Hesco Bastion makes clear progress as pre-tax profits rise
PRE-TAX profits have risen at manufacturer Hesco Bastion as it continues to focus on innovation and building the business back up after a challenging period.
Pre-tax profit at the Leeds-headquartered barrier system manufacturer has increased to £4.5m, up from £4.1m last year, but turnover has shrunk once again to £20m, 39% lower than the company’s turnover of £33m last year. CEO Mike Hughes said this drop was anticipated, following the withdrawal of the US and UK military from Afghanistan and Iraq, which caused the firm to see turnover reduce by two thirds in last year’s results.
Overall profit for the financial year to the end of January 2014 has increased from £3.6m to £4m and overall net assets increased to £16.2m in comparison to £12.6m in 2013. Hesco has also announced the acquisition of specialist manufacturer of ballistic plate inserts in the US, Reed Composite Solutions (RCS), in a multi-million-pound deal. The RCS products are used to protect men and women of the military and federal law enforcement throughout the United States, and Hesco plans to further its product range and reach under the brand of Hesco Armor.
Hesco Bastion, which was founded by the late Jimi Heselden, is now led by CEO Mike Hughes, who was brought in by the Heselden family to refocus the business and respond to the impact of world events.
“There’s going to be a lot of focus on developing RCS and we will be pushing that forward next year,” Hughes said.
Hughes said the firm will be looking at joint ventures or further acquisitions to strengthen the business moving forward.
“We are a lot more confident now than we were a year ago. We’ve got better clarity of where the business is and we are positive about where we are at the moment. All being well, we will see progress next year in terms of revenue and profitability. It really is exciting at the moment.
“This last year has been eventful for Hesco, coming on the back of reduced annual results in 2013 and emerging from a period of significant restructure. Changes of this magnitude are not made overnight however the timely action we have taken to identify the change needed and the new journey we are now on means the company is making headway to maintain our position as the market leader in defence products. We have delivered on our promise to focus on investment, product innovation and have some exciting plans to announce which have had an impact on our latest financial results.
“Our financial statements reveal a reduction in turnover but we are encouraged that the margin is less than the dramatic results of the previous year and we have reported an increase in profits and a clear direction as highlighted in our diversification strategy.
“Our target for the remainder of 2014 and 2015 is to continue to build upon our reputation as the market leader in our niche sector and launch two exciting new products and integrate RCS into the Hesco business. As a result we now have a seasonal average of 100 employees in Leeds and our goal continues to be the protection of people and assets against manmade and environmental forces.”
Hesco Bastion added that the acquisition of RCS confirms Hesco’s commitment to expand into new markets and will bring more work across to the UK Headquarters in Leeds to complement the manufacturing and research facility in the US. It may also provide potential new job creation locally in the future following the integration of the business.
“The acquisition is a perfect fit for Hesco as we can use our experience in this sector to work alongside the team at RCS and bring the products in the forefront of protective wear,” Hughes added.
Last year, the firm highlighted its focus on product innovation and now, significant new product innovations are afoot in the UK with two new products manufactured in Leeds that are set to be launched including a new flood product called the Jackbox and TerraBlock with more details for the latter to come early 2015.
