Contracts and expansion plans put on hold in wake of UK’s vote to exit the European Union while founder and MD warns all further product launches will no longer take place in UK.
June Medical is a privately owned UK medical device company focused on surgical solutions for improving women’s health.
They source safe and effective products and bring them into the UK, with its main customers including private health organisations and the NHS.
Approximately 75% of the company’s exports go to the EU.
For founder and MD Angela Spang (pictured), her Swedish nationality has never been a barrier to setting up businesses in the UK, indeed, the serial entrepreneur has four to her name and lives in the UK with her Canadian partner and two children, who were both born in the UK.
“We are here thanks to the EU, and my right to live and work here. Since we came, I have started 4 new companies and I employ 12 people. I bring in export revenue to the region, and I have taken on two apprentices, who both will go on to become full time employees and pay tax in the UK,“ says Spang
In terms of strategy, the result of the referendum has been damaging to June Medical’s forecasted growth, which relied on regular, long-term contracts.
“We had to walk away from the negotiations with a new supplier when they changed the deal and demanded a 2-year contract instead of our standard 5 years. Brexit has slowed down our tremendous growth, adding uncertainty of our future ability to supply international customers at the same cost for them as now. We see more cautious negotiations and shorter contracts being suggested from our EU customers,” says Spang.
Contracts aren’t the only thing on hold either.
Expansion Plans and Product Launches Take a Hit
There’s the cost and time associated with gaining European accreditations for their equipment, if Britain leaves EU regulations then the same process will have to be gone through twice.
The company was also looking to expand having started the process of looking at buying a larger venue in order to have all their offices and training venue in the same place.
The investment was to be around £4-5 million.
According to analysts the Bank of England is nervous of this kind of slow-down in investment growth.
"The anticipated weakening of the economy is still expected to be centred on business investment, where the backdrop of elevated economic uncertainty may put capital spending in doubt," says Lloyds Bank in a recent note to their commercial clients.
Data on investment outlays are among the least well measured components of UK economic accounts and the first estimates for Q3 – the first post-referendum quarter – will not become available until after the MPC’s November meeting.
Decisions like those at June Medical could well reflect a shock when these data are made available.
“My plans have definitely changed. I will not be making that investment before our future (both from a personal and professional perspective) has a bit more clarity,” says Spang.
Spang has gone as far to warn that when the company looks to launch its next innovative product, it won’t be done in the UK.
“Not even if we are based here. If the approval process is different from the EU, I won’t put in the time and effort – the UK simply isn’t worth it. It isn’t big enough with 60 million people, it isn’t growing fast enough, and it isn’t accessible enough to make it a target market. And if the approval processes stay the same, then why did we vote Exit in the first place? says Spang.
June Medical will be reducing investment in UK growth and instead increasing it in Ireland and Sweden.
The fall in the value of the British Pound towards 30 year lows against the US Dollar has also had a notable impact on June Medical’s finances.
“Paying our USD invoice from an American supplier the week after the referendum was not one of the most pleasant days in the history of our young company”, says Spang.
Public Regret Brexit Vote
Despite June Medical apparently looking to pullback from UK investment Spang does insist it remains committed to bringing safe and effective treatment options for doctors who work to improve women’s health.
“We will continue to follow all applicable laws and regulations, pre and post Brexit, and will do our best to continue growing our business to help the UK economy flourish, and to help British women live the full life they deserve,” says Spang
As for what advice she would give to Theresa May and the British public, Spang chooses her words carefully:
“I would say, when the winning side has based their claims on outright lies (funding for the NHS, most notably), there should be consequences.
“A second referendum sure looks appetising – I get the sense many people woke up with the feeling they “didn’t actually mean for THAT to happen, they just wanted to make a point”. In addition: since when does it seem like a good idea to go to a public vote about something so complex, when there isn’t a single person who seems to have a clear idea what a life post Brexit would actually look like?”