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JLA reveals more details of restructuring

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JLA is focusing on growing market share within its existing core business segments.

Ripponden-headquartered servicing specialist JLA has further detailed what measures it had to take to weather the pandemic’s impact last year.

Within the firm’s recently-published annual report for its JLA Ltd division, which comprises an undisclosed grouping across its catering, fire safety and HVAC markets, the firm revealed how it sprang into action as the Covid crisis unfolded.

CEO Ben Gujral stated: “From the start of the pandemic, JLA made significant changes to working practices to ensure all staff could work in a safe environment. This included the procurement of appropriate personal protective equipment for our field engineering teams to enable them to work safely on customer premises, investing heavily in equipment to enable staff to work remotely, reorganising our office and other workplaces to facilitate effective social distancing at all times, and partnering with a private testing facility so as to provide comfort to customers and colleagues where necessary.

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“Unfortunately, as a consequence of the pandemic we took the difficult decision to restructure the business which involved a redundancy programme. In taking this decision the board took into account the consequences to the business of the restructuring in the long term. The board considered that the restructuring would promote the success of the group in the short and long term, but was careful to consider the interests of all employees when carrying out the restructuring.”

The report also detailed the financial fortunes of the JLA Ltd division, with Gujral analysing: “The company’s key performance target is to grow turnover and profits in the long term. In the year under review, turnover has fallen by 29% to £26.6m (from £37.3m in 2019) due to a reduction in the volume of machines sold as the company reduced its focus in certain areas. The company has continue to invest and develop new product and customer opportunities which it expects to contribute to future growth.”

Likewise, operating losses from this section of the business worsened from £1.7m in 2018-19 to £19.7m in the 12 months the report covered, to 31 October 2020.

The overall group’s financial results, covered under the JLA Midco umbrella, show that in the same period it generated £137.4m in turnover with an operating loss of £17.9m

Gujral further reported on how JLA considered its customers during this turbulent period: “Like any business our customers are a key stakeholder for the group. The pandemic saw an unprecedented number of businesses requesting support and JLA gave due consideration to our customers’ needs where appropriate. We also invested in our service delivery to ensure that we could continue to provide the same level of service to its customers despite the challenges of the pandemic. In addition, the group took various steps to mitigate the impact of Brexit.”

Recent investments included partnering with a nationally recognised logistics business to augment JLA’s supply chain so that it could focus more attention on the needs of its customers. Gujral commented: “This decision was taken to promote the success of the group and will have the benefit of strengthening relationships with our suppliers and our customers in the long term.”

Prior to that, a new ERP system launched on 1 November 2019. “The resultant automation of many of the existing manual processes and improved data attributes, will add further rigour and timely information to the disciplines whilst delivering efficiencies throughout the stock ordering and replenishment cycles in future years,” believes Gujral.

Looking ahead, he concluded: “The board has plans to grow the business significantly, both in terms of revenue and profitability, through organic growth within its existing core market segments and through acquisition.

“JLA has now established a meaningful position within the UK catering, fire safety and HVAC markets through both organic and acquisition-related growth, and intends to use its strong platform to leverage the sizeable opportunities that these markets present.

“The group has considerable financial resources, together with significant forecast cash generation from operations. The directors believe that the group is well-placed to manage its business risks successfully despite the current uncertain economic outlook. The group has also undertaken reverse stress tests of the forecasts assessing what deviation from budget would be required for the group to run out of cash. The stress testing on forecasts show that the group has sufficient liquidity, and mitigating measures available, to continue to operate in the event of a significant economic downturn.

“In view of the assurances made by the directors of the ultimate parent company, and reviewing the group forecasts, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future.”

Tags : businessfinancial resultsfinancialsJLAservicing
Clare Nicholls

The author Clare Nicholls

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