“Fish where the fishes are” is a favoured business mantra of Ian Newey, sales director of timber door and window maker West Port. It’s guided a significant strategic shift in the company’s product mix in recent years.
Other joinery businesses have also adapted to changing market consumption and trading patterns. Of course they’ve also had to contend with rampant energy inflation and the consequent cost of living crisis, plus fluctuating raw materials costs and availability. But despite this, those we spoke to, including West Port, Archwood Group and Gowercroft Joinery, look to have evolved successfully – as witnessed by continuing new product development and major capital investment programmes. Overall their outlook for the sector is positive, with the hole left in the market by JELD-WEN’s 2022 decision to close its Melton Mowbray window and door plants, and regulatory development, with the introduction of Fire and Building Safety Acts, seen as providing added opportunity.
Archwood, comprising Richard Burbidge and Masons Timber Products brands, plus flooring producer Atkinson & Kirby, reports sales down in volume over the last year, but flat in value thanks to price inflation.
“DIY sales have fallen in value and volume as the pandemic home improvement boom has worked its way out of the system,” said managing director Josh Burbidge. “It produced a massive increase in sales of Burbidge exterior products as consumers renovated outdoor spaces, but that fell sharply last year and hasn’t returned. Our RMI business via trade merchants is going through changing times too, with the shift from bricks and mortar to online retail. Some merchants are ahead of the game in developing their websites to win a slice of the online pie, but with bricks and mortar outlet business down, sales overall are static. It’s an existential challenge for this sector.”
However, in new build, where Archwood is primarily exposed to medium-sized and regional housebuilders undertaking executive home type developments and extensions, the business has picked up market share, partly due to JELD-WEN’s factory closures.
“This part of construction also seems to have held up relatively well,” said Mr Burbidge.
Another joinery supplier reported the same experience.
“Our small to medium sized house and extension builder customers report they’re busy as ever,” they said.
High end door and window producer Gowercroft, meanwhile, reports strong trading over the last year, with high enquiry levels and commercial projects particularly buoyant.
“There was a noticeable drop in sales to the domestic market last autumn, which seemed to have been caused by a general uncertainty regarding the economy, although that appears to have eased now,” said managing director Andrew Madge.
He agrees that, while starts in the largescale developer new build sector may have weakened, the higher end new build and selfbuild markets Gowercroft serves have been more resilient.
“But generally the driver for our business is the RMI side,” he said. “And as our projects tend to be top end, customers have not been as affected by the cost of living crisis.”
Back to West Port and Mr Newey’s fishing analogy, 18 months ago he undertook an analysis of the private domestic window market against the backdrop of anticipated declines in the wider economy and consequently, after the pandemic home improvement surge, in consumer confidence.
“We predicted domestic business would suffer,” he said. “So we focused production more on areas with a greater certainty; social housing, public sector and commercial projects. We’re still doing some private residential windows but it’s really diminishing now, while we’re seeing strong sales into education and commercial – for instance, we’re working on a massive new retail centre with timber sliding sashes throughout.”
The other strategic change has been to fundamentally alter the balance of window versus fire door production.
“Four years ago 10-20% of production was in fire doors. Now we’re at 65-70%,” said Mr Newey. “At the same time, we’re still maintaining windows volumes. This is additional business.”
Part of the thinking was that the fire door market was characterised by long-term contracts, notably with local authorities. “This guaranteed workflow helps you develop your vision for the business and make decisions about investment and production. It also helps drive efficiency.”
As expected, this move has also left West Port well-placed to service surging demand for fire doors following the Grenfell disaster, the subsequent inquiry and the Fire and Building Safety Acts that resulted.
“Now full details of regulatory changes are known and the construction and property sectors are starting to understand what’s expected of them, demand is increasing even faster,” said Mr Newey.
Of course, joinery businesses have, like all manufacturers, had to contend with soaring energy costs following Russia’s invasion of Ukraine, but companies have adopted strategies to minimise passing on increases to customers.
When Archwood came to rebroke its energy supply contract in 2022, it was quoted a six-fold price increase. “But we didn’t fix at that price. Instead we went into a consortium of businesses which enables us to buy energy flexibly and evens out increases,” said Mr Burbidge. “Cost rises we have passed on were largely related to timber prices and shipping costs and these have now softened and we haven’t imposed any further increases since January. For the longer term, we’ve also undertaken major investment in solar panels.”
West Port acknowledged it had to pass on a proportion of ‘mammoth’ energy price increases, but has introduced a vigorous ‘war on waste’ to cut its electricity bill.
Mr Madge took another perspective on the effect of energy inflation. “With the general move towards sustainability it’s made our [energy efficient] products more attractive to customers,” he said. “This is particularly true of our Heritage range, which meets planning requirements for listed properties and conservation area homes, while significantly improving thermal performance.”
Companies also had strategies to minimise the impact of timber price volatility and shortages.
“We’ve been in a relatively good position as we buy from source, taking full truck loads on a very frequent basis and long term agreements, so when timber inflation kicked off suppliers couldn’t immediately impose an increase,” said Mr Newey. “We eventually did have to pass rises on, but there was actually little customer resistance – they recognised it was the market situation.”
West Port’s war on waste also helped, with optimising processing technology ensuring that no more than 3-4cm is left over from any length of timber entering the factory.
Archwood also buys on long-term contracts, which helped insulate it from increases to an extent and smoothed them.
“When timber prices then reduced generally, some customers expected ours to come down as much as commodity wood prices, but we pointed out they never went as high,” said Josh Burbidge, who also believes there may be more price negotiation ahead. “Hardwood may be stable, but the mood music is for further softwood price hardening.”
As for prospects for the rest of 2023, Archwood expects to hit its budget target of 3% turnover growth to its September year end.
“We’re in our second year of trading in the black after five difficult years,” said Mr Burbidge. “We’ve reset our business, are well-placed to invest and add value and we see good opportunities for growth and to win market share through serving customers slightly differently.”
West Port is also upbeat for 2023 – its 25th anniversary year.
“We’re in a stronger position than we were this time last year and 2022 was one of our strongest years ever,” said Mr Newey.
With UK economic projections now less dire, Gowercroft is in positive mood too. “Our turnover has increased 150% since 2019 and we aim to continue this growth trajectory over the next three years,” said Mr Madge.
New products are seen as further underpinning business development. Gowercroft, for instance, is seeing the first projects coming through the factory for its new Frontier range of windows and doors, which are billed as delivering ‘exceptional thermal and acoustic performance, whilst maintaining a traditional British aesthetic’.
“We are also launching a new contemporary front door, which we think will be a game-changer in terms of flexibility of design, functionality, and thermal performance,” said Mr Madge.
New from Richard Burbidge are inset glass panels for its Elements Collection of oak or pine stair rails, plus Re-Newel customisable cladding kits for easily modernising old turned newels.
“These come in pine or oak veneer with a very stable poplar backing,” said Mr Burbidge, adding that Archwood has a programme of further product launches to its year end.
West Port sees further opportunity for developing its fire door capabilities. “There are new opportunities all the time, and we’re in an ever stronger position to respond,” said Mr Newey. “For instance, we’ve just been asked to produce an anti-ligature, antibarricade design for psychiatric and other secure facilities.”
As stated, there’s also a lot happening at these businesses in that other indicator of positivity, investment. Besides its £750,000 spend on solar panels, Archwood is mid implementation of a new £300,000-plus enterprise resource planning software system and is spending £150,000 on projects to cut energy use. It’s also looking at a machinery spending programme.
Gowercroft spent a further £350,000 in 2022 on front-end machinery capacity to enable it to cope with “increased order volumes and further rapid growth in coming years”.
Meanwhile West Port is set to install a bespoke new German-made production line, giving it potential to double fire door capacity.
GOWERCROFT GROWS PARTNERSHIP PROGRAMME
Timber window and door manufacturer Gowercroft Joinery is doubling the number of dealers in its exclusive partnership scheme. Longer term it is looking to grow the network further still.
The company, which is just marking its quarter century anniversary, set up the scheme in 2022 and currently has 10 partner dealers.
“Partners have exclusive rights to supply our timber windows and doors in their geographic area,” said Peter Buckley, Gowercroft partnerships manager. “They are also backed by the benefits of our customer relationship management and quoting systems, product training, plus extensive technical resources and support.”
“They vary from small husband and wife timber-only outfits, to large businesses with multiple showrooms and smaller manufacturers looking to improve their margins by buying in base products and manufacturing supplemental parts,” added managing director Andrew Madge.
He explained that every partner is required to have their own showroom. They undertake all sales and marketing, as well as surveying, order confirmation, and installation aspects of the business.
“The Gowercroft role is purely as a manufacturer and we give them access to an online system, where they can produce real-time quotes for clients based on their chosen gross margin,” said Mr Madge.
Mr Buckley said the package of support represents a “fantastic opportunity” for startups, as well as established manufacturers and installation companies wanting to upscale and differentiate themselves from local competitors through offering Gowercroft’s “innovative and award-winning range”.
The company described the results of the scheme to date as “fantastic”.
“Some partners have added as much as £500,000 to their turnover,” said Mr Buckley.
“Our quoting software allows them to price customer projects remotely and guarantees a specific product margin to suit their business.”
The company is launching phase two of the scheme at the FIT windows and door show at the NEC in May. It plans to appoint a further 10 partners – companies that “are ready for the next stage of their growth”.
“The eventual aim is to have 30 partners spread throughout the UK,” said Mr Madge.
“We already have quite a wide geographic spread, from Devon to the Lake District, and are now looking to fill the gaps between existing dealers to have full coverage, while also expanding into Scotland, Wales and potentially further afield.”
Rick Wallis of Southfield Windows, a supplier of high end PVC-u and aluminium windows, described becoming Gowercroft partner for south-west England as “an excellent business decision”.
“It has enabled us to extend our product range and reach new customers,” he said.
“The addition of high-end timber windows and doors to our product portfolio has added significant value to our business and opens up new margin opportunities.”
