ITW Ltd, the UK arm of the mammoth ITW manufacturing group, has just published its latest financial report for the year ended 31 December 2018.
Publicly available on Companies House, the figures show the overall group’s turnover slipped by less than 0.5%, from £848.0m in 2017 to £843.9m last year. The annual report cited a reduction in royalty income as being the cause of the slight cut.
Operating profit shrank by 20% from £156.7m to £124.7m for the last 12 months. The report put this figure into context, stating: “This was largely due to a reduction of £17.2m in gross profit, £6.1m of which is due to a higher intellectual property amortisation charge in 2018 compared to 2017.”
However, the company expects the general level of activity to be maintained in the forthcoming year.
The group’s food equipment division represented £194.9m of that turnover, which is down 4% on 2017’s £203.2m.
The food equipment division includes the whole Hobart UK group, including its warewash, cooking and service arms, plus Foster Refrigerator and its sister drinks cooler specialist, Gamko. However, all of these companies’ results are not stated individually. The operating profit figures for each of the group’s divisions is also not published within the report.
In geographical terms, for the whole group, UK-generated turnover was £321.5m, down 4% from £333.3m in 2017.
ITW Ltd director Giles Hudson wrote in the report: “The company operates in highly competitive markets which is a continuing risk to the company and could result in losing sales to key competitors. Also 61.9% (2017: 60.7%) of the company’s turnover is conducted overseas and therefore the company is exposed to the uncertainties caused by Brexit.
“However, by selling worldwide the company is able to mitigate any risks associated with a downturn in the UK economy. By diversifying across seven separate sectors the reduced activity and profitability in one part of the business can be offset by positive results in other sectors.”
He predicted: “Despite the current uncertain worldwide economic outlook, the company’s forecasts for its wide range of business, which operate across different geographical locations, show that the company will continue to generate strong cash flow and profits.
“As a consequence, the directors believe the company is well placed to manage its business risks successfully.”