Mike Lord is Chairman of Handicare Accessibility and former Chief Executive of Minivator, a leading stairlift manufacturer based in the Black Country. Minivator joined the Handicare group, based in Norway, a year ago.
How has joining the Handicare group changed your business prospects in terms of the UK, European and global markets?
Absolutely – in a number of ways. To start with the UK: one of the things that Minivator was doing prior to joining the Handicare group was product range extension: trying to sell different kinds of products into the same customer base. Those products were particularly focused on moving and handling. Handicare already has a division that does that, so we’ve been able to plug their product range into our UK distribution channel. It also gave us an even bigger base in terms of established UK sales and a broader market point: they have a mobility division in the UK, and clearly the addition of that extra product range and sales team under the same brand helps with developing the distribution channel and the bigger company feel that we now have.
In terms of European and global markets, part of the rationale of Minivator becoming part of Handicare was that they already owned a stairlift company with a more significant sales base in Europe, so what we have now is a broader product range in stairlifts that we can offer into that European customer base – we’re immediately getting wins there. Handicare’s original company, Freelift, had a curved stairlift but not a particularly good straight stairlift, so we were already selling straight stairlifts into Handicare’s customer base. So there’s a synergistic effect there in terms of the way the accessibility division of Handicare developed as a result of us being part of the group.
In terms of the US market: Handicare doesn’t have a lot in the US, and we had about 20% of our turnover in the US. Again, that gives us an established distribution channel through which we can offer the Freelift products into the US marketplace, which again tactically helps us to gain more market share.
So the simple answer is: it’s a big difference and there are lots of synergies, some of which we’ve already realised and some of which are really going to come to bear in 2011.
How is the closer integration of health and social care in the UK changing the market for homecare products such as stairlifts?
The exciting thing for us is the promotion of GPs to be the fundholders. We see that as a very positive move by the Government, and as recognition that GP practitioners, who are generalists but have clinical knowledge, will be able to understand how helping people to live more independently can reduce the burden on hospital and domiciliary care.
The change will take time, but we see it having a big impact on homecare products, with much more of a focus becoming apparent in policy. There’s a downstream cost saving in keeping people out of secondary care, but that requires an increase in budget when the effect is maybe 4 or 5 years down the track. The circle has never been squared because social care is responsible for one budget and healthcare for the other. We see GPs as the joining factor, and we see that being incredibly helpful to the situation in our product group.
How can specialist medtech companies in the UK adapt successfully to the current changes in the business climate?
Medtech has been relatively insulated from the recession. We tend to see a consistent growth in all phases of the economic cycle that is driven particularly by demographics, so we’re not wholly reliant on Government spend. If medtech businesses are in the sector where that applies, it gives a much wider spread for their business going forward.
The challenge for small and early-stage companies is raising finance, because banks are more careful about ensuring they have robust collateral for the money they lend. That’s right and proper: we’ve criticised them in the past for not making the right decisions, so I don’t think we can criticise them for being more sensible now.
So the market is definitely there for medtech companies that can adapt to the changes in the business climate. These changes, in my view, should make it possible for smaller medtech businesses to adapt more quickly than their bigger rivals, taking advantage of the new distribution channels and new ways of selling that start to emerge.