The cost of moving to a new factory and developing an electric version of its iconic folding bike hit the bottom line at Brompton Bicycle Ltd in its latest financial year – but the West London firm says both sales and profits should pick up this year, and that it has no concerns over Brexit.
In the 12 months ended 31 March 2016, underlying profits at the business slipped 40 per cent to £1.3 million, reports the Guardian.
But with the company selling 2 per cent more bikes compared to the previous year, turnover increased by 3.4 per cent to £28.4 million.
That turnover growth was lower than expected, however, due to factors including a worldwide decline in bike sales as well as the increasing importance in northern Europe of e-bikes – a market Brompton will be entering during 2017 through its new model, developed in partnership with Williams Formula 1.
Brompton moved from Brentford to its new factory in Greenford during 2015, officially opened last November by the Duke of Edinburgh. By 2020, the company hopes to be making 100,000 bikes a year there.
CEO Will Butler-Adams sees the United Kingdom’s vote to leave the European Union as being beneficial for the company, which exports 80 per cent of the bicycles it makes.
Already, the fall in the value of sterling following the 23 June referendum has enabled it to reduce prices by 7 per cent in markets outside the UK.
He added that with Brompton targeting the United States and China in particular for growth, uncertainty over the country’s future trading relationship with the EU was “completely irrelevant” and “mostly gubbins for our business.”
Butler-Adams, who described 2015/16 as a “killer year,” said: “We are a little company going through growing pains.
“There are periods in manufacturing where you have got to take a big risk. We went to shareholders before we took them on this rollercoaster … they knew it was coming.”
He said the move to Greenford would result in improved efficiency and expects sales and profit to grow this year, and added that the launch of the electric version later this year would enable it to harness opportunities in a market it is currently absent from.
Simon has been news editor at road.cc since 2009, reporting on 10 editions and counting of pro cycling’s biggest races such as the Tour de France, stories on issues including infrastructure and campaigning, and interviewing some of the biggest names in cycling. A law and languages graduate, published translator and former retail analyst, his background has proved invaluable in reporting on issues as diverse as cycling-related court cases, anti-doping investigations, and the bike industry. He splits his time between London and Cambridge, and loves taking his miniature schnauzer Elodie on adventures in the basket of her Elephant Bike.