I wanted to write to you and update you as we approach the 4th quarter of 2021, which for most of us proves to be the busiest and most successful quarter of the year.

With demand steadily increasing following the relaxation of COVID-19 restrictions, I am pleased to say that our business is in fantastic shape to support you over the next few months. There has been much said in the media about the continued effects of supply shortages, raw material price increases, and driver shortages, which may cause concern. I wanted to address these matters and explain what we have done to mitigate them.

Material Shortages

Many suppliers continue to see disruption in their supply chain due to the cost and shortage of shipping containers used for components and products manufactured in the far east. Over the last two months, we have been monitoring and bolstering our stock. We have secured stock of all key components and have the stock physically with us, in our warehouse. This includes but is not limited to hinges, drawers, cams, pins, dowels, legs, plinth clips, screws, shelf pegs, cutlery inserts, bins, light fittings and sink tray liners. With these items available, we can continue to operate without interruption for 3 whole months without the need to take a delivery from our suppliers, should their supply chains falter. We will continue to hold these levels of stocks and take delivery of additional inventory to ensure that we have an uninterrupted supply during our peak trading period and into the new year.

The one area which we are still closely monitoring is the board supply. As I am sure you will remember, there was a large disruption to board supply last year with UK board manufacturers unable to meet market demand. There is still a lot of pressure on the timber market which is struggling to recover and is now also hampered by the shortage of HGV drivers (The same shortage which also sees our supermarkets unable to offer a full selection of products). Our board deliveries, which this time of year, equate to 3+ full articulated lorry loads per week are being delayed and as such we have on standby a logistics solution that will see us collecting the goods ourselves instead of relying on our supplier’s logistics should the situation further deteriorate.

We have increased our stock holding of MFC too, but due to the bulky nature of this product, we are unable to stockpile significant quantities to see us through 3 months of trading. We have received notification that the following colours will have ensured supply through Q4 and be available from stock at our supplier’s warehouses:

Alpine White W1100

Porcelain White W1200

Alabaster White U104

Pebble Grey U201

Cashmere Grey U702

Light Grey U708

Stone Grey U727

Dust Grey U732

Pearl Grey U763

Onyx Grey U960

Graphite Grey U961

Grey Bardolino Oak H1146

Natural Lancaster H3368

Colours outside of this list require us to order with a new 3 week lead time. We will continue to hold colours outside of this list and will look to stockpile the following colours to ensure that we can achieve our standard lead times for these colours:

Natural Halifax Oak H1180

Arlington Oak  H3303

Charcoal Flow K353 RT

Fjord  U636

Indigo Blue U599

White Halifax Oak H1176

Taupe Grey U750 (ST9)

Denim U540

Concrete Flow K350 RT

Mussel U100

Natural Hickory H3730 ST10

Dakar U717

Black Textured U999

Tobacco Halifax Oak H1181

With this product mix based on normal demand then we have coverage of 94% in stock or available on short lead time meaning we are not anticipating the need to extend lead times on these colours. Colours outside of these may require longer lead times, but we will endeavour to keep these to a minimum. If you have time-sensitive jobs in colours outside of the aforementioned, please let us know as soon as possible and we will take every measure to ensure that we can fulfil these as quickly as possible. Similarly, if you have a large order/volume in a particular colour, please let us know with as much notice as possible so we can buy ahead for you.

Machining update

Over the last 8 weeks, we have had an issue with our nesters which have led to us adding overtime to one machine in order to meet demand. This issue is now resolved as we go into Q4 and our machine operation is where we expect it to be. At present we have the capacity for an additional 30% on top of current production figures in anticipation of orders ramping up from now. We have had issues over the last 3 weeks with a power supply fault for our building. This is now resolved following extensive excavations in the main road by Western Power and at present, we believe this to be cured. With the above taken into consideration then we are pleased to report no issues at this time that would see our need to extend our lead times.

Pricing Update

I am sure we can agree that we are all fed up with increasing prices, and I have taken the decision to commit to holding our current prices for the rest of the year to give you stability in the quarter. We have however already been subjected to a further 5% increase on our raw board material cost as of the 1st of October with a warning of additional increases to follow. Also, I am sure many of you have seen the increase put in place for January 2022 by Blum (as it has been widely circulated) that sees prices of Blum components increasing between 15-17% and in some extreme cases 27-29%. With this in mind, it is inevitable that we will need to review this in January once the dust has settled and we have a clear understanding of what costs have changed and the outlook for 2022. It hopefully goes without saying that we will be doing everything possible to keep this increase to an absolute minimum.I hope the above gives you confidence that we have put the most robust strategy in place to avoid the delays we saw last year whilst delivering a product, at a price that is stable for an extended period given the market volatility, over the peak trading period of 2021.

As ever, should you wish to discuss any of the above with me, or any other matter, please do not hesitate to contact me.

Best regards,

Tom Dalton