Arco: Hull-based safety firm announces return to profit amid transformation plan
Hull-based safety expert Arco has announced that it has returned to profit one year into its major transformation plan.
The company posted pre-tax profit of £1.3m for the financial year, up from a loss of £3.1m the year prior. The turnaround came despite a drop in revenue from £306.7m in 2023 to £288.1m this year.
This also comes a year into the firm’s ‘Destination 2030’ transformation plan.
Guy Bruce, chief executive of Arco, said: “One year into our Destination 2030 plan, we have delivered much of what we set out to do in the initial ‘Fix the Foundations’ phase, with financial results ahead of target.
“Arco today is a stronger and more disciplined business than it was a year ago, with improved margins, a healthier cash position and extended capabilities to serve customers effectively as we execute the next phase, ‘Build for Growth’.
Mr Bruce also warned, however, that the company would face additional pressures due to changes announced in the Autumn Budget.
He said: "While our business is in a strong position, we are mindful of the challenges ahead. The impact of the Government's recent budget will undoubtedly put additional pressure on businesses, including ours.
“As we move into the next phase of our strategy, we will do so in the context of the changing economic environment, seizing opportunities to grow whilst maintaining financial resilience."
His comments come after Chancellor Rachel Reeves announced a rise in employers’ national insurance contributions in the Autumn Budget, as well as a lowering of the threshold at which businesses begin paying the contributions. Her plan will see these rates increased in a bid to balance increased spending in areas including education and the NHS.
In its latest results, Arco achieved its highest gross profit margin in five years, at 23.9 per cent, and ended the year with a net cash position of £3.5m.
The company said its ‘Build for Growth’ plan, which it intends to adopt in 2025, includes plans for the firm to double its investment in a bid to enhance its customer value proposition, website and e-commerce capabilities.
The firm said it also plans to introduce “innovative” new products.
Arco said it is also planning further investment in its Arco Professional Safety Services business, which will see it introduce new facilities and training propositions to strengthen its market position.
The company also plans to look into potential acquisitions in the coming year.
Mr Bruce added: “Focus areas for potential acquisitions have been identified and we’re excited to explore opportunities that present a strong match to those criteria.”
The firm is soon set to begin work on its Arco Discovery Centre in Hull, which will showcase the company’s products and services as well as its product assurance laboratory.
Arco provides specialist products and services related to safety. The company works on sites including those which involve working at height, in confiined spaces, or where there is a need for respiratory services.