Chairman’s update – March 2021
To all our stakeholders
The Covid-19 pandemic has been an unprecedented and unwelcome event resulting in a year of tumult and turmoil that nobody foresaw. As the effects of the pandemic ran around the world in ever increasing and expanding circles, constricting communities and economies, it has ruined lives and livelihoods and businesses. As of today it has infected over 120 million people and killed over 2.7 million. Countless businesses have gone bust and many tens of thousands of people have lost their jobs. Major airlines have grappled with passenger numbers dropping by over 80% in a matter of weeks and it is estimated it will be several years before numbers return to 2019 levels. As a result it has had an enormous impact on our civil aviation market and resulted in a significant contraction in our sales in that sector of our business. Other parts of the business have nonetheless continued to perform relatively better given the circumstances.
Over the last year we have taken maximum advantage of all the support available from various Governments, including local, national and overseas, to support our global operations while we established the short to medium term outlook for our business. However, as it became clear by last autumn that the impact of the pandemic on the aerospace sector was going to extend beyond 2020, it necessitated a cost cutting exercise unfortunately resulting in a number of redundancies from within our valued team of employees.
Having taken these very difficult but necessary steps I can report that Spectrum has remained on an even keel throughout this challenging period. Our business is ongoing and stable and during the year we scored some significant successes with major orders received from key customers. We have a clear plan and goals for our new product developments, as we look to intensify our diversification into new areas. It will take some time and effort yet to get there but we are making good progress. In the meantime, our #1 priority – cash, has been holding up well over the months. As a result of the lessons learnt from 9/11 we have remained cash positive and debt free and the forecast is that will remain the case going into the future.
When the Coronavirus took off last March, Spectrum Technologies quickly introduced comprehensive procedures to protect our employees and mitigate risks associated to production and product support. The company introduced enhanced employee monitoring and hygiene measures over and above respective Government guidelines for our UK, US and China operations. We have required all employees to work from home from the start of the pandemic, unless required to be in our offices or factory. As a result of these steps our UK, US and China facilities have remained operational throughout the pandemic.
Regarding customer support Spectrum Technologies has been adhering to all UK, US and other relevant government guidelines and restrictions regarding domestic and international travel. Despite the effects of the pandemic on travel we have nevertheless managed to maintain a high level of customer support given our globally dispersed team of field service engineers. In addition, where travel or customer restrictions have prevented on-site visits we have been providing enhanced remote support and assistance for installations, commissioning, upgrades, general troubleshooting and/or technical support via email, telephone, video link and web based diagnostics.
Regarding Spectrum’s supply chain and our production schedules I am pleased to report that the effects of the pandemic on our suppliers have been negligible to date and that we have had only minor issues in maintaining our contracted delivery dates to our customers. Nevertheless we are keeping this issue under regular review.
Recovery from the impact of the pandemic is not a sprint, it is clearly the proverbial marathon, and there is going to be more work required to recover from these Covid generated issues. Nevertheless I believe we are better positioned than many to start on the road to recovery.
We will endeavour to provide further updates as and when there are any significant changes to the situation.
In the meantime I hope that this message finds you and your families safe and well.
Dr Peter Dickinson
Chairman & Managing Director
21 March 2021