While dismayed by the EU vote result Crawford Healthcare's FD says company will exceed revenue of £25M in 2016.
For Spencer Kerry, Finance Director at Crawford Healthcare Brexit seems to be a hurdle that with careful planning, his company can negotiate quite easily.
Crawford Healthcare develop, manufacture and market hi-tech wound care solutions and have recently won the Queen’s Award for Enterprise in International Trade for their success exporting to the EU and US.
As Kerry says, the reliance on people to injure themselves or become ill will mean that the market never really decreases, but with matched University funding now a possibility the worry that R&D might be cut has been absolved by the Chancellor Philip Hammond.
For Kerry, success for the broader economy will depend on how successfully Theresa May and her new government do the following: champion the North, champion innovation and invest in new technology.
“Home grow our talent and keep them here and the possibilities become endless,” says Kerry.
Crawford Healthcare is an international healthcare business specialising in advanced wound care (AWC) and dermatology.
The company is a winner of the Queen’s Award for Enterprise in International Trade, it is the UK’s fastest growing AWC business, with export markets in the US and EU.
With group revenue projected to exceed £25million this year, Crawford Healthcare has enjoyed annual sales growth of 41 per cent over the last three years, thanks largely to its highly innovative wound treatments. In that time it has grown from the 13th largest UK-based AWC business to the fourth.
Crawford Healthcare’s most significant growth driver is in advanced wound care, where they develop, manufacture and market highly innovative wound dressings and treatments.
“We’ve enjoyed rapid growth in a growing global market expected to be worth around US$26billion by 2018,” says Kerry.
EU Vote and Crawford Healthcare’s Export Business
As can be seen, the EU accounts for a relatively small portion of the company’s exports:
- UK revenue = £18.5million
- RoW revenue = £2.0m (2015: £1.1m)
- EU revenue = £864k
On the impact of currency fluctuations, Kerry says moves in the US dollar have the company adversely, “as we are still in net investment mode in the USA, but we enjoy significant overseas sales in Euros and to that extent we enjoy a natural hedge to the pound’s current weakness.”
As of yet, Crawford Healthcare have not altered their product pricing structure in response to the referendum.
Kerry says the company’s export business has increased but this isn’t linked to currency fluctuations or the outcome of the referendum.
“Our long-term strategy remains the same; to continue building a world-class international healthcare business that thrives on the quality of its products and its people. Healthcare is relatively immune to politics and economic downturns, so our target geographies will continue to grow, and we now have a presence in Europe and the rest of the world’s largest markets,” says Kerry.
With regards to shifts in near-term strategy, Kerry says:
“We have an exceptional R&D partnership with the University of Manchester, so initially we had some concerns about funding for research universities and their personnel post-Brexit. However, The Treasury’s decision to match funding suggests we’ll continue to benefit from the brightest minds being here in the UK developing world-leading technologies.”
Response to the EU Referendum Result
“Personally, it was desperately sad that we made the decision to leave the EU, but within the supply of healthcare services and pharmaceuticals, you’re getting pretty close to being isolated from any fallout,” says Kerry.
However, the Finance Director reflects that people today, tomorrow and the day after will have illnesses, be it blood pressure, diabetes, wounds that need healing or skin that needs to be repaired.
And that occurs whether you’re in or out of Europe, in an economic good spell or not.
When asked on what potential restrictions to freedom of movement for European citizens means for their affect your employees base, Kerry responded:
“Our operations in Europe are through a joint venture agreement so we’re expecting to carry on as normal. If we were to have issues further down the line, we’d expect them to be negligible and certainly something which could be planned for.”
Crawford Healthcare’s expansion has been gaining pace for the last three years, and we’re looking to develop a £100million turnover business by 2020.
Brexit hasn’t dampened those spirits and Kerry says the company will look to continue building its presence in Europe, just as much as they have done in the US.
“Being based in Cheshire, at the heart of the Northern Powerhouse, we’re benefitting from a world-class science belt and some fantastic research institutions. With a new Chancellor and lead on the Northern Powerhouse, it’s now time for businesses like ours to beat the drum and champion UK and Northern manufacturing,” says Kerry.
Kerry believes the maintenance of pan-EU regulatory access is key to a successful transition to non-EU membership.
Whether it be harmonised drug approvals through the EMEA or continued recognition of the CE mark, approval for medical devices is essential to the UK life sciences industry’s performance internationally.
Advice for May and her Government
When asked on what the government could do to help the UK economy in the wake of the Brexit vote, Kerry says:
“Continue to back Northern businesses and provide the investment pledged by your predecessors.
“There are so many fantastic examples of Northern businesses creating innovations that appeal to international audiences.
“There’s an opportunity here to create globally significant economic clusters, whether that’s in life sciences, fintech or advanced manufacturing – where we’ve already stolen a march – or in financial services, e-commerce or digital healthcare.
“Let’s ensure we not only foster innovative new technology here in the North but also lead the commercialisation of those innovations and not allow our best ideas and people to ‘leak overseas’.”