One of the longest and most wide-ranging restructurings of a UK timber company has now concluded at Forest Garden.
The company, the UK’s largest timber garden products manufacturer, also revealed that its 2009 financial results are expected to show trading profits of more than £1m, while the Royal Bank of Scotland has renewed and improved its financing support for the group.
Jonathan Halford, Forest Garden executive chairman, told TTJ that it was a “big relief” to have finally completed the restructuring.
Since 2006, when a management buyout team from 3i took over the company, streamlining has left just three of the original seven production sites. The Hartlebury site has also received a multi-million pound investment to become the central manufacturing and distribution hub.
“In its previous form, the business probably could have serviced 200 million customers,” Mr Halford said. “It was absolutely ridiculous. Each site attracted its own overheads and management structure.”
Over the past five years staff numbers have reduced from 900 to about 400, while turnover has fallen 30% to about £48m over the same period, though Mr Halford said the company’s market share had remained constant, with no major customers lost.
“The restructuring has been absolutely critical. If we had not taken all that action, we would have now found ourselves in a pretty difficult position,” he said.
“But it’s been fairly tough to have restructuring in every year since 2006.
“We are cautiously optimistic about the market overall in 2010. We are not expecting it
to be any worse than last year, but equally not expecting it to take off.”
Forest Garden sees growth in tapping trends in the market, such as grow-your-own products (see pp21-22) but core business would remain “tough”. On the costs side, it said timber supply prices had increased 10% in recent months.
