Reece Group has announced positive end of year results for 2019 which reflect new contract wins, business growth and advances in product technology.
The North East-based organisation, the holding company for Pearson Engineering, Responsive Engineering and Velocity, has announced a collective turnover of £64.6m for the year ending December 2019.
This is up 48% on the previous year demonstrating continued worldwide demand for its highly advanced defence engineering systems, world-class manufacturing services and innovative, rapid road repair technology over the twelve month period.
Reece Group, which employs over 350 staff across its Armstrong Works facility in Newcastle upon Tyne and sister site in Sunderland, also reported a 42% rise in gross profits, £1m investment in R&D programmes and £120m worth of assets.
The Group also continued to donate to local community-led projects, supporting regeneration in the west end of Newcastle with almost £1m given over the last five years. Through its support of the Reece Foundation, the Group has helped younger generations through STEM-based education programmes that promote qualifications and entry into engineering and manufacturing careers.
Subsidiary company, Pearson Engineering, recorded an increase in turnover to £41m, up from £21m in 2018, due to new business wins and several long-term R&D projects reaching final implementation and production stages. The company, which employs 75 staff at the Scotswood Road site, is predicting another positive year ahead for 2020 with further contracts in the pipeline and new advanced products in development for defence sector clients whose equipment is used in the most extreme and challenging environments.
Responsive Engineering reported mixed results with a trading loss of £2.2m for the 2019 period. However, this has led to a strategic shift of activities and refocus of manufacturing operations over recent months, with management successfully restructuring the company to better align with client requirements. Whilst Covid19 has had an impact on the business this year, the strategic changes implemented will create a more robust foundation from which to move forward, especially in the defence sector markets.
Responsive Engineering continues to work closely with Pearson Engineering, with both companies looking to capitalise on several large defence manufacturing opportunities over the coming years.
Additionally, Velocity saw significant growth in 2018 and maintained this level of activity in 2019. The company achieved its largest machine order to date in 2019 (manufactured at Armstrong Works), and whilst the business was initially impacted by the pandemic in the first half of 2020, prospects remain good with demand rising again over the summer period and pot hole repair being cited as a key commitment by the Government.
John Reece MBE, Director of Reece Group, commented, “Overall, these are positive results for Reece Group as a whole and provide us with a very stable foundation from which to move forward, especially in light of the current uncertainty that surrounds the world economy. We are in a good position and we will look to build on this further as we navigate our way through what has become a challenging time for everyone due to the Covid pandemic.
“The end of year results are testament to the hard work, knowledge and commitment of all our staff as well as the support of our clients, stakeholders and supply chain partners over recent years. 2019 was a very productive year where we made continuous investment in skills, staff, facilities and innovation to help shape the vision for the Group as well as the focus and direction of our individual companies.
“We are at the forefront of a major global industry that is highly competitive but Reece Group is continuing to develop and manufacture advanced, specialist products that are simply world-class. Our roots firmly lie here in the North East and we continue to invest in the region, providing as many opportunities as we can, especially for young people.
“Whilst we are in a good position overall, like all businesses we must be flexible and responsive to a changing and volatile economy. The UK is likely to be in recovery for some time to come and whilst no one can predict what will happen, I believe that we are well placed to weather the storm and any impact that may follow.”