Renegade Conservatory Guy

Cycle India 2008

It’s going to be a different start to 2008 for me.

Normally, I’m chomping at the bit to get back to work after a slow period of trading in the double glazing business, followed by the festivities of Christmas and the New Year.

However, when everyone else is going back to work, I’ll be joining 29 others on a flight to Hyderabad to take part in Cycle India. For those of you who know me, you’ll be aware that being the organiser of the event, and as the Head of Fundraising at Heal, the planning of this has been a major part of my life for the last 12 months.

The image above shows a recent meeting between myself, Dr Prasad (the founder of Heal) and Barry Dunlop one of three sponsors of the event. The picture shows us launching the Cycle India T-Shirts which has made me realise how close we are now to finally flying out.

To summarise our plans:

I have managed to convince 21 people from the UK to get fit, raise some serious cash and fly out to India to take part in a 200 mile charity bike ride through the countryside of Andhra Pradesh. We are being joined by 8 non cyclists (including my wife) and 2 guys from the US who are joining the ride. To make it truly international we have 10 local Indian cyclists taking part.

We fly to Hyderabad on January 2nd and then there is a gruelling schedule which includes covering much of the state of Andhra Pradesh, a relaxing boat trip on the Godavari River, followed by 4 days cycling along the coastal area of Andhra Pradesh from Rajahmundry to Guntur. The highlight of the event will be the finale at the Heal Children’s Village where we will spend nearly 2 days with the children. And then we fly back to the UK on January 11th.

Heal is a UK registered charity which raises money for helping orphaned and underprivileged children escape from poverty in this region of India. I am passionate about Heal as virtually all the money we raise goes directly to helping these kids, as we have virtually no administration costs and we all divert our time on a voluntary basis.

So far, Cycle India has already raised over £75,000 and we hope the final total will be over £100,000! With this revenue, which is a massive amount for our small charity, we intend to invest in a new project, such as a new school or further Children’s Village.

For more information about Heal, please visit the Heal website.

There are 4 members of Conservatory Outlet taking part in Cycle India, including myself, my wife Ali, Andrew Bean and James Clarkson. I’ll be giving a full account of our experiences of Cycle India when I get back. We’ve got a camera crew taking part and capturing the full event, so I’ll be including a full video diary in future blog posts. We will also be carrying a lot of content on our Conservatory TV website.

I would like to thank Barry Dunlop for his continued support for Heal and for his generous offer to sponsor the shirts - cheers Baz!

If any of you fancy doing a future Cycle India, please get in touch with me. If not, you can still sponsor me on my Just Giving page. Damn, I may have just given away my identity Sam!

Finally, I would like to wish everyone a very happy new year, and I’ll be back online from January 12th, 2008.

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The double glazing industry - my predictions for 2008

For an industry that has been struggling for a number of years, it is hard to believe that 2008 is likely to be a strong year for us all, but there will be opportunities out there for those that differentiate themselves.

I’m really sticking my neck out here, but below are my predictions for 2008. Please feel free to comment if you think I’m way off the mark.

Installers
It’s very tough for smaller installers at the moment. Many of the one man bands are sitting on worryingly low order books at present compared to previous years at this time. I spoke recently with a great guy from Widnes who had orders until April at this point last year. In 2007, in the run up to Christmas, he has a set of French doors to fit.

For installers like this it will be very tough, and I predict many will cease trading in the first month or two of next year. They’ll either go bust, or just pack in and look for work elsewhere. Some will find work with larger installation companies, others will find work in other industries - which will not be a bad thing!

The problem for many of these smaller installers is that they do not know how to adapt to changing market conditions, and scratch their heads when the ads they place in free newspapers no longer stimulate the phone to ring.

Larger regional installers will also have to cut their cloth accordingly. Monthly sales figures are likely to be lower and unless the home improvement market bounces back then they will be forced to look at their overheads, and make cuts. Those companies with a bit of wool on their back will survive, and may be in a strong position should things pick up.

The national installers will similarly have to take a good luck at their businesses over the next 12 month. Safestyle have recently been making major cut backs, and Anglian are diversifying into other home improvement products.

Manufacturers
I feel that there will be a number of the very small manufacturing companies who decide it’s just not profitable to be paying staff and making less than 50 frames per week. There has been a movement in this direction for years and I feel it will continue. Many of these small fabricators will make more profit if they concentrate on selling, rather than manufacturing.

I feel that there will be growth for a number of forward thinking medium sized manufacturing businesses, such as Lister Trade Frames, Glazeright, Direct Trade, and Conservatory Outlet. These companies will develop strong marketing strategies, continue to develop their manufacturing facilities, and benefit from smaller fabricators packing in.

For the larger super fabricators, I predict another tough year. Many of these firms are slow to adapt to changing conditions, and with large overheads they will struggle to make profits in a market place with falling margins.

Hardware companies
With the rebate being removed from Chinese manufacturing businesses and higher raw material prices, I feel it will be difficult for hardware distribution companies to pass on these costs to the manufacturers. Most hardware companies have lost money in 2007, and clearly this cannot continue. 2008 will be a key year for companies like Laird, Mila and Avocet.

It’s a difficult position for hardware companies who are absorbing major cost increases, and trying to pass these costs onto an industry struggling anyway.

Glass Suppliers
The cartel which dictates prices to the glass industry will continue to collude, in my opinion, on pricing despite the recent slap on the wrist from the EU. However, they will likely do it in a more subtle way.

Sealed unit manufacturers
I feel that those manufacturers who invest in toughening plants, and develop solar control units and energy efficient products will do well. Those companies who embrace the Window Energy Ratings movement should succeed, whereas companies who do not adapt will struggle.

Conservatory Roof System Companies
I feel Ultraframe have got their house in order over the last 12 months and will stabilise their market share, if not grow it. With the new management team and a leaner operation they now compete fair and square with other roof systems, and still have the only brand name arguably. Synseal will continue to compete strongly, although I do not believe they will dominate the market like it appeared they would a couple of years ago.

Hopefully, the Burnden Group will see good sales figures next year as it is important to see healthy competition in this sector. I cannot see any of the other roof systems making major headway in 2008.

Profile Companies
The consensus of opinion seems to be that there are too many extruders, and as many of them are experiencing lower sales and losses, we must expect further rationalisation of this sector. Whether fewer extruders in the future is good for the market is matter for debate, but it seems pointless having 14 or so major extruders with most of them struggling.

Opportunities
There are some great opportunities for the market as a whole, many of these are being mentioned regularly in the trade press. My pick of the best opportunities are:

I would have added composite doors to this list, but I would rather wait and see how the Global composite door performs.

After 2008
I feel that next year will be very tough, but the long term can be very healthy if as an industry we embrace opportunities. We need to work hard to educate consumers about the benefits of energy efficient products, high security products, the investment potential of conservatories etc.

If you disagree with my predictions, then please feel free to comment. After all, I just see things from my little part of the marketplace!

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Conservatory prices - why sell cheap?

I found a great conservatory video on YouTube today. I’ll let you watch it first, before I explain why I was disappointed at the end:

The video is clearly a TV ad, and with Charlie Dimmock presenting, it is well produced and most definitely suggests quality. The shots of the conservatory, with an Ultraframe roof, electric roof vents, electric roof blinds, Ultraselect etc give the viewer the impression that Easy Fit Conservatories (formally Tailormade) of Walsall, Leamington Spa and Solihull are a good quality conservatory installation company.

So, why spoil it by suggesting to the viewer that they can buy such a conservatory for £4,999???

To be honest, the usual price of £6,000 is way off the mark. Let me break down how much that conservatory aught to retail for:

Conservatory baseworks (based on 4.5 x 4m which is about the size of the one on the ad) should cost the company about £2,500 (minimum), assuming proper foundations are fitted and good builders used.
The conservatory framework will cost around £1500 to manufacture, bearing in mind there is a complex Sunburst frame which needs sending to a specialist arch company.
Then you’ve got about £400 for the glass for the frames, and sunburst.
The roof would cost in the region of £900, including rainwater goods, Ultraselect, electric roof vents and the gable eavesbeam system to the front.
The conservatory shown has a glass roof which I would estimate would cost the company approximately £700-£800.
Plastering - £250
Electrics - £400
Tiled floor - £500
Bits and bobs - £200 (skirting boards, window sills, lead flashing, silicone sealants etc)
Fitters wages - £600
Commission to salesman - £500

Add it all up and I get the cost of the conservatory to Easy Fit at around £8500. Now, the company also needs to make a profit on the installation, so lets assume they make £2000 (which to be fair is a low margin).

Then, don’t forget the taxman needs his bit. £10,500 + Vat = £12337.50 inc.vat.

This price excludes cost of planning permission and building regulations, which I would guess this one requires as only the front is glazed. This price also excludes the conservatory blinds, furniture and the cost of decorating.

Let’s face it - its not a £5000 conservatory - its a £15,000 conservatory.

Now, I’m not singling out just Easy Fit here. I’m sure Easy Fit are probably a good installer.

The problem is our industry seeks to con the general public into showing interest in ridiculously low prices, and then leave it for under pressure sales people to go in and price build.

“Sorry, Mr & Mrs Bloggs, the conservatory on the advert only includes for a 3×3 Edwardian conservatory, and doesn’t include fitting or any extras.”

The fact is that the average conservatory price is around £10,000 to £12,000 and if you want something a bit more special (like the one on the video) then they cost a bit more.

Why, can’t we compete on quality, service and innovation, and not price.

If not, we’ll continue to mislead the public, and drive down our margins further!

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