Company Snapshot: Schrader Electronics Ltd
Schrader Electronics has expanded quickly and profitably over the last five years.
The manufacturing facility is based in Carrickfergus and is a wholly owned subsidiary of Tomkins Engineering which, in turn, is a subsidiary of Tomkins plc, registered In England.
The main activity of the business is the development and manufacture of remote tyre pressure monitoring systems for vehicles and other related electronic sensing technologies. During 2008 the company was affected by the downturn in the production of motor vehicles which impacted particularly in the USA.
Nevertheless, despite a decrease in export sales to the USA, the company offset this decrease with a significant increase in sales in Europe and the rest of the world. The company has won new contracts with the Ford motor company. Turnover increased dramatically in 2007 and the improvement was retained in 2008 with a further small increase to reach £109m.
Operating profits in 2008 were down by 19% (corrected for a 53 week year) to £8.6m. The decrease is attributed to increases in raw material costs. Pre-tax profits each year are lower than operating profits largely because the company faces the cost of net interest payments which have been just over £2m annually.
Future business prospects are dominated by concerns about the state of global demand for vehicles. In 2009 the American market is expected to decline by up to 25% along with some contraction in Europe. The company assessment is that markets in India and China may increase slowly.
The business review prepared by Schrader reflects the uncertainties of market demand in the immediate future. An indication of the precautions taken is that the group of companies has extended its agreements for substantial credit facilities for the period to May 2012.
Looking further ahead, the European Union has passed legislation that will mean that by 2012 a system of remote tyre pressure monitoring will be required on all new vehicles. This means a major increase in the market opportunities for Schrader.
Research and development programmes are a feature of local activity and last year over £4.2m was charged to the profit and loss account.
Changes in market demand may affect the number of people employed. The average number of employees in 2008, at 858, was 15% higher than a year earlier.
Post-tax profits are usually retained within the business. No dividends have been paid since 2005. Consequently, the balance sheet value of shareholders funds has increased sharply in the last three years.