New contract wins, sustained growth, strategic collaborations and the ‘market repositioning’ of subsidiary companies have helped Newcastle-based Reece Group
to ‘successfully navigate’ the global economic downturn and post strong financial results for the second consecutive year.
The firm announced a group turnover of £62.9 million for the year ending December 2020, with profit before tax up by 31% to over £13.2 million.
The Reece Group employs 389 staff and operates worldwide in the defence and engineering sectors; it is also the holding company for Pearson Engineering, Responsive Engineering and Velocity.
Pearson Engineering, which currently employs 75 staff at the Armstrong Works headquarters, increased turnover to £46.7 million, up nearly 14%, with profits rising to £15.7 million from £10.5 million.
This performance was driven by repeat orders, strategic growth in new overseas markets and several long-term defence projects reaching final production stage.
For Responsive Engineering, which employs 241 staff, a ‘deliberate and strategic shift in activities’ during 2019 resulted in positive results being posted at the start of 2020.
However, a combination of delayed orders and reduced enquiries from the oil and gas sector during lockdown resulted in a loss of revenue, with turnover was down by £2.9 million to £12.7 million with a loss of £3.5 million on the previous year despite targeted efforts to work through the economic downturn and support customers with continuous supply.
The company, which is now embarking on a return to profitability with short and long-term prospects for the defence sector looking strong, continued to invest heavily during 2020 in new ‘state of the art’ equipment to enhance its end-to-end manufacturing capability.
Velocity, the Group’s specialist road repair division, was hit by a sharp reduction in demand, albeit temporarily, due to the direct effects of the pandemic on such businesses. However, jobs were protected; and while all of Velocity’s services were affected, the decrease in enquiries was short-lived with operations in 2021 once again returning to pre-Covid levels.
Reece Group director John Reece said: “The last 18 months have been one of the most unpredictable and challenging periods for any business to overcome, regardless of size or sector, yet we have seen Reece Group successfully weather that storm and come out stronger.
“These are very positive results for the Group given world events and some difficult decisions, and that is down to the sheer drive, commitment and determination of all our staff, individually, at every level and across all companies.
“Additionally, despite 2020 being a most difficult year, our suppliers, both locally and globally, and our customers have also played a key role in supporting the business, working closely with one another collaboratively in partnership to navigate a way through.”