Resilient results amidst difficult conditions for family owned group
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Hull family business JR Rix & Sons Ltd has reported a successful trading year during 2020 despite “challenging and uncertain times” brought about by the pandemic.
A slump in demand for petroleum products during lockdown, as well as an accompanying fall in oil prices, resulted in a 22% drop in Group turnover, down from £509.3m in 2019 to £396.8m last year.
Pre-tax profit remained in line with expectations, however, at £4.7m.
Group managing director, Rory Clarke, said: “Despite obvious turmoil in some of our subsidiaries, we are pleased to announce that overall, the Group’s activities returned a healthy profit.”
The company’s largest subsidiary, Rix Petroleum, sold an average of 5% less fuel by volume in 2020 compared to the year before, although demand in the retail and commercial and road fuel sectors fell significantly further as the country all but closed.
However, the single biggest factor influencing revenue performance in the 12 months to December 31 2020, was the slump in the price of crude oil.
The price fell sharply in early 2020 and remained well below the 2019 average for most of the year, only recovering in the winter.
This resulted in Rix Petroleum reporting a drop in sales from £379.4m in 2019 to £304.1m last year.
Other areas of the Group were also impacted by the ongoing COVID situation, with the worst affected subsidiaries receiving Government support, as well as backing from the parent company.
JR Rix & Son’s motor division – Jordan Cars – which sells Fiat, Jeep, and Alfa Romeo as well as used vehicles, was forced to close its showroom for four months during lockdown in line with other motor retailers, resulting in a turnover drop of 35%.
Victory Leisure Homes, the company’s holiday home and lodge manufacturing business, shut its factory doors for 11 weeks as UK holiday parks remained closed for large parts of the year, and this, along with overstocking in the wider holiday home sector, resulted in a 20% fall in annual revenue.
Clarke said that 2020 had been a satisfactory year given the clear and difficult challenges the company and wider UK economy had faced.
He added Rix Shipping saw a £3.5m growth in turnover – up from £14.5m in 2019 to £18m last year – due to tight control of operational costs and significant investment in warehousing in Montrose, Scotland, which lead to securing long-term contracts in the agricultural sector.
Clarke said: “Like a great many businesses in the UK and globally, the ongoing COVID situation has impacted on the Group.
“The decrease in revenue is largely attributable to significantly lower oil prices for the majority of 2020, although those businesses most impacted by consumer demand were cars and holiday homes, which benefitted from both government support and from the parent company.
“However, it is by no means all bad news. Some subsidiaries in the Group were relatively unaffected by the pandemic and others benefited from volatile markets and increased demand.
“Therefore, whereas 2020 was a mixed bag for JR Rix & Sons, we feel the business achieved a good result in challenging and uncertain times.”
He said the group’s strategy continues to be one of reinvesting profit into opportunities it identifies through new business development, along with targeted acquisitions.