Short term we haven’t seen any change in the market, but I do have some significant long term concerns.
I believe that the EU will make it difficult for us to disentangle ourselves from the single market and I am not sure that we will be able to get what we want from the negotiations.
In the meantime, whilst the political negotiations are in progress, we won’t be able to negotiate potentially beneficial deals with other countries. The whole process will probably have an impact on our manufacturing.
In the long term, I’m sure that this can be recovered, but it will take time.
Where we have seen an immediate impact is on the 30% or so of our staff that are EU citizens. They are valuable members of our team, and we have had to work to address the psychological impact of the result. We’re doing everything we can to reassure them that they will be able to continue to work in the UK as part of this company.
Q. How are changes in the sterling exchange rate affecting the business?
We deal with most of our suppliers and customers in dollars so we haven’t seen any price fluctuations as a result of the slide in sterling. Our books are in sterling, though, so the exchange rate has helped our current year financials. The majority of our business is here in the UK – so customers selling their end product in sterling will have experienced an effect on margin, which they may or may not have been able to pass on to their customers.
Q. Which are the most active market sectors for your business right now?
Energy is the strongest sector for us at the moment. There is huge demand for displays and associated technology in the smart meter market. This will be buoyant for three to five years as the European roll-out happens. It is a very good opportunity and gives us space to build up other markets.
A number of other markets are also showing growth, which is slightly slower but more likely to be long term and sustained.
The industrial HMI (human to machine interface) market is strong both in growth and our customer base, there is growing interest in more sophisticated touch screen user interfaces for consumer electrical goods like drink dispensing/vending machines.
The medical sector is also good, with growing investment in products for personal and home/remote diagnosis. The challenge in this market is the very long design cycles. Medical projects typically take twice as long as industrial/consumer designs to complete the journey from concept to end customer.
Q. How has the way you address the market and customer base changed in the last there years, if at all?
There is much more competition now especially with Chinese players moving into the European market.
We have responded to this by playing to our technical strengths, and taking a much more consultative approach. We have invested in building a strong engineering team who can work with customers to create the right display solution and, if necessary, help them integrate it into an embedded platform. In addition, we look for electronic engineering qualifications in our internal and external customer facing teams so that they can engage customers at the right level.
Q. Do all distributors need to have a strong internet business these days?
You need to be online but not necessarily deal online. The amount of information available on the Internet has grown hugely, and customers do 50-75% of their research online before they engage with you.
It is crucial that you optimise your website from an SEO perspective, so that customers get to the information that they want within 3-4 clicks.
For example, our company website now has features like a information centre and an online library that customers can browse freely. We monitor parameters like bounce rate on our website as closely as our business performance – because we know that today’s web traffic is tomorrow’s business.
Q. If there was one recent business development in your company you would like to highlight what would it be?
We have got a lot smarter about the whole social media piece. In this way, we’re successfully engaging with the next generation of engineers – without losing touch with existing customers who want a more traditional approach. Younger engineers are used to a very different way of interacting, making peer-peer recommendations online. Our social media reaction is technically qualified and bespoke – a central part of our consultancy approach to the market, offering data in real-time.