From Neil McDougall, 31 March 2020
Closing Financial Year 2019/20
In just two weeks, a great deal has changed. We have vacated our offices, moved our working lives into our homes, and managed to bring the 2019/20 financial year to a successful completion. Thank you for your continuing commitment to supporting our customers during what has been a tumultuous period – I recognise that many of us are spinning plates to ensure we successfully deliver both our work and our domestic care responsibilities at the same time. The results for 2019/20 will emerge within the next couple of weeks: I’m really optimistic that they will be a just reflection of all of the work we’ve put in over the past 12 months.
Next Financial Year – A New Destination
It is not often that we have to press ‘reset’ on our plans at a point when we were so close to executing them. But that’s what we need to do, to respond to the changes taking place globally. My first instinct has been to construct a simple plan that will enable us to emerge from FY20/21 intact. I want everyone who is with us at the start of this journey to make it through to the end, having reached a common goal. One Frazer-Nash, all working together, whatever part we have to play. The thinking behind this new objective comes naturally to us, and is based on our fundamental core value: We care.
At the most basic level, we all understand that our business is quite simple: we win and discharge work for our customers. So, in conjunction with the Business Unit Directors, Engineering Managers and Group Business Managers, we have assessed the minimum value of orders we’d need to win in the year, and the amount of fee revenue (GC) we’d need to consume to achieve our common goal. Remember, our customers are still there. They still need us to help them to deliver critical projects for their countries, helping to make lives safe, secure, sustainable and affordable. But with major changes across every aspect of our society, we will need to be more flexible and adaptable to meet the needs of the New Normal. What might that mean?
So, the specifics: I want us to get to the end of March 2021 having won £77 million of orders in the year (our original budget was £101m) and consumed about £82 million of fee revenue. We will quite deliberately eat into our order backlog (we’ll consume more work than we win in the year). The key objective is that, in achieving these two targets, we will be able to reach the end of the year with every single member of staff who is here today still with us. Our profitability during the year will, as ever, be the difference between our revenue and our costs. It will be tighter than normal, but I think we should still be aiming to execute profitable work under our ‘normal’ metrics, to provide some buffer against the ups and downs of the business environment that we may have to manage.
It’s going to be a tough challenge – but that’s what we do, we do things that matter, solving challenges and overcoming problems. Our flexible thinking will help us as we adapt the way we work, again, discarding our previous plan and working together towards new financial goals. We are one Frazer-Nash, and every single one of us will be collaborating to achieve a single, whole Frazer-Nash target.
To meet our goals, we’re going to temporarily shift our focus away from our chosen strategy of diversification, in order to maximise the work we can win this year. This will mean adjusting our approach to the markets, ‘mining’ seams of work where we find them, and using the resources and expertise in Frazer-Nash to unearth, win and deliver all the work that is available. From a business axis perspective, this will require us to blur the boundaries between our sectors, making the best use of all of our wide-ranging expertise and cross-sector contacts. Similarly, in the technical axis we will be asking you to apply your out-of-the-box thinking and flexible skills, to help unearth, bid, win and deliver work that might be outside your ‘normal’ pattern.
We have our map for our journey through 2020/2021, I’m asking every one of you to join this expedition, to use your skills, knowledge and expertise to support your colleagues and our customers through challenging terrain.
Together, we can all reach our destination.