Greenberg Glass faces price squeeze from big clients

Greenberg Glass has posted the first fall in its operating profit since 1992, according to its recently published accounts.
The firm, based in Liverpool, north-west England, which specialises in emer…

Greenberg Glass has posted the first fall in its operating profit since 1992, according to its recently published accounts. The firm, based in Liverpool, north-west England, which specialises in emergency glazing services and supplying new property developments, saw pre-tax profits for the 12 months to 31 March 2005 cut to GBP 1.79 million from GBP 2.06 million the previous year. Sales were also down by 4% from GBP 35.98 million in 2004 to GBP 34.5 million. Shareholder and business development director, Beryl Greenberg, laid much of the blame for the “disappointing” fall on corporate customers squeezing prices from suppliers. “We have been hit by price pressures exerted by big companies like major supermarkets,” she added. Ms Greenberg said a strategy was now in place to increase revenues from customers in the development and building contractor sectors. Around 59% of Greenberg“s current sales comes from emergency boarding up and replacement glazing for national and regional customers. It is an approved contractor to major companies including retailers Marks & Spencer, Sainsbury“s and Somerfield, and builders McAlpine and Mowlem. The company operates from 18 branches, 10 depots and 20 satellite sites. It also operates a 24-hours-a-day, seven-days-a-week call centre for emergency jobs. In its annual report it said: “We are now reviewing the present business model and intend during 2005/06 to make some strategic changes towards a more focused sales and operations regional model with centralised administration.” Greenberg did realise a GBP 1.22 million profit from the sale of its head office which is on the site of a major regeneration project. The firm, which employs more than 600 people, has signed a lease to continue to use the building rent free until January 2007. In the meantime, Greenberg is seeking suitable premises for relocation. Like many firms, Greenberg has to face a growing deficit in its pension fund. For the 12 month period the deficit in its fund increased by 21% to GBP 1.21 million, despite increased contributions and its closure to new members in 2001. Poor investment returns, the continuing reductions of gilt yields and longer life expectancy were blamed. The annual report adds: “A discussion document with options for the future funding of the scheme is under review with changes to be agreed and implemented no later than April 2005”.