Brexit, Buying and the (Not So) Great British Pound
Brexit – this single word despised or celebrated - has dominated our news for some time. It elicits vastly differing accounts of impact and consequence to the British people, our economy, our lifestyles and, for this article, business, both national and international. Whilst many of the outcomes remain uncertain, one indisputable fact of Brexit is abundantly clear. The impact of Brexit on our currency has not been positive.
The whys and wherefores, the bookies' error and the political can kicking and the long-term effects can be debated at length but as the chart above clearly demonstrates, following the vote the Pound is now worth considerably less against the Euro and the Dollar (and basket of other currencies)
So what? You might say it is just an impact on our holiday or that one deals solely in Pounds or that your market is solely in the UK. All true but the impact remains significant for British business as our buying power, on the continent (and further afield) has been greatly reduced. Even if you only sell in the UK and only deal in pounds this can still effect you.
We, at Glassworks Hounsell, are manufacturing exporters of extreme environment equipment are embracing, even selfishly welcoming the weakening of the currency as our products are now cheaper against our European counterparts. This should give us British manufacturers a boost both in revenue and margin - but let's also look at this other way. For those British companies that source from abroad (often in euro) and sell these services or parts into the UK, in pounds, the impact is considerable. These companies can often have agreed contracts to supply for a long period of time even at fixed prices and without a currency hedge then these arrangements and their margins are now being severely squeezed.
As we all know profitability is key to business survival and that profitability is not just about price but a combination of cost, revenue, quality, and delivery, so today, following Brexit and the impact on the pound, many of us are having to take a long hard look at our profitability.
Glassworks Hounsell's history dates back to 1887 - we are Midlands-based precision engineers operating in special purpose equipment in a multitude of sectors but we are also an ever-expanding sub-contract machining and fabrication service with a range of in house facilities. We have built our company on traditional values operating in the modern world. We believe in quality, we believe in on time delivery, we believe in relationships. This has allowed us to evolve with own suppliers and our customers to build relationships that can find ways balance or even optimise the impact of massive macro-economic events.
So, if you are a company looking to reduce the squeeze on your own profit margins and / or are looking to source back in the UK then look no further. If, on the flipside, you are a British company looking for to source a British supplier to help maximise the macro-economic increase to your margins of your European or International Sales then do contact us - please look at our website www.glassworkshounsell.co.uk, see our facilities and get in touch to discover how we can help you achieve your goal and above all begin that relationship and longevity to bridge such future events and volatility.