Record profits crown year of growth at Queen’s paint supplier
Crown Paints Group, the UK and Ireland’s largest independent decorative coatings manufacturer, has boosted profits by almost 200 per cent in its second full financial year under private equity ownership.
The 200-year old Lancashire-based firm is on course to file accounts that will show an EBITDAR (earnings before interest, taxation, depreciation, amortisation and rentals) of £20m on sales of £180m in the year to 31 December 2010. That is in comparison with an EBITDAR of £10.5m generated in 2009, following the buyout of the company from Akzo Nobel in October 2008, backed by Endless LLP.
Despite a continued decline in the UK coatings market following the recession, strong promotional strategies with key customers and a number of new product launches have also enabled Crown Paints to increase UK consumer market share to 19 per cent from 17 per cent in 2009.
The company has credited its market-leading performance in part to strong cost controls implemented during the year, which have generated substantial improvements in operational efficiencies. Strong cash management disciplines and financial controls have also resulted in cash generation of around £20m, which mean that the business is now operating without bank debt and with headroom of around £50m.
Group chief executive of Crown Paints, Brian Davidson, said: “Our size, independence and entrepreneurial culture mean that we have been able to continually adapt throughout the year in response to and anticipation of changing market conditions. This level of flexibility affords us a unique position as a highly competitive challenger brand in a market that is otherwise dominated by large multinationals.
“But cost control measures alone do not drive growth, and we have continued to invest and innovate during the year in order to maintain sales and increase profitability. As well as numerous new product launches, we have also stepped up our global sales and marketing initiatives and invested around £6m in plant, machinery, technological infrastructure and the development of our Crown Decorating Centre network.
“We have also continued to create opportunities for the next generation of manufacturing talent, recruiting 10 young apprentices into the business during the year. In 2011, we plan to expand our apprenticeship programme to include adult apprentices, with a particular focus on individuals who have found themselves out of work for lengthy periods.
“Throughout 2010, we have maintained our core focus on building strategic long-term partnerships with our customers, and have worked hard to improve service levels and limit the cost impact of increases in raw material prices.
“We continue to see growth in demand from overseas markets – especially in the Middle East and Africa, where we are actively pursuing further export agreements on the back of several signed during 2010.
“The next 12 months will continue to present challenges for all manufacturing businesses, but we have a clear strategy for growth and are confident that Crown Paints will continue to thrive despite the economic backdrop. And as with any private equity-backed business, the creation of shareholder value remains a key focus area for all stakeholders within the business.”