The viscitudes of the exchange rate since the Brexit vote have turned machinery dealers into currency dealers as they try to predict how the pound will move against the euro and dollar in response to the latest political announcements.
And while the plunge in the pound’s value should help sales to domestic customers, the lack of what DPM sales director Dean Beckett calls “desirable machines” means that printers aiming to buy second hand rather than new have few machines to choose from.
Most new machinery suppliers will price in euros, a way of protecting themselves from exchange rate fluctuations. As the sterling price of new presses increases, the appeal of late model secondhand machines would increase.
“In theory that would be encouraging printers to buy something locally rather than from overseas,” he says. “But because there are few new installations, there are few machines becoming available. Printers will come to us asking for a particular machine, we have to go overseas to find it and that is just more expensive.”
The Westerham dealer was fortunate over the summer having bought machines for stock ahead of the vote. It was able to move these on in the following weeks. “We lost less than we might have,” <a href="http://bit.ly/2h9tQTE" target=“_new" Beckett says. “The changes in the exchange rates have made this a whole new ball game. We have to think of ways to fix the currency, because we are buying a machine three months before we receive price for it.”
It means that dealers can receive more for a machine if they can sell it outside the UK, the value in sterling increasing sharply while the euro value has remained constant. Another impact is that it leads dealers to keep the money as euros for as long as possible, buying and selling in that currency to keep the price under control. The outcome is only known when the final conversion to sterling takes place.
West Park Graphic Machinery’s Simon Jackson also points to problems in India where “the currency situation is not helping” referring to a government decision to withdraw high value notes from circulation.
He too points out that quality machines are not available in this country because deals for new machines have been postponed following the Brexit vote. The Leeds dealer has received interest in an XL75-5 and LS29 that it holds in stock. “We are taking to people about them,” he says. “We have been trying to grow the UK side of our business, but the problem is that the currency situation has meant that there are no machines for us to sell because new manufacturers are not selling kit so used machinery is not around.”
For White Horse Machinery, printers that can find late model presses can pocket a profitable bargain, paying less per month than when buying new. David Watson, sales director, has placed machines with Evonprint, Curtis Packaging and Sudbury Print Group in recent months, part of the £8-9 million of UK sales the company achieves each year.
However, he says that the currency situation makes presses coming out of the UK and heading for eurozone countries that bit more attractive. The implication is that at the same time that supply is tightening for bargain seeking UK printers, prices are making it attractive for dealers to focus on their export business.
Exchange rate stability will help and there have been signs that the pound is picking up against the euro says Beckett. And he says the value against the dollar will continue to be uncertain at least until the inauguration of the new president at the end of January.
“But we can’t just look at this from one perspective. We have been benefitting from the exchange rate as well as suffering from it,” he says. “We have to cut our cloth and refocus as best we can.”
The fall in the value of sterling has made UK secondhand presses more appealing to overseas printers as well as to UK customers. The problem is that with few new machines being installed, the stock of used presses is limited.
