JT Dove hopes relocation will help boost sales
Aug 26 2010 by Chris Knox, The Journal
ONE of the region’s largest building materials suppliers saw a 20% reduction in sales but says it is confident it can bounce back following a major relocation programme.
New results from Newcastle-based JT Dove saw its turnover drop from £30.7m to £24.6m in the 12 months to December 31, 2009.
This saw it record a pre-tax loss of £680,000, down from a £385,000 profit in the previous year.
The firm said it was forced to “reduce manpower significantly” during the period in order to protect the business, with its workforce dropping from 188 to 156 – allowing it to slash payroll costs by £1m to £3.9m, including pension liabilities.
As well as highlighting the ongoing downturn in the construction sector for the fall in sales, the firm also said the completion of a major relocation and expansion plan, begun before the recession, had also affected its cost base.
As well as opening three standalone plumbing and heating sites at Ashington, Birtley and Newburn, the relocation programme also included moving its head office from behind Newcastle’s Central Station to Newburn Haugh industrial Estate on Riverside Way in Newcastle.
The company now operates from 12 sites that encircle the major towns and cities of the North East, a model which it believes allows it to be more responsive to its customers, rather than handling orders through its former Newcastle head office.
The firm also said it was breaking even in the last quarter of 2009 and believes this will continue for the rest of the year.
The directors report published with its results firm says: “We believe our new openings will take advantage of the plumbing and heating sector quickly. Plumbing and heating has not suffered as much in the recession. These businesses will make maximum use of our freehold assets.
“Whilst the timing of moving branches was not ideal we had no real alternatives to the relocation.
“Each new sites takes at least an 18- month lead in time to complete, thus there was no sign of the depth of the downturn at the inception of these projects.”
Although the company saw a rise in bad debts and debt collection costs, up 27% at £318,000, it said it had a strong balance sheet, with shareholder funds of £9.8m.
The report added: “The business is in ideal shape to take advantage of the upturn, with ten out of 11 sites, accommodating our 17th profit streams, either relocated or refurbished.
“Whilst trading conditions remain difficult we are confident the business is in better shape than when it entered the recession.
