ITW Ltd, the parent company of catering equipment manufacturers Hobart, Foster and Gamko, has reported very positive financials according to its latest publicly-available accounts from Companies House.
For the year ending 31 December 2017, ITW Ltd’s overall group turnover reached £848m, which is £108m or 14.5% up on 2016’s figure of £740m.
As well as the food equipment segment, the group operates in sectors comprising test and measurement, automotive, construction, polymers and fluid, welding, and speciality products.
The group’s annual report stated: “The main reason for the higher turnover is due to an increase in royalty revenue of £79m due to additional legal entities being included in the royalty programme. Due to worldwide initiatives aimed at reducing costs through strategic sourcing and by combining businesses this has continued to enhance the operating margins across all segments.”
ITW’s operating profit also soared from £114m in the previous financial year to £157m, a £43m rise, representing a massive 38% increase. This was again cited as being largely due to the additional profit derived by royalty income.
The report further broke down the group’s revenue into its various sectors. As over 60% of its turnover is generated from overseas, these figures represent worldwide custom.
The food equipment sector comprises Foster Refrigerator, Gamko UK, Hobart Equipment Leasing, Hobart UK Cooking, Hobart UK Manufacturing, Hobart UK Service, Hobart UK Warewash. Collective earnings from these companies totalled £203m for 2017, a £26m/15% increase from 2016’s £177m.
This rise was said to be due to increases in goods sold and royalty income.
In terms of UK revenue for all of ITW Ltd’s companies, this was on the up too, rising from £327m to £333m, an upsurge of £2%.
The directors stated in the report: “The company expects the general level of activity to be maintained in the forthcoming year.
“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 60.7% (2016: 55.9%) of the company’s turnover is conducted overseas and therefore the company is exposed to the movement of overseas currencies to the pound exchange rate.
“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.”