Brexit & My Business: "Our experience is of shaken confidence"

Johnsons of Whixley's MD Graham Richardson says the commercial nursery relies on EU agency workers.

by Stephen Jones
Last Updated: 06 Sep 2019
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Innovation

Brexit has had a profound influence on the operations of many British businesses, whether they're stockpiling for the apocalypse or preparing to set sail as a buccaneer in free-trading global waters.

As part of a new series, Management Today is speaking to bosses around the country to find out the impact Brexit's had on them so far, and how they’re preparing for the big day - whenever that may be.  

This week it’s Graham Richardson, MD of Johnsons of Whixley, a commercial nursery business with a predicted 2019 turnover of £14m. The North Yorkshire based firm supplies six million plants and trees annually to organisations including the Olympic and Commonwealth Games, the Department for Transport and the National Trust. 


"The business is facing a number of challenges in the approach to Brexit, not least staffing. Currently, European workers make up around 30 per cent of our agency grade nursery workers, enabling us to scale the labour force up and down in response to economic conditions, seasonality and climate.

"While an exodus of staff is not envisaged, we have engaged the services of a specialist migration lawyer to guide and advise EU workers through the process of applying for settled status and visas.

"Nevertheless, in preparation for having fewer staff on the books, we have made a significant investment of £70,000 in a new production line that reduces the number of workers required for a range of tasks. In addition, further investment is being made in polytunnels to extend the company’s on-site growing capabilities.

"Despite increased production, it will be impossible for us to grow the required capacity and range on-site, because of climactic and economic unpredictability and the variable shelf lives of our 56,000 products. As a result, Johnsons currently supplements its own production from EU sources, as the British have been doing since Roman times.

"In the last 40 years free trade has further improved supply, allowing us to capitalise on the colour, texture and form of thousands of plant variants from rich production centres in Holland, Belgium, Italy and the Mediterranean. 

"Trading limitations will doubtless have both a short and long-term impact on committed prices and, ultimately, supply – representing perhaps the greatest threat to trading in the business’s 100-year history.

"Currency fluctuation has the potential to influence the success of any year, far more than incremental margin gains and losses. Johnsons has adopted a cautious annual headline exchange rate and is looking to make tactical forward currency purchases against a historically based schedule.

"In the event of no deal, the business has taken steps to safeguard as best it can its supply chain and to maintain imports.

"Our current experience is one of shaken confidence – business and the markets don’t react well to uncertainty. Common sense, middle ground and palatable costs are what we seek.

"This lack of certainty is exacerbated by the unstable exchange rate and a new prime minister, casting further doubt on the availability of EU labour – an issue that was almost reconciled under the previous government. 

"International credit insurers are experiencing the aftermath of the lack of confidence in the ‘hardening’ of available credit and that fact that corporate failures are on the increase again." 


Image credit: Johnsons of Whixley

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