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THE CURRENT CLIMATE

30th July 2009, Page 42
30th July 2009
Page 42
Page 43
Page 42, 30th July 2009 — THE CURRENT CLIMATE
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Which of the following most accurately describes the problem?

Manufacturing in the UK has been declining for decades. Office for National Statistics figures show production in the UK fell 31% in 2008 compared to 2007. For Flegg Transport, the real fallout came in the first three months of this year. After a £2m turnover in 2007, turnover dropped to £1.8m in 2008 before rising again to £1.84m in 2009.

"In the first six months of last year, our top 15 customers provided 85% of our turnover," says managing director Jayson Flegg. And in the past six months, they were 37% of turnover. "They are not selling, there is no finance available and people are jittery. We reported the same turnover as the previous year, mainly through repossession work, finance houses and consolidation work, where they might have three sites, sell the one that makes the most money and shift into two sites and downsize and keep themselves going," he explains.

The downturn from September 2008 kicked in after three-month lead times were reached and breached in December. "As work started peteting out from December, machine manufacturers had stock in the factory because companies had gone bankrupt. There were machines they couldn't get rid of because they were tailored to a specific need."

At the beginning of the year, installing work was minimal, but repossession work started to rise. When people stoPped paying their finance, there would be a legal wrangle and then certificates [repossession orders] were issUecl and we repossessed equipment. We brought it ba k to our place and stared it," he says.

his opened a door for Flegg Transport as finance ho ses looked for the cheapest way to remove and store repossessed equipment. 'Finance companies are nu ber-crunchers. They look on the sales receipt, see it's a eidelberg printing machine, call them and get a quote to r move it. They would charge top money and transport to rullit out, its costs a fortune.

e don't do sales, just the installation, so we will do the re oval and do the strip and bring it back here. We aren't interested in sales so we don't want commissions, all we want is the transport and storage, and finance houses realise more money out of their assets because there are no percentages on top or subcontractors.

"They use an auction house to sell it from here, and we ge a double bite of the cherry. When it's sold, we give a price to the customer who bought it and install it again. It's

technically better money than when you are putting them in new," he says.

In Flegg's office, a whiteboard contains a list of more than 17 companies providing leads from the internet asking for quotes. "It's all fresh work. We have just completed a job for Hampton Aerospace, which came through the internet. It was a £200,000 contract for a company we have not worked for before," he says.

He and operations director Mark Marshall have had to develop a sales pitch, something neither have had to do in the past. "We have had to learn about what we have to do to get work. "The economic downturn has taught us how to take the company forward. When we come out the other side we are going to expand immensely. We have so many leads for new business that we ended up taking because machine manufacturers aren't selling anything.

"When the recession eases, we probably aren't going to be able to cope the way we are. We will need a couple more trucks to meet the demand," he says.


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