The impact of Covid-19 on the Central South – Q&A with Paul Hendy, CEO, Hendy Group
Paul Hendy, CEO, Hendy Group
Our latest survey of medium sized businesses in the UK has shown in the Central South that 80% of respondents will need to make job cuts as a result of the end of the furlough scheme but 76% said they had confidence in their business’s resilience over the next 12 months and expect either a six month bounce back in the UK economy (33%) or just a year long recovery (50%). A third also said they had made acquisitions as a result of the pandemic. Is this reflected in what you are seeing in your business and the people you talk to?
Yes is the short answer. Regrettably we will have some jobs cuts and have indeed already had some which is sad but also I think inevitable. I believe business will bounce back in next six months as what we have seen is so extreme, such a unique event in our lifetime. We are seeing a more ‘V’ shaped recovery. Business literally fell off a cliff, we shut in matter of days at the busiest time of year for us. To see it come back as strongly as it has done in Q3 has been amazing. We have come out of it quite quickly. We are having to square the circle as to why we are making job cuts whilst also being acquisitive. We are a healthy business and we went into lockdown as such – yes we have had a body blow, but we know we will come out of it. Hence we are looking at acquiring other businesses as some can’t survive because they were less resilient to start with or have cash flow issues – it’s the law of jungle but we recognise it’s a delicate line to travel. I’m not naïve enough to believe it isn’t going to be difficult going forward.
What has been the biggest learning curve for your business over the last few months?
We’ve learned so much - there was no guide book to dealing with a pandemic! We learned just how resilient we are as a team, just how strong our team ethic was to get through it and how powerful that is and just how committed and prepared people were to fight for the company’s wellbeing which was incredibly humbling and I couldn’t be more proud. Being prepared to make tough decisions, work all hours and put their heart and soul into it. It’s been amazing but it has been challenging.
As business adapts to a new reality what is your biggest concern for the Central South as a region?
This is a difficult question as we are based in a generally pretty affluent area. As a region we are pretty resilient, not immune, far from it, but other regions seem to be hurt far harder by downturns. I’m not saying it won’t be demanding but as a region we are pretty good at getting through the tough times. The big question will be the impact on travel, tourism and hospitality sectors along the south coast.
We have been so busy since we have come back and are now also focused on Q4, looking to maintain and sustain the same level of business but whether that happens or not we don’t know. There is a tendency generally for everyone to talk things down. Let’s talk it up not down. That’s not being ignorant of other industries and sectors who are having a tough time. The end of furlough is going to be another pinch point, but let’s be positive even though we aren’t out of the woods yet.
What are you hoping to see from the government in the coming months in terms of policies and interventions?
It’s more what I’m hoping not to see! Some of the counter measures the government introduced at the outset were amazing, the furlough scheme and business rates relief, boy was that much needed and decisive action. But how it all gets paid for, where that comes from and how quickly they want it back are the big questions. If they start ramping up corporation tax to 5 or 7% or introducing VAT hikes… we’re not out of it yet and let’s hope they don’t stifle any economic momentum that there is. That’s what worries me. I totally understand that the cost of those countermeasures has to be funded from somewhere but given the size and scale of them it might not just be one generation that pays for it, it might be two. It’s a fine line again between keeping some momentum going and not putting the brakes on through measures that will slow it down again. If they can stomach paying it back over a longer period of time then their next measures don’t need to be so severe – 1-2% on corporation tax is a very different number to 7, 8 or 9%. How are they going to pitch it without stopping the economy stone dead?…