A £2m investment has been made by Duncan and Todd into new manufacturing facilities to maximise lab capacity and better support independent optical practices.
Additionally, the company expanded its number of practices to 44 after it recently acquired five independents with a view to steadily grow each year.
This activity at Duncan and Todd has all helped the group to mark its 50th anniversary, which it celebrated in November with a party for employees who had worked at the company for over 20 years. In the community, practices offered discounts to patients and, crucially, cake.
Leading Duncan and Todd through this period was managing director, Frances Rus, who told Optician she was excited about taking opportunities after the challenges of Covid-19. ‘I could be wrong but I’m feeling pretty bullish about 2023,’ she said.
Rus has worked for Duncan and Todd since 1984 and was appointed to lead the company in 1997. Reflecting on the biggest changes in the industry, Rus commented on how many optical practices now provide audiology services. ‘We started doing audiology the year before Covid and it has accelerated quickly. For the first optical businesses to have done audiology, it was quite the challenge of changing people’s perspective on it. Now, people accept the fact that they’re going to get their hearing screened at the same time as their sight test.’
In terms of the sight test, Rus noted the development from simply refraction in the 80s to diagnostics. ‘There’s a lot more health connections to testing now than there were in the past. Opticians are doing far more for management of post-cataract and glaucoma clinics. None of that was done in the past. It’s a great service because it frees up ophthalmologists.’
The other side
Duncan and Todd closed its practices for three months at the start of the pandemic and a team of and independent prescribing optometrists saw patients at a triage hub in conjunction with ophthalmologists, which has created a closer working relationship than before.
Rus said sight test numbers at Duncan and Todd halved in 2020 compared to a normal year but the company had almost recovered. Patient recalls have been lower, which Rus said was a challenge Duncan and Todd’s contemporaries also experienced. However, the company was coming out the other side and key performance indicators were steady.
‘We thought long and hard about how we managed recall. Ideally, if you increase your test days and see people faster then you would’ve caught up, but that was difficult because of recruitment issues. In the past, we used locums during busy periods but there was not much local availability. Some branches have been at different stages but, by the end of this financial year, the majority of them will have caught up. We’re through the worst now. The numbers next year will be more stable and patients will be back in normal recall cycles.’
Rus shared that turnover at Duncan and Todd was stable when compared to last year. She said, although no records were being broken, performance was stable and consistent. ‘A lot of people are saying the next 18 months will be a challenge, but this issue of recall will disappear for us,’ Rus said. She added that her intention was intention to return to normal planning, whereas the last two years were about seeing the company and its people through the pandemic.
Anniversary acquisitions
Duncan and Todd celebrated its 50th anniversary with acquisitions. It typically opened between five and eight practices a year. Rus said the company sought like-minded partners rather than looking at hard data to determine if an acquisition was worthwhile.
‘The plan is to keep expanding. There are new businesses opening, which is always good to see because it just tells you it’s a market that’s still attractive. At the same time, there’s going to be a lot of consolidation in the next two years. There are very few places you could open up a practice from scratch,’ she said. Rus explained that the group’s expansion was funded by cash flow and money from the bank, which the company did not dip into as much in 2020 or 2021 because there was not much going up for sale.
Duncan and Todd has 44 practices currently and Rus estimated it would have between 70 and 75 in the next few years as movement in the market picks up after Covid. She said practice owners who might have retired earlier, held off because of the pandemic and now there were more opportunities for Duncan and Todd.
‘I look for good demand. The hardest thing to grow is a loyal patient base. Then, as soon as an owner tells their team that they’re selling, I make sure that myself or Julie, the retail director, are there to reassure them. We don’t necessarily go in and change everything. We take our time, and often, we can learn from them too.
‘I’ve been out and about a lot recently. I’ve been involved in the new acquisitions and asking people to give honest feedback. I’m not scared to hear what went well and what went badly. Generally, people settle in quickly and are happy,’ Rus said.
Sea change
As well as expanding its portfolio of practices, Duncan and Todd was set to invest over £2m to grow its manufacturing operations. Ambitious targets of double digit growth were set, Rus explained, which would be fulfilled by additions to its sales team and marketing proposals.
‘We’ve got this huge investment in manufacturing, which is well under way. We should have the building works and all the new lanes of equipment and automation in place for Christmas and then everything will be commissioned in January. We’re looking at full production by February,’ Rus said.
She added that the lab was maxed out in terms of space and investment would allow the company to develop external manufacturing. This should mean turnaround times would improve for Duncan and Todd’s practices and independent customers.
‘We’ve got an amazing range of products across the portfolio, in terms of digital lenses. We haven’t done any conventional multifocal lenses since 2010 when we put in a freeform surface. Then we switched all our patients from conventional lenses to digital at no extra cost, which really drove business and gave us a unique selling point. We’ve got Drivelines and we’ve just been accredited for myopia management lenses, which we are going to roll out across the business.’
Duncan and Todd has appointed someone to lead on product development, who would work across manufacturing and retail to support and develop staff across the company’s range of lenses.
Rus explained there was an opportunity for the company because the Far East was no longer a cheap option and Brexit drove businesses to look closer to home.
‘We’re speaking to a few labs about white labels and doing work for those that currently get their products from outside of the UK. The timing for us is great. There’s a real opportunity, a real sea change and I think people are looking for quicker turnarounds with the same quality. When you consider import and export duties and the challenges of controlling supply in the UK, it’s back to being a good option.’
Phase one of the plan has seen around £1.5m invested to increased surfacing capacity and phase two, in 2023, would expand the coating facilities, which would require a further £700,000 to £800,000. ‘We’re adding another surfacing line, automation, a clean room facility and all the waste disposal, which is far more environmentally friendly. We’ve got a second coating facility and that’ll come once we’re settled and have increased production.’
Rus said most independent optical practices want to give their work to one lab and the new facilities will have the space to accommodate that need.
Future opportunities
Duncan and Todd’s display screen equipment (DSE) business, Smart Employee Eyecare, has a database of over 2,000 optical practices across the UK, including independents and small groups. Rus said the company has developed the database so an independent could get their own corporate work locally.
‘If it is a local one site DSE contract then they quite like someone local. We will launch the service at 100% Optical 2023 and it will allow independents to use their database for the contract while using our database for the supply chain invoicing. We will take all the headaches out of it for them and we will be true partners in terms of sending them work. That’s really exciting because I see that as another development in our relationship with our competitors,’ she says.
Myopia management was another area Rus saw as an opportunity for Duncan and Todd. Rus told Optician an ophthalmic lens was accredited and would be available from Caledonian soon. A free trial for patients would start in some practices in December with the view to roll it out across its portfolio between January and March 2023.
‘Like anything we do, we like to take our time and do it thoroughly. We like to make sure it’s embedded and that there’s an understanding before we go out and tell everybody about it,’ she said.