A well-respected audio company based in the North East has told how it had to institute a redundancy programme as the effects of the coronavirus pandemic hit sales.
Canford Audio, which is based in Washington, has released accounts for the year ending October 31 2020 which show that its revenues fell nearly 20% to £14.1m. Over the same period, operating profit went down from £1.1m to £702,000.
Canford manufactures and distributes professional audio equipment and has sites in Dorset, France and Dubai, as well as its North East base.
In the accounts, chairman John Francis outlines how sales were ahead of budget until the third week of March 2020 but then fell sharply. The company used the Government’s furlough scheme and also instituted a redundancy programme. The board of directors also reduced their salaries.
Mr Francis said: “Cash flow was adverse as working capital settled down to a lower level of regular business, and it took a little while to reduce the value of inventories by well over £500,000 - so the group took out a Government guaranteed bank loan of £600,000. At the date of approving these accounts, that loan has been repaid in full, and the group is meeting all its financial obligations.
“We were able to maintain continuous service to our customers, thus building on the excellent relations with our customer base that have been developed over many years. The sales team (largely working from their homes) developed new methodologies during this period, responding more proactively to customers’ enquiries, and broadening the range of active customers.
“As a result of all these measures, the group continued to make trading profits in every quarter of 2020 and this is continuing in 2021.
“As sales began to recover, we reduced dependence on the Coronavirus Job Retention Scheme, leaving it altogether by the end of May 2021. We intend to strengthen the sales team to build on their excellent work over the past year.”
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Canford said it had continued to expand and develop its fibre termination facilities to meet increasing customer demand. Its production workspace has been significantly enlarged, together with recruitment and training of additional staff.
The accounts also outline how the process of transferring the company’s ownership to an employee ownership trust had been completed last April.
Canford also told how it had benefited from an order for seveal hundred NEAL interview recorders to a Government department, having been boosted by their appearance on TV series such as Line of Duty and Vera.
Founder and CEO Iain Elliott and CEO said: “Canford has plenty of expertise in exporting, with almost 40% of its revenue derived from international sales. The company was as ‘prepared’ for Brexit as it was possible to be.
“Significant efforts were made to ensure that EU customers understood Canford would be continuing business as usual for them. Very significantly, this included setting up systems to clear EU customs in France, so purchases would be ‘internal’ in the single market, and not an import to the EU. This eliminates paperwork and other hassles, identified as being the biggest risk to customer retention.
“Having a long-established subsidiary company in France proved extremely useful in enabling customs clearance of shipments.
“The final extent to which European sales will be impacted by Brexit (as distinct from the pandemic) will not be known for some while, although no downturn has been seen since the exit. Brexit has brought additional costs but no benefit whatsoever to the business; remaining in the single market would have been a far better option.”