North Lincolnshire-headquartered agricultural machinery dealership group Peacock and Binnington has seen sales soar by more than a third as production returned to factories.
The 2020 record revenues of £68.7 million were left in the tracks of 2022’s performance as it generated £88.3 million in the calendar-aligned financial year.
It was 34.6 per cent up on 2021’s £65.6 million as a backlog of orders accumulated during Covid was met by the Brigg operation. Major supply chain issues were felt across the automotive industry and wider manufacturing sector in the wake of the pandemic, with microchip shortages at the fore. It came against a backdrop of increased demand due to Russia's invasion of Ukraine impacting on wheat production.
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The acquisition of a sixth dealership was also credited with supporting the growth, with Franks Curtis of Kirby Misperton added late the previous year, expanding the “geographical influence into North Yorkshire” in a strategic move for the business.
Profits were up 58 per cent at The Old Foundry, from £397,897 to £630.950, with headcount up 16 to 166.
Fourth generation chair Nicolas Peacock, presenting the first results since the loss of his father, Michael, in February, said: “Demand for new machines remains strong. The buoyant used machinery market means the value of part-exchanged machines remains high, coupled with an attractive taxation regime that has helped drive revenue growth. Certainty over the next generation of subsidies and supply chain delays means that farmers continue to order new machinery.
“Company performance remains in line with expectations and the directors are pleased with the company's resilience and remain confident about longer term prospects.”
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Inflationary pressures saw gross profit margin weaken slightly, from 11.1 per cent to 10.8 per cent, but the operating profit margin increased from 1.2 per cent to 1.6 per cent due to the growth of the business. The company, entering its 130th year of trading in 2024, has also insulated against potential further supply chain disruptions, increasing the value of held stock by £2 million to £25 million across the group.
In the strategic report accompanying the results, Mr Peacock said: “The company's fortunes are tied to those of the farming sector, consequently the principal risks and uncertainties surround world commodity prices. The directors consider that the company's focus on providing and maintaining a high quality customer service will enable long term development. Our business structure and close involvement of management ensures we are able to respond quickly to any changes in market conditions. Over our history, we have maximised growth in good years and weathered the downturns, increasing the size of our business as each cycle progresses.
“Given the challenging global economy with supply chain problems and high, persistent inflation, our performance remains strong as our industry has weathered the shocks well so far.”