JCB bounces back with 150% profit growth

STRONG demand for its iconic products from around the world has seen a 149% rise in earnings for Staffordshire excavator maker JCB.

Such is demand that the Rocester company says it will invest £20m in its UK production facilities and recruit a further 50 staff to keep pace with orders.

As well as the UK, demand is also strong in emerging markets such as Brazil, where the company has said it also plans to invest in new production facilities.

In its annual results, the company said earnings in 2010 had increased by 149% to £235m, while sales were up 48% from £1.35bn in 2009 to £2bn last year.

Sales were up in the UK by around 20% as demand from plant hire firms also recovered from the depths of recession.

Alan Blake, chief executive of the firm, said: “British manufacturing has a quality reputation around the world. We are successfully manufacturing in the UK and selling around the world, and we think the UK is a good place to do business, with a hugely skilled workforce.”

The company has said the rise in revenue will also enable it to invest in new product development. The company is working to make its machines more fuel efficient while cabin enhancements to many of its excavators have also improved user appeal.

The results mark a dramatic return for the company, which suffered more than most with the onset of the recession, which was characterised by the decline in the construction sector.

The firm laid off hundreds of its skilled engineers and capacity declined considerably. New plant capacity was under-utilised and the firm had to fight hard to win what orders were being placed.

However, the company has begun 2011 strongly with a clutch of new orders and it has recruited many of its former workers back to its factories.

Demand continues to be strong in the BRIC countries – Brazil, Russia, India and China – where construction is recovering from recession far quicker than elsewhere.

To support demand, the company has brought out 13 new products this year and more are in the pipeline.