Spares specialist First Choice Group has recorded what it calls “a period of mixed financial achievements” for the financial year ended 31 December 2018.
According to its latest annual report, now publicly available from Companies House, the Cannock-based company generated £31.4m turnover last year. However, the previous financial year was an 18-month period as First Choice realigned its reporting with its US parent company PT Holdings, which purchased the business in 2017.
So while the previous recorded turnover was £41.4m, this would equate to an average of £27.6m over the past 12 months, which would indicate First Choice grew revenue by around 14% in 2018.
However, gross margin slipped from 27.1% to 25.9% and operating profit fell 44% from £1.2m to 0.7m.
First Choice MD John Whitehouse put these results into context within the report, stating: “The drop in gross margin was partly due to competitive pressures and requirements to offer improved discounts to customers, but also the company’s strategy of stocking and supplying primarily OEM parts, which invariably come at a higher price. This had a significant downward impact on operating profit.
“The company continued to invest in spares stock, seeing stocks further increase from £5.5m to £6.4m. This was required to fully embrace our strategy to improve stock availability and to ensure our customers’ needs are fully met.”
He further underlined to Catering Insight: “The results are as expected really, and in line with our strategy. The significant investment in people, training, genuine OEM spares stock and manufacturer partnerships are all part of our strategy/growth for the future and all made possible with the infrastructure and resources within our new state of the art facility.
“In summary, we are confident in the direction and speed of our growth, and also extremely excited about the short and long term future ahead.”