27.09.2021

JCB remains profitable

UK based telehandler manufacturer JCB has released its basic profit and loss information for 2020.

The company is privately held and only obliged to file basic information, but it has confirmed that revenues for the calendar year dropped 25 percent to £3.1 billion, with the shipment of 74,590 machines falling around 20 percent. It says however that it remained profitable in spite of “the severe impact of the Covid-19 pandemic on its global manufacturing operations”. Earnings before interest, tax depreciation and amortisation dropped 45 percent to £228 million, which would translate to a pre-tax profit of roughly £160 million compared to £276.3 million in 2019.

Chief executive Graeme Macdonald said: “In March 2020, £1 billion worth of orders disappeared overnight with the onset of Covid-19 and JCB was forced to close its 21 manufacturing plants around the world for around two months. Despite the severe impact on its business, JCB remained profitable in 2020 as it has done for the past 76 years. The turnaround in 2021 has been dramatic: we are sitting here now in September with four times the usual order bank we had in normal times two to three years ago. As a result, we are ramping up production to levels we have not had before. I have never seen anything like it in my career.”

Chairman lord Anthony Bamford added: “The past is the past and, while 2020 was undoubtedly one of the most difficult years in our history, our focus is now very firmly on the future. We continue to lead the way in zero emissions technology, particularly with the development of the construction equipment industry’s first internal combustion engine powered by hydrogen, which is already being tested in JCB machines.”

Vertikal Comment

JCB, along with other family owned manufacturers such as Liebherr, is among the most consistent businesses in terms of profitability and riding out periods of crisis. The company also has the benefit of controlling more of its supply chain than many of its competitors, and as such is in a great position to benefit from the current upturn and challenges. We will update this item when the company files its official accounts.