Meiko UK has reported its financial results for the year ended 31 December 2020, which show the extent of the coronavirus impact on the firm.
In the annual report, now publicly available on Companies House, the warewashing supplier posted a turnover of £12.2m for last year, a cut of 37% compared to 2019’s £19.4m.
Operating profit tumbled to a loss too, with the previous year’s £823k falling by 219% to £-979k.
The company’s finance director Peter Barry wrote in the report: “During the year under review, the company continued to develop its core activities. The company had a reasonable year given the economic climate.
“Sterling remained volatile against the Euro for the year but a late Sterling weakness in December resulted in a foreign exchange dip in position. The decrease in sales was in part attributable to a fall in small machine sales, resulting in the company showing a loss before tax for the year.”
In analysing Meiko UK’s prospects, Barry summed up: “Some of the most significant strategic/commercial risks facing the company are as a result of the impact of coronavirus sweeping not only the UK but most countries in the world. The flight to safe haven currencies such as the US dollar and the Euro has seen Sterling fall dramatically in value against these currencies. The resulting devaluation of the Pound has increased pressure on the company’s margins as the majority of the commercial warewashing equipment is purchased in Euros from Germany.
“The weaker Pound continues to impact on the margins on sale of machines during the year as any movement cannot be reflected in the selling price which is set at the beginning of the year. The directors attempt to minimise any adverse effect by the timing of payments using judgement when the rates are most favourable.”
He detailed that the company expected the drop in trading due to forced coronavirus closure of the hospitality industry to affect the first 4 months of 2021’s finances too, but figures were expected to subsequently pick up again.
Furthermore, Barry detailed that the loss in service work in 2020 was mitigated by Meiko UK taking advantage of the government’s furlough scheme. However, the scheme will be wound down on 30 September this year.