From a one-man outfit providing kitchen repair services, Swift Catering Equipment has grown into a fully-fledged distributor with design, supply — and more recently manufacturing — capabilities. Catering Insight went to meet the company’s owner and managing director, Bill Munro, to find out why an upturn in business this year has left it confident the market is recovering.
It was back in 1981 that you founded Swift Catering Equipment. What led you to start the business?
I was an engineer and service manager for a company out in Chelmsford at the time and I enjoyed it. One of the directors left and I asked if I could go with him. He said, ‘no, if you want to do something for yourself just start up on your own.’ So I took his advice and started in competition with him and the company that I then worked for.
I am an engineer by trade, so that’s how the business started off — doing servicing work — and then I progressed from servicing to supplying the odd bit of kit. Then I was asked to help out a company that had been dropped in the proverbial. They had the design and I came up with a few ideas about changing it, which they liked, and that’s how we got into the design side as well.
Are you primarily focused on the local Essex area where you are based?
We are mainly regional in as much as we tend to say we serve a 15-mile radius outside of the M25. Based here in Essex, we also go to Suffolk, around Cambridgeshire, and along the M11 corridor. We are branching out, though. We have now taken on Gary Allen, who is over St Albans way, and Graham Smith, who is Croydon-Surbiton way. It gives us a three-pronged attack that means we can cover the London area and the South East.
You have on-site manufacturing and fabrication facility. Where does that fit into the strategy?
We started manufacturing for ourselves five years ago. We were no longer competitive and found that our competitors were manufacturers, so I took a long-term look at it. We started with some second-hand machinery and a few people that were in the know joined us and then it progressed from there. We sank a load of money into the business two or three years ago, bought all new equipment and machinery, and then four months ago the premises next door became available so we bought that, too. So we have doubled in size in every way, shape and form.
How has the business been performing given that the market is still emerging from the recession?
For the last four or five years we have turned over about the same, we are only a small company. But our financial year starts in April and every month since then we have beaten last year’s target. And if you look at the previous six months, and compare it to the year before, they were good as well. So we are seeing the market progressing. On like-for-like sales we are a good 50% to 60% up on this time last year.
Is that down to what you are doing or are market conditions generally getting better?
I think it is a combination of both. We found that through the recession, the bad years, call it what you like, we didn’t dip in sales as such, but we didn’t progress. We just held our own. Other companies have come and gone, and sprung up again, as they do in this industry, but we have just sat there, bided our time, developed things — especially in terms of the manufacturing side — and touch wood I think we have done very well.
What are your plans for the business in 2014?
Increasing the turnover and obviously the profit — that is the main plan, which is why we have doubled in size. The factory we have bought is identical in size to what we had, so we have doubled in size here, which is good because we needed more manufacturing space. There will be a focus on volume and we are looking at contract work — though not the great big contracts because that is not the game we are in.
We’ll look at the areas we have been covering up to now in the South East because that is where we have excelled at in the past and I see no reason for that to diminish. I was looking to increase turnover by 40% to 45% this year, and I would be very happy to hit that. The fact that we are up about 60% on the plan gives us some margin.
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What is your assessment of the market for UK distributors right now? Do you think the industry is growing?
I think the overall market for the distributor and for the manufacturer, which is what I class myself as now, will grow. Things are starting to turn the corner. There was a point when a lot of the bigger players appeared in our market all of a sudden and that put us up against some of the big distributors. The recession had obviously hit them and they came down here, and what they did was reduced the margins. But over the last four or five months we haven’t seen them, they seem to have retreated a little, so I am hoping that the margins and everything else will pick up and things will return to normal — whatever normal is!
So it is still a fragmented market then?
It is fragmented, but we have returned to a point where we are getting a lot of referral work again. We have done some big contracts with Stryker’s headquarters in Newbury and then from that we have just done London Gateway, which is a real feather in our cap. We were also back to doing half a dozen schools over the summer. The previous two years we were down to two or three, and the previous year to that it was four or five, and now we are back to doing six or seven schools, which is what we can handle.
What is the hardest thing about the business?
Probably getting the final decision from the customer. Everybody talks about getting money and getting paid, but I think the challenge is getting the decision made to push the button and go. That has definitely been the hardest thing over the last two or three years. People will see the design and say they want it, but not just yet. Then suddenly, bang, it is a short lead time, which makes it tough. I think people have been lacking confidence.
Do you think suppliers do a good enough job of helping dealers go about their business? Is there anything more you’d like to see from them?
It is difficult to know what the stock levels are and what they are holding as stock. We were let down in the summer when people said they could supply something but didn’t have the stocks in. There is always somebody who has something, but it is annoying when you can’t fit what has been specified or what you have specified. A lot of people are only interested in branded stuff, which is fine, we can give them that, but there is other good stuff out there, too.
‘Our last flat week was back in March’
When Bill Munro decided five years ago that Swift Catering Equipment needed to introduce an in-house fabrication business to its offering, he did so knowing there was an element of risk attached.
But having seen the business priced out of jobs by companies it was essentially sub-contracting fabrication work from, he felt there was a strong enough reason to invest £25,000 in procuring a selection of second-hand manufacturing machinery in order to get the ball rolling.
Like anything, you only get what you pay for, and in those early days he admits that using second-hand machinery didn’t come without its problems. He comments: “It wasn’t perfect and it didn’t produce perfect jobs, shall we say. That’s not to say we didn’t produce the perfect job — we did, but it became labour intensive. Three years ago we took the decision to invest heavily, so we put in another £60,000 or £70,000 to buy all new press brakes and guillotines.”
Since then the operation has gone from strength to strength, so much so that when Munro got the chance to take on the neighbouring property to Swift’s office he grabbed it with both hands. The extra space has allowed it to expand the manufacturing business, ensuring it has the capability to churn out everything from prep tables and serveries to counters and canopies.
Most importantly for Swift, the production floor has found itself inundated with work. “Go and ask the guys out there when was the last time we had a flat week!” says Munro. “We had a flat week in the run-up to Christmas last year, we had a flat week around March and we were probably a bit quiet in May. But since then they are on 60-hour weeks!”
One of the reasons business has been so brisk is that Swift has even taken on work from other suppliers that need jobs doing on their behalf. Its growth has now persuaded Munro to make a third investment in enhancing the operation further. “I am just about to put another £20,000 in to buy a 1500mm plasma cutter to handle big sheets, which is second to none,” he reveals.
Name: Swift Catering Equipment
Address: 10 Braiswick Place, Laindon North Industrial Estate, Basildon, SS15 6EB
Tel: 01268 491579
Focus: Design, installation, supply, fabrication and manufacturing, service and maintenance