Dundee furniture maker JTC yesterday revealed how it returned to the black as it shook up senior management and adopted a new manufacturing strategy last year.
Newly-posted accounts for the 12 months to the end of December show the group, based at Camperdown Works, recorded a pre-tax profit of £14,572 during the period compared to the previous year’s £4.75m loss, a reverse largely prompted by a write-down in goodwill.
Turnover lifted by 3% to £23.94 million compared to the previous year, though average margins fell by just above a percentage point.
The firm praised the impact of its adoption of lean manufacturing principles, but noted that the move meant it had had to make redundancies and incur additional costs. The concept seeks continual improvement, to make work as efficient as possible while cutting waste.
It said the group’s major manufacturing subsidiary, Joinery & Timber Creations (65), underwent a restructuring process which would continue in the present financial year alongside an overall refinancing.
JTC which specialises in fitted kitchen, bedroom and bathroom furniture did not say how many employees had been let go, but did reveal that its monthly average employee numbers fell from 332 during 2012 to 317 during 2013. Of the total, around 200 work in manufacturing roles.
Simultaneously published results for Joinery & Timber Creations (65) revealed costs of the “fundamental organisation” totalled £144,449.
“The 2013 trading year saw changes at senior management level with a resulting change in operating policy,” JTC directors Dougal Chalmers and Gordon Linton said in the documents lodged at Companies House.
“This move to apply the principles of lean manufacturing incurred exceptional costs associated with redundancies and other restructuring elements such as the repositioning of machinery.”
JTC said current trading was in-line with the various markets it serves, but highlighted that like most manufacturers it remains vulnerable to competitors from outside the EU.
The company said its new cost base was already delivering better returns this financial year, while a new Chinese showroom, opened in the spring, has already led it to tender for “significant projects” in the country’s sixth-largest city, Hangzhou.
“The new brands such as Perla wall panels are anticipated to continue to grow, with added margin being achieved on these products,” the directors’ report added.
JTC, which is controlled by the Chalmers family, has previously reserved particular praise for its exporting efforts and chances in the potentially lucrative Chinese market, where it has also partnered with a local distributor.
Its domestic customers include councils, housing associations and other bodies with major accommodation requirements, including the Ministry of Defence, as well as private developers and the retail market.
The group’s 2012 loss followed a £4.6m write-down recorded only as a “permanent diminution in value”.
Dividends of £42,378 were paid to preference shareholders during the current year, prior to the goodwill write-down being agreed.
Total directors’ remuneration rose 28% to £156,750.