May 2008

This month we have had to take stock of our position in terms of the amount of orders we are now handling and the prices we are charging.

Last year we made significant increases in our turnover, and with careful control over our costs and stock levels we even made an increased profit.

This current year we are concerned about the credit availability in the housing market and we are wondering how that will affect us, and you.

We are hoping that there will not be a big correction in the total volume of orders, although we may see a move to more home improvements instead of more new building of houses.

Whatever will happen, we are going to have to increase our floor space in the factory even if the order volume does not increase over the 2007 levels.

Transport is going to be a consideration. Fuel prices have increased as you already know, and it is expected that they will continue to increase. The problem is, by how much? We may have to increase our delivery charges soon. The driver regulations are getting tighter and tighter, the small vans will be having driving time limits imposed on them, and weight limits are going to be monitored more closely. We have been looking at buying a 12 tonne van to be used as a feeder supply to the small vans when delivering in the London - South East areas, with a view to controlling the total drivers' hours, and making our overall haulage more efficient to keep prices down.

The Pound Sterling has suffered on the international exchanges. We had to introduce the exchange rate variation factor in out purchases from Canada last year, but we are now facing a similar problem as the Euro strengthens against the Pound and we are buying more of our materials from European suppliers. We will hold prices as long as possible.

Going back to our workshop space question, we feel that the volume of work and the space needed to supply kitchen doors is not viable and is detrimental to our wardrobe door business so be advised that we will be phasing this side of the product line out in the future. Do not take any significant orders without checking the stock position first.

If anyone is interested in taking over the kitchen door manufacturing we would be happy to talk about it.