Arran Isle profits jump a third as housing recovery takes hold

Arran Isle chief executive Robert Barr
Arran Isle chief executive Robert Barr
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Building products supplier Arran Isle saw profits rise by almost a third in 2014, The Yorkshire Post can reveal.

The firm, which was named as one of the fastest-growing privately owned businesses in the country in October, saw underlying operating profit climb 31 per cent to £6.4m.

It is now targeting double-digit growth in 2015 as it continues to invest and capitalises on economic recovery in its key geographies.

Buoyant housing markets in the US and UK have helped drive forward the business, chief executive Robert Barr said.

In addition to new home construction, growing confidence in the economy means more people are moving home in existing properties or considering renovations, he said.

He told The Yorkshire Post: “We’re seeing people have the confidence to decide to do that project that maybe they’ve put off in the last few years: build the extension, maybe replace windows, get better thermal efficiency, get better security.

“We saw that picking up at the back end of 2013 and it has gone well last year. We are cautiously optimistic for the future.”

Total sales rose one per cent in 2014 to £208.7m, up five per cent on a constant-dollar basis.

Around half of Arran Isle’s revenue comes from its US operations, where it produces factory-built housing and fittings for recreational vehicles under its La Salle Bristol brand.

In the Europe, it specialises in architectural hardware - door handles, hinges and locks - through a variety of brands.

It also runs Mila Maintenance, a specialist in servicing social housing properties, and Mila UK, which supplies fittings to window and door fabricators.

The UK accounts for around 38 per cent of sales. It also operates in Ireland, Scandinavia and the Baltics.

The business also reduced net debt by six per cent to £16.1m and boosted return on capital employed by 250 basis points to 13 per cent.

“What pleased me as group chief executive is that we grew earnings, reduced debt and invested significantly for the future at the same time,” Mr Barr said.

The business invested £1m into product development in the year, as well as rebranding its Carlisle Brass business.

It also launched in the Middle East and boosted its headcount to 950 worldwide.

The business was hit hard by the recession, which saw it shed 600 jobs. Mr Barr said Arran Isle has been “cautious” about hiring until there was a clear recovery.

It has focused on employing engineers and technicians in the UK, along with further developing marketing and sales teams and hiring global executives to boost its international businesses.

“We do believe we have the best teams in each of the markets we serve,” he added.

The business, which is predominantly owned by board directors and key staff, is well positioned to make the most of improving markets, Mr Barr said.

“Put together a slightly rising market tide and our own initiatives, we’re looking for double-digit year-on-year growth,” he said.

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Customer service innovation is at the top of the agenda for Arran Isle as it looks to continue its momentum in the coming years.

Mr Barr is aware of the importance of serving customers effectively.

He said: “That focus on service is innovation has helped us to have very long term customers - often we’re working with a customer for over 30 years.”

Its current on-time, in-full delivery is over 95 per cent. In its Mila Maintenance business, 98 per cent of social housing tenants rated it as having done a good job.

Looking ahead, the companies growth will be reliant on its focus on service, including adapting sales channels to meet consumer needs.

Product development will also play a key part. For example, Mila has launched the Pro Secure Hinge, which halves installation time.

“That’s very valuable for our customers,” Mr Barr added.