12.11.2009

King up 25%

UK based King group, which includes, King Trailers, King Highway products/SkyKing and King Transport Engineering has reported full year revenues for the year ending March 2009 of £17.4 million, an increase of more than 25 percent on 2008.

At the same time pre-tax profits were £392,114 an increase of 87 percent on the same period last year. King says that its new engineering and project management business - King Transport Equipment - contributed to profits in its first year of trading, whilst King Trailers and King Highway Products both performed well in revenue terms.

The company has also had a successful year with sales of aerial lifts, which are marketed under the SkyKing band, having delivered a number of large Wumag – now Palfinger - truck mounted lifts during the period as well as maintaining strong sales of the GSR van and truck mounted lifts.

Group managing director, Mark Carrington said: “In a year of two halves King are pleased to have announced results for its constituent companies where aggregate profits have increased by 87% on a turnover which grew by some 25%. The year commenced in a climate of buoyant orders but major component shortages.”

“Business levels were aided by the use of high levels of subcontract manufacture without excessive increases in the company’s own overhead structure.”

“As the year progressed and order levels reduced following the banking crash, we were able to reduce costs without dramatic reductions in internal capacity. Regrettably staffing levels were reduced but at a manageable pace.”

“Despite continual denials by government during the summer of 2008 that the economy was heading for a downturn, we significantly reduced levels of scheduled stock build which meant that later in the year we were not burdened with excess levels of stock”.

“Our concentration on specialist projects particularly in the power sector has allowed us to maintain a reasonable order bank at a time when demand for simple trailers has declined due to the downturn in our traditional construction industry markets.”

“The business has also been helped by the company’s focus on refurbishment and rebuilding work at a time when capital spending for many customers is on hold or delayed due to the unwillingness of banks to provide reasonable levels of asset financing”.

“We are confident that the concentration on highly engineered specialist equipment will provide some buffer to the reduction in business for standard repeatable products.”

Vertikal Comment

It is excellent to see a company such as Kings continue to do well in spite of the downturn, the company has managed to develop some real diversification in its product range, while keeping them all to technology, skills and marketplaces that it understands.

Mark Carrington is a shrewd operator and appears to have got his timing just right this time round. Experience helps of course as does size and the ability to make decisions without having to look over your shoulder at analysts and shareholders who may well have a shorter term outlook than is healthy for the business.

The company is currently just over halfway through its 2010 year which is almost certain to be harder. It is however well placed to benefit from the weakness in sterling and its low overhead structure.