bisTrack is a good tool. We’ve a fantastic record for growth and we’re getting a lot out of bisTrack now, particularly over the control of our business."

    Mike MacLellan, MD, GPH Builders Merchant

  • "There’s no doubt that bisTrack is a good tool. We’ve a fantastic record for growth and we’re getting a lot out of bisTrack now, particularly over the control of our business."

    Mike MacLellan, MD, GPH Builders Merchant

  • "We saw benefits straight away, particularly with the time we saved on monthly stock takes and sourcing information for management reports."

    Nigel Williams, Chairman, Premier Forest Products

  • "I was working with 2.7 in our test environment and looking at all the work you have done. Just wanted to let you know how much we appreciate all you do to make this a great technology partnership."

    Brian King, Lumber USA

  • "With bisTrack we now have real-time information on our profitability, which allows us to continually optimise and make decisions on our business plan."

    Stuart Hall, General Manager, Lawcris Panel Products

  • "Good customer service is easier to achieve with good IT systems to back up our staff. Progressive provides us with an efficient system for dealing with customers, and good management tools to enable us to concentrate our efforts in the right direction."

    David Dunmow, Group Finance Director, James Latham plc

  • "Performance across the system is continuously enhanced too. Since our last release, finding products is now significantly faster ...by up to 30%."

    Gary Brookshaw, Product Director, Progressive Solutions

  • "Our computer system impacts on every aspect of the business. Buying, selling, importing, transport planning, as well as accounts. If you install the wrong software, without the right level of performance or functionality, it will cause significant problems throughout your business."

  • "The decision to go with bisTrack was based on the relationship we were developing with the Progressive team, a confidence in deliverability and their aggressive approach to overall cost."

    Stephen Mulhall, FD, McMahon

  • "To stand out from the crowd, you need great customer service. Really great customer service."

    Progressive Solutions' guest blog, Builders Merchants Journal

  • "It's a very nicely laid out system with easy to follow structural menus and taskpads which, even if I haven't used a particular function before, I find relatively simple to complete."

    Chris Pratt, Pratts Timber and Builders Merchants Ltd

  • "We chose bisTrack because we needed to move on to the next generation of software."

    Stephen Fairbairn, MD, Henry Alty

  • "bisTrack is an excellent piece of software and getting better. Their approach to meeting our needs is excellent. eBusiness is not going to be big for another 12 months but PSI are there already, which means we’re ahead. They're very open to ideas and keep getting better at turnaround."

    Adam Myers, Beesley & Fildes

  • "bisTrack was a big investment for us but it's the best change we've ever made. We've grown so much over the last four or five years, we simply couldn't have carried on using a manual system."

    Gerwyn Thomas, partner, TL Thomas (builders' merchant)

  • "Once we started building up information we could trust, we started seeing real benefits. If stock accuracy was the main benefit, then quality of management information was next."

    Peter Kerr, FD, Palmer Timber

  • "We helped ourselves by getting bisTrack on board quickly and painlessly while business was slow, so we won't have disruption as we start to implement a very aggressive three year strategic plan."

    Neil Fuller, Managing Director, Alsford Timber

  • "At Complete we have a responsibility to the environment. That’s why we’re trying to lower our Carbon Footprint. We introduced e-commerce cut down on paper receipts & are introducing electronic billing through bisTrack for customers."

    Richard Moody, Director, Complete Building Materials

  • "The people at Progressive Solutions are likeable, straight_

    talking individuals who have a

    commitment to continuously develop and push the software forward."

    Joe Tipper, Walter Tippers Ltd

bistrack Customer Portal | Progressive Solutions UK

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