Even the most negative naysayer would have been hard-pressed to predict the scale of the coronavirus crisis that has paused everyday life for much of the planet. So with the UK on lockdown and the foodservice industry in stasis, it has fallen to all businesses in the catering equipment supply chain to try and discern a way ahead.
Small to medium enterprises have had to bear the brunt of the hard stop, and one amongst that number is Ashton-under-Lyne-based installation and servicing firm, FSW Catering Equipment & Gas Services. When the lockdown announcement came on 23 March, the company had around 10 installation projects that it was either about to start or was halfway through, so it had to put them all on hold.
According to MD, Frank Winterbottom: “When we are able to get back, we’ve got work to start straightaway, which is a positive for us.”
The company was forced to furlough its 32 members of staff apart from Winterbottom himself, who is managing emergency installations and repairs for the frontline healthcare sector in the interim, as well as sourcing and supplying personal protective equipment. He is keen to ensure that his employees are kept up to date with FSW’s plans though and therefore sends them a newsletter every week.
He underlined: “Thank you to all our employees for their understanding and their full support surrounding this situation, as without all of them we wouldn’t be where we are now, but more importantly, be able rebuild our business in the future.”
FSW’s customer base comprises large dealerships on the installation side, and direct end user contracts in its service and maintenance division, encompassing independent restaurants, Brazilian restaurant group Fazenda, JW Lees brewery sites, Manchester United Football Club, 267 sites for Oldham schools and council offices, plus 46 Tameside schools and 10 Rochdale schools.
Winterbottom is especially concerned about his independent customers, as many of them also rent equipment from FSW. “When everyone was ordered to close down, our phones didn’t stop and emails kept coming through with cancelled direct debits,” he reported. “Out of 400 independent customers, we now only have about 50 set up on direct debit, so that was a massive hit to the company.”
With the rental income essentially written off for the time being, Winterbottom’s plan is to focus on the installation projects and the large orderbook in the pipeline from its big, direct customers. “We are maintaining contact with them and have an understanding of what their plans are and when they can finally open,” he said.
“Our plan is to open up and bring all our members of staff back, without having to lay anybody off. But because we don’t know how long it’s going to last, we don’t know if we can sustain this for 3, 6 or even 12 months. So it’s about the timing more than anything else.
“Our landlords been very understanding and agreed to reduce the rent on our offices and yard. So as it stands, we don’t have massive outgoings, obviously due to the help from the government. That puts us in a good position and it helps me sleep a little easier at night.”
FSW welcomed the government’s coronavirus job retention scheme, which Winterbottom said “took away some stress”, but was cautious about how long the 80% salary payments would take to filter through. “Nobody deserves to not get paid,” he underlined.
He is also casting his eye over utilising the coronavirus business interruption loan scheme, commenting: “As a business I’ve always shied away from any finance products and it’s come good for me in this situation, because we don’t have a massive amount of outstanding finance that we have to pay. But I have decided that I will look at that funding if we need to go down that road.”
On the hot button topic of payments, he emphasised that while the company is waiting for remuneration off many of its customers, it paid its staff full wages for March and settled invoices with as many suppliers as it possibly could. “I’ve been in touch with every one of our suppliers and I’m giving them updates every few days or weekly,” explained Winterbottom.
“But going forward, we will definitely be looking at our own terms and conditions; we may be doing a lot more pro forma invoicing and reducing our payment terms from 60 or even 90 days in some cases back in line to more like 30 days.”
He reported that FSW’s suppliers have been understanding on that score, saying: “I’m very conscious about the industry cycle and the impact of if everybody doesn’t do what they should be doing and pay. As long as we are all doing what we can and giving a transparent understanding of why, then at least you can stand by your workers. I’m a business owner and I don’t have a board of directors – the buck stops with me.”
Whenever the wheels of the business start turning again, Winterbottom predicted FSW would take at least 3 months to return to normality. “Even with the amount of work planned, I’m not 100% sure whether we are going to be able to bring all of our staff members back straightaway.
“I reckon we are going to see the knock-on effects of this for the next 12-18 months. The industry will get tighter in how it does business. I don’t think that’s a bad thing in some cases, but I think that’s going to make it a lot harder for everyone to get straight back on their feet.”
In the meantime, his advice is: “Sit tight, try to ride out this crisis as much as possible and reduce as many costs as you can to make it easier on yourself. But the most important thing is communication, keeping your suppliers and the people you work with updated on what’s happening in the coming weeks.”
Manchester-based FSW Gas Services has expanded quickly since Frank Winterbottom founded the firm in 2012. When it started, it just consisted of Winterbottom himself providing gas servicing and repair, then supplying reconditioned equipment.
In the first couple of years he focused on the takeaway and independent restaurant market, before large dealers came calling to ask if FSW could install appliances for them and carry out refurbishing and deep cleaning.
But the expansion really accelerated in 2016 when local brewery JW Lees wanted FSW to manage catering equipment service and maintenance at its 230 sites. Plus around the same time, Winterbottom added another division to the company, FSW Ventilations, linking up with ventilation expert Steven Nibley as a partner in that endeavour, to supply, maintain and install kitchen ventilation systems.
Then the third entity which added another string to the group’s bow was Cater Rent UK, a catering equipment rental specialist which Winterbottom runs with another partner, Daniel Knight.
All of these disciplines have grown the company’s fleet to 27 vehicles, starting from small vans for reactive repairs, through to larger vehicles for installation engineers, an 18-tonne wagon for equipment rip-outs and a couple of Luton vans.
Before furloughing, the 32 staff members included eight service engineers, six installation engineers, eight deep clean technicians and the remainder comprising office or warehouse employees.