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TRADING UPDATE: WHAT A DIFFERENCE A DAY MAKES...

Release Date: 29 February 2016

Trading update: what a difference a day makes...
With global trade and UK exports down notably in Q4 last year, the period proved challenging enough for West Midlands manufacturers without one of the region's biggest employers falling into administration. The knock-on effect was profound, explains David Nicklin...

The last few months of 2015 were short on seasonal cheer for packaging manufacturers with subdued and volatile demand the order of the day and a raft of figures from the likes of the CBI and Markit PMI pointing towards falling world trade and faltering exports. These pressures were particularly keenly felt in the West Midlands in late October when regional steel giant, Caparo industries, became the latest casualty of the UK's declining steel market. In the immediate aftermath, 452 jobs were sadly lost along with four of the company's business units, sending shockwaves through the regional economy. Indeed, the only other occasions where we've seen such a marked and immediate drop-off in demand were around the demise of Rover's famous Longbridge automotive plant and the advent of the global economic crisis. It was a potent reminder of the impact the demise of regional powerhouse employers can have on the wider economy and while it was good to see more redundancies averted, the administration was felt far and wide way beyond the steel sector.

Thankfully the preceding months at Nicklin HQ were categorised by strong growth and by the end of year our half year revenues were still up over 16%, putting us firmly ahead of budget for the financial year. These impressive numbers were achieved on the back of improving margins and our single source supply strategy, which has proven highly popular with both existing and new customers alike, who have been quick to realise the many benefits of dealing direct with a sole suppler who can fulfill multiple packaging needs. Investments in our design capabilities certainly also played their part in this, helping us drove further efficiencies for clients and more repeat business.

There will no doubt be further challenges ahead but at present, the market certainly looks a lot less volatile than it did some months ago. Economic uncertainty is never a good thing so the whole Brexit debate will no doubt continue to play on manufacturer’s minds, especially given the present volatility of the Pound. In the meantime for us, whatever the prevailing economic mood music, it continues to be a case of sticking to our strategy, focussing on customer service and ultimately, moving onwards and upwards...



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