Safety firm is back in profit despite lower sales
Safety solutions business, Arco, has reported a return to operating profit, with financial results ahead of target, one year into its ‘Destination 2030’ transformation plan.
The Hull-based company’s annual results show a profit increase of £4.4m for the year ended 30 June 2024 (FY24).
Excluding exceptional items, the business made a pre-tax profit of £1.3m, compared with a pre-tax loss of £3.1m in the previous year.
The turnaround in profit was achieved despite sales being 6% lower, as the company focused on quality of earnings and gross profit margin.
Arco achieved its highest gross profit margin in a five years, at 23.9%, and ended the year with a strong net cash position of £3.5m.
Guy Bruce, chief executive, said the results demonstrated the effectiveness of the transformation programme in enhancing profitability while driving improvements in areas such as customer service, choice, sustainability and business efficiency.
Guy Bruce
He added: “One year into our Destination 2030 plan, we have delivered much of what we set out to do in the initial ‘Fix the Foundations’ phase, with financial results ahead of target.
“Arco today is a stronger and more disciplined business than it was a year ago, with improved margins, a healthier cash position and extended capabilities to serve customers effectively as we execute the next phase, ‘Build for Growth’.”
Arco says it has strengthened its supplier relationships, working with fewer suppliers, but more closely, to develop a proposition that is better suited to its customers’ needs.
In FY25, the firm says it is moving into the “Build for Growth” phase of its transformation journey, in which it plans to double investment, enhance its customer value propositions, website and e-commerce capabilities, and introduce innovative new products.
The company is planning further investment in its Arco Professional Safety Services business, introducing new facilities and training propositions.
As well as investment in organic growth, the firm is seeking to grow through inorganic routes and is actively looking for businesses that would make suitable additions to the organisation.
Bruce said: “Focus areas for potential acquisitions have been identified and we’re excited to explore opportunities that present a strong match to those criteria.
“We are excited about the progress we will make towards long-term growth this year, and the continued development of an even stronger Arco business.
“While our business is in a strong position, we are mindful of the challenges ahead. The impact of the Government’s recent budget will undoubtedly put additional pressure on businesses, including ours.
“As we move into the next phase of our strategy, we will do so in context of the changing economic environment, seizing opportunities to grow whilst maintaining financial resilience.”
