Stadium notches up strong performance
Aug 27 2008 by Graeme King, The Journal
PROFITS at electronics and plastics manufacturer Stadium have seen a 13% surge to £1.4m – and the chief executive says he is on the look out for acquisitions.
Stadium, based in Hartlepool, has been enjoying a strong run in recent times as its business model based on volume manufacturing in China and smaller scale business in the North East bears fruit.
The company has done particularly well in electronics and power supplies, where sales growth has hit 20%, while overall sales have increased by an impressive 16% to just over £23m. Chief executive Nigel Rogers says he is particularly pleased to see growth in Stadium’s UK business, which has been contracting for some time, and that the company is in a strong cash position to deal with whatever state the economy gets into over the coming months – and fund acquisitions.
Stadium now has 130 Hartlepool staff working on hi-tech manufacturing for industrial customers, and more than 1,300 Chinese staff working on larger scale consumer product manufacture.
Mr Rogers said one reason Stadium had prospered in the first half was thanks to talking to customers early on about inflation in energy and material prices.
He said: “This is a solid set of figures. Customer demand has held up well in the first half, compared to the first half of last year. The big issue has been inflation – particularly commodity prices, but we moved very early on that.
“We opened discussions with major customers before this year began. If you look at the latest EEF report, factory gate inflation is at 10%, and producer input costs are up by 25% – so that is the sort of model we have been working to.
“We have driven efficiency right through our business, and where necessary, we have passed on increases to customers – however many of them are now recognising that inflation in material prices is a fact of life.”
Stadium says the trading outlook for its businesses is “satisfactory” and its geographical spread and range of sectors will help insulate it from any wider economic problems.
Mr Rogers said he was pleased with the contribution of SSL as a customer, with Stadium making a large range of its Durex Play products in China.
He said: “SSL has been very successful in the first half of the year. There have been new product launches and good volumes. It’s an important contract for us.
“Our factory in China has been given medical approval under the ISO 13485 standard – approval for the manufacture of medical devices.
“We’ve seen growth in the business at Hartlepool as well. It’s the first time we’ve seen growth in the UK business for a number of years.
“A lot of customers in the UK are choosing to have products made here. The overall cost can be less due to the logistics of going to China for low volumes.”
Mr Rogers was also keen to highlight Stadium’s cash performance, with £1.4m operating cashflow and virtually no borrowings.
He added: “We have balance sheet strength. We can weather any downturn that might come and take advantage of any opportunities at a time when there is better value in the acquisition market.
“We will look for further opportunities both in power and electronics.”
