Surging UK plant sales prop up JCB profits

Aaron Morby 9 years ago
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A sharp surge in UK demand for construction equipment helped JCB hold profits above £300m for the fourth successive year, despite a tightening international market.

Underlying earnings before tax were down from £313m in 2013 to £303m, before one-off restructuring costs of £11m.

Sales turnover dipped to £2.51bn against £2.68bn the previous year, and machine sales were also down from 66,227 to 64,028.

JCB Chairman Lord Bamford said: “For different reasons each of the ‘BRIC’ markets of Brazil, Russia, India and China were sharply down in 2014. However, the broad spread of our business enabled us to benefit from better conditions in North America, Western Europe and particularly the UK.”

Announcing last year’s results, he pitched into the UK referendum debate claiming Britain would be better off outside the EU, a view in stark contrast with that held by many other business leaders.

“We are the fifth or sixth largest economy in the world. We could exist on our own, peacefully and sensibly,” he told the BBC.

Lord Bamford said an exit would enable the UK to “negotiate as our country rather than being one of 28 nations”.

Markets in the UK and North America grew by 30% and 13% respectively. JCB’s sales in North America grew by 23% – outpacing the market and making it a record year for JCB in North America, which is now the company’s third biggest market behind India and the UK.

The construction equipment market in Brazil dropped by 17% in 2014, Russia fell by 27%, India by almost 15% and China by 17%.

Lord Bamford added: “Global market uncertainty has continued into 2015, though our home market of the UK remains a rare bright spot.

“The need for infrastructure in much of the developing world remains acute and will eventually drive a resumption of growth. Our resilient performance in 2014 demonstrates we are well placed to capitalise on improving trends as they emerge.”

Since 2010, JCB has created 2,000 new jobs at its 11 UK plants, boosting employment levels to 6,000. Globally, the company now employs 12,500 people.

JCB is currently investing in UK manufacturing by increasing production capacity at its World HQ in Rocester, Staffs.

The company also completed a 700,000 sq ft factory development in Jaipur, India in 2014 costing £62 million and construction of a new €25 million HQ for JCB Germany is also underway.

Lord Bamford added: “We continue to invest heavily in all areas of our business despite the difficult markets, and this is the best demonstration of our confidence in the future”.

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