Exclusive: Ring helps light the way to a boost in profits

Volvox Group, the Leeds-based firm which owns vehicle lighting specialist Ring, made pre-tax profits of £3m, up from £2.14m, after strong performance domestically and in Spain, Holland, Germany and Scandinavia helped it escape the effects of the consumer spending slowdown.

Turnover rose to £39.91m, compared to £36.92m the previous year. Volvox, which was formed when the group was sold to chief executive John Hall in a private equity backed management buyout six years ago, designs, sources and supplies thousands of products, including car lightbulbs, fog lamps, jump leads and torches, through Ring Automotive.

Its customers include high street chains Halfords and Motorworld and many more through its other businesses Van-Line, which supplies products to workshops, BMAC, which makes high-tech lighting for intercity trains and buses, and Arctic Products, which makes plumbing and heating equipment.

Mr Hall said Volvox’s trading had been pushed up by the performance of Ring and Van-Line.

“The two big businesses have grown quite nicely. There are favourable conditions in the marketplace. A lot of products are not discretionary products like a fashion item, they are products people have to buy like car lightbulbs.”

Mr Hall has kept a low public profile since the £12.3m acquisition of Ring group, renamed Volvox, in a deal backed by Lloyds Development Capital, the private equity arm of Lloyds, and Royal Bank of Scotland.

He told the Yorkshire Post, however, that sales since the since the September 30 year-end were up by more than 10 per cent, which would take group turnover over the £40m mark.

“We are looking for significant growth over the next five years. We are investing in the business with more people, new products, new product development and new markets,” he said.

Volvox’s annual report shows a period of expansion despite “challenging economic trading conditions”.

It said: “Strong turnover growth at Ring Automotive Limited and Van-Line Limited was underpinned by the group strategies of continual product offering improvement backed by enhanced customer support...

“All divisions continue to investigate new markets. Arctic Products and BMAC both experienced drops in turnover due to specific market factors, but the group has continued to invest in these businesses, their people and new products in anticipation of market recovery.”

Turnover at Ring rose by 9.7 per cent with export sales up 19.4 per cent. Sales at Van-Line rose 13.8 per cent.

BMAC saw turnover fall by a tenth, however, as capital spending and refurbishment projects were hit by the spending cuts with some major bus operators reducing the size of their fleets.

Arctic was hit by the slowdown in the housing market and a short-term “availability issue” on a key raw material, pulling down turnover by two per cent.

The group made a pre-tax profit of £2.998m, up from £2.135m, and operating profit from continuing operations was £3.151m, up from £2.471m.

Turnover hit £32.83m in the UK, £5.71m in mainlaind Europe, £156,000 in the Middle and Far East, £346,000 in the US and £865,000 in the rest of the world. Each territory saw an increase apart from the Middle and Far East, which suffered a slight dip.

Volvox also increased its workforce by five per cent to 221, Mr Hall said, with many casual staff given permanent positions.

The major stakeholders

The 2005 deal in which the Volvox group of companies was bought from US firm Sun Capital means ownership is spread across several sources.

Lloyds Development Capital, the private equity arm of taxpayer-owned Lloyds Banking Group, has a 42 per cent stake, with John Hall, Volvox chief executive, the principal individual shareholder with 27 per cent. Tony Welham, the finance director, and Dr Keith Pacey, the chairman, own 19 per cent between them with the remaining 12 per cent owned by other members of the management team.

Mr Hall, a former buyer at Asda, has been with Ring and Volvox for more than 30 years.