Coronavirus - How we are today, and what does the future hold

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We are now approaching four weeks since the start of our return to sites following Lockdown. It was very slow at the beginning, but some momentum has picked up in the past week or so and we now have approaching half of our 300 strong workforce off furlough and back at work. We are anticipating that we will continue to see a further very gradual increase in the number returning to sites in the coming weeks. The remainder will continue on furlough for as long as the scheme continues and/or until such time as it becomes clear that we have reached a point when there is no prospect of any further opening up of work supportive of a full-scale return.
Working as subcontractors to the major volume housebuilders means that the scope of the works we are tasked with undertaking at the moment is quite understandably strictly limited, for the most part we are being restricted to working on houses part constructed and nearing completion for which there is a reasonable prospect of a sale in the near future. Until such time as there is a return of confidence in the housing market, that situation is unlikely to change. Our current view, unless there is a dramatic and unexpected change on the part of clients, is that as a result turnover for the remainder of this year is going to take a significant hit with the consequence that we will be unable to retain all of our current workforce, we will sadly be faced with making a number of positions redundant, how many is, at this stage, impossible to predict.
The limits placed on the works released combined with the restrictions imposed to maintain Social Distancing due to the Covid-19 pandemic, has had a fairly dramatic effect on productivity, both on site and in terms of transporting labour to and from sites. Output per individual is significantly down from the levels experienced immediately prior to the shut-down. Having said that, observing the restrictions has not proved to be as difficult as many had predicted, gladly we have not seen any further public backlash, as was the case at the beginning of Lockdown when some sites remained operational, and no adverse publicity, around Social Distancing. We are very pleased with the way the sites are set up now, our housebuilder clients have introduced many new control measures to help protect everyone on site from the risk of contracting the Coronavirus. The new control measures have made it relatively easy for workers to comply with social distancing, and in addition, extra hygiene measures have been put in place to further limit the risk of spreading the virus. We feel better protected now, and the site operatives seem to be buying into the new way of working without too many issues. We are providing extra PPE for our workforce, including face masks, safety glasses or full-face shields and extra gloves, to be worn for extra protection when the tasks that we carry out make social distancing difficult to achieve, so that the tasks can be completed as safely as possible.
One major obstacle that we are now trying to overcome in terms of further increasing the numbers returning to site is the question of transport and the maintenance of social distancing. We are trying to come up with ways of transporting more than 2 workers in a van, the current limit, this is essential to avoid an unsustainable increase in costs, it was this that was one of the major hurdles that stopped us working when the social distancing rule was first introduced back in March. We are currently experimenting with clear plastic screens fitted in the vans between occupants. If this trial proves successful and we are able to get up to 4 operatives in a van, once the screens are in place, we will roll it out across our entire van fleet. This is critical if we are to see anywhere close to our full complement of workers returning to sites, without incurring significant extra transport costs.
Work on the main infrastructure elements of our jobs remains suspended for the most part, it is this that generates the major part of our turnover and is consequently responsible for almost all of our profit. The remainder of this year we believe will very much be one of consolidation and keeping a strict eye on costs. We have taken steps to reduce our costs, as best we can, our employees have all agreed to take a temporary 10% pay reduction, once off furlough and for as long as this situation continues, but that alone will not be sufficient to maintain profitability. Reduced productivity combined with strict limits on the type of work being carried out, mostly the labour intensive finishing works, inevitably means that generating any profit for the remainder of this year is highly unlikely. A break-even year would be a good outcome. The expected reduction in turnover, consequent upon a smaller workforce and strict limits being placed on the type of work we can carry out will also bring about a need to reduce overhead costs, we are taking a number of steps to bring this about including job sharing, reduced working hours for some roles, redeployment of staff to sites and any other measures necessary to reduce overhead costs to a sustainable level.
2020 will be a difficult year, of that there is no doubt, but with good management and careful cost control we will see it through and emerge in a strong position to re-build the business to its former standing during 2021 and beyond.

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