New Zealand’s biggest privately-owned caterer, Montana Group, a business “absolutely hammered” by Covid, will use its balance sheet and its new deep business plan as it launches a second defence against the pandemic, co-owner Dallas Fisher says.
The Auckland and Waikato catering heavyweight employs 600 permanent and regular staff.
Fisher just this week proudly recounted how Montana had got through the crisis with a handful of job casualties in Auckland and had launched new facilities for customer Auckland Zoo.
“It’s Groundhog Day. We’re closing down Auckland [operations] except for the university and we’ll just go again,” Fisher said today, as he marshalled staff and actions in the $40-million-a-year-revenue events hospitality business to respond to new level 3 and 2 restrictions.
“Once again we will need to be nimble, to understand all the facts, and we have a balance sheet. We’ll use it. We have a plan and we’ll just kick things off again.”
The Government wage subsidy ends later this month.
But Fisher said he was more concerned about the country’s traceability system which “is not working as well as it could”.
“We use our own QR codes and internally we’ve got quite good at it [traceability]. But they didn’t quite finish the job on this.”
The Hamilton-based entrepreneur and former accountant, last year honoured with an ONZM for services to business, philanthropy and sport, said a lot of hard work and analysis had gone into ensuring the business survived the overnight halt of all its income in the Covid-19 level 4 lockdown response, and restrictions in the following level responses.
Montana’s business spans Waikato and Auckland events centres and sports stadiums, universities, secondary schools, functions and retail hospitality management, major sporting fixtures including All Black tests, large events and business hospitality across seven brands.
Compounding the Covid challenge for the business, just before level 4 lockdown Fisher had a major health issue.
This has forced him to step back from many governance roles except for Montana, as a director of Waikato engineering exporter NDA and “I’m still helping the Chiefs”.
But it gave him time to think deeply about how Montana, “founded from nothing in 2002”, could battle Covid. The business had just completed a “deep, really detailed” financial forecast through until December.
It had planned to do a new forecast in November for the following six months.
“We are taking manageable bites. We went really deep and hard with the operators of the businesses. I’m not a business operator. I’m at the centre and I’m a generalist and with the technical skilled staff we worked closely with the operators to debate revenue.
“We asked ‘what’s going to happen with conferences, what’s booked, what’s in the pipeline with business events, Claudelands, the stadiums, the market?’. We went deeply into that and into the market place.”
“Then we said if we can achieve that revenue plus or minus, what fixed-cost base do we need to run to support it and what is our variable cost base?
“We developed a proposition – we needed to turn fixed costs into variable costs. Instead of having massive fixed costs, we needed costs we could shrink and grow. We have become a variable cost business.”
Fisher said it helped the company was in good balance sheet shape before lockdown.
“We’d looked after the business. We calmly thought it through. We used our business generalist skills and our technical skills.”
The company took the Government wage subsidy and used “a bit” of its capital reserve to “pay people and as working capital”.
He said while planning, he’d picked that retail and large event spending by New Zealanders would return relatively quickly after lockdown, but conference and business event spending would take time to recover.
“So we built our shape around that. And it has worked out. There’s been a little bit of luck there but invariably we thought things through.”
Before the new pandemic response was announced, Fisher said if a second wave of community virus transmission hit New Zealand, his company’s approach would be the same.
“If there’s another wave, we’ll just run again. We have to be nimble, we have to be generally ready, but react quickly to the facts.
“I’m worried about another wave. Coming out of it will be a bit harder.
“It sounds namby pamby but we have to trust the Government, do what we’re told, and think it through.
“But we have to get tough. It’s the nature of Kiwis. One of the things not given credit for is that Kiwis are adaptable people. All over the world, invariably the people on big projects and in big industries running them are Kiwis.
“We think things through and get on with it. We are sensible people. We are extremely adaptable. We are relatively calm people. We have a good manner. We get on with people.”