The most recent of our Finance Director Virtual Networking sessions took place with five Finance Directors across different sectors, featuring; David White at Aggreko, Kenny Barclay at TBR Global, Mark Ashman at Peak Scientific, Stephen Smith at Arjowiggins and a Director from a large blue chip organisation. The discussion covered both the impact on current operations and also what post lockdown plans were being considered at this time.
There was consensus of opinion that construction sites will open ahead of operations. There is anticipation that production could start again in a couple of weeks, but that there may be more of a stop/start for manufacturing over the next few months depending on orders. New product development has been paused for some but this is allowing for current projects to be completed. For a lot of businesses looking at costs and cost cutting is a fairly new concept.
Some of the businesses featured have used the furlough scheme extensively with up to 95% employees furloughed. Many are keeping a close eye on the job retention scheme and what it will look like from July onwards. New product development paused for some but this allowing for current projects to be completed.
All participants have experienced a reduction on revenue streams across the board, with finance teams increasing focus on bad debt and debt recovery. Finance teams are busy with month end close and having to prepare more regular forecasts and re-forecasts.
Relationships and dealings with Banks crucial with access to support and schemes to help take the business through into next year. There are prudent projections for the remainder of 2020 with expectations of getting back to 50% capacity in Q4. Many are already embarking on new 3-5 year plans for their businesses, and are expecting a V shaped return to demand, rather than U shaped.
There was much discussion around what a return to trade could look like and what level of staffing will be required, and acknowledgement that getting the balance right here is key. All businesses have office staff working effectively from home currently. There was agreement that the return to trade could offer the opportunity to implement process improvements within both operations and finance
Plans for Coming Out of Lockdown
Large Blue Chip Organisation
- Agile working- potentially working from home remainder of the year if possible
- Will be significantly influenced by government guidelines around construction sector
- Staff working an “honesty scheme” to help juggle home life with children and partners’ work load- very much flexible working and goal setting/achievements
- Hot desking will not be possible – it was a key working way of the business prior to COVID 19
- Review and refine capacity requirements for office spaces in central locations
- Having to undertake virtual stock counts or look at delaying stock counts and working back
- Working with alternative three month forecasts
- Potentially tapping into the need for fully cleaned vehicles – corporate clients moving away from public transport
- Large Blue Chip organisations outsourcing to TBR for movement of staff
- Have modified vehicles to help with the movement of staff/patients for the NHS during crisis- protective plastic shielding between driver and passenger/separate air con systems
- Continuing to work remotely
- Utilising continuous improvement leads to work with H&S teams to review processes for remote and office working
- Don’t see the business being back in the office for the next few months
- How to use hot desking/the new health and safety legislation that will be coming into place
- How they are going to support their ops teams
- See manufacturing sector as potential stop/start till vaccine found
- Potential to come back to fulfil orders then return to a remote working phase
- Looking to tweak production to produce face masks as their core product- tracing paper can be used as raw material
- Danger of losing market share if they are not seen to be back in operation – competitors in Italy have been manufacturing throughout the crisis
- Working in a global marketplace, Peak have seen its Chinese business coming back to full operation – this provides some reassurance that the other businesses across the Group will follow in the coming months as government lockdowns are eased and trade begins to pickup
- Potential of splitting finance team in two for phased return to the office – rotating one week in the office/one week remote to enable social distancing
- Seen as an essential business, Peaks manufacturing are operating at c80% capacity. Peak have reduced manufacturing workforce on site to four days, compared to five, to ease the travel burden for operational staff.
- Welfare of staff is paramount, they must be safe!