Cautious approach from bathroom manufacturer despite sales rise

The chairman of Birmingham-based bathroom fittings manufacturer Samuel Heath said the business must be “very cautious” going forward as it reacts to a challenging economic landscape.

Announcing its results for the year to the end of March, chairman Sam Heath said: “Moving forward to the future and the current financial year, we must be very cautious. Shareholders must be sick of me saying it, but uncertainty is the worst thing for a good business environment. We certainly have plenty of uncertainty at the moment.

“It is pleasing to report the results for the year, which although a little bit down on the previous one, were still satisfactory.

Sales revenue was £14.3m, up from £13m the year before, although profit before tax was £1.17m, down from £1.23m.

Operating profit was £1.33m, reduced a little, reflecting investment in overseas markets, with a margin of 9.3%, compared to 11.1% last year.

Heath said: “During the year, sterling appreciated after its sharp decline following the Brexit vote, reducing profitability on export sales. At the same time, the business invested in its sales infrastructure, principally to benefit future export sales. These combined to reduce our current margins.

“In constructing our budget this year, we consulted with some of our larger customers, particularly in the UK, about their own budgets. These varied from cautious to the downright pessimistic.”

“Our own order book is down on what it was last year, which reflects the lack of sizeable contracts, again caused by others fearing to commit. On the other side of the coin we have some first class products including our expanding Landmark range of taps and accessories and the much tested Powermatic door closer. We also have active, if sometime erratic, export markets, which are the result of much thought and hard work over the years.

“We are budgeting for a sales and profit figure down on last year, whilst remaining profitable, and at the time of writing are achieving our budgeted levels.”

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