Terex are right on the path to a bright future
Terex GB is the American-owned and Northern Ireland-registered company which purchased Powerscreen.
The recent accounts for Terex GB combine two features that make their interpretation less straightforward. The figures reflect the combined effects of the continued trading of the original plant together with the addition of the impact of the acquisition of two other businesses.
The directors' report for Terex GB makes clear that this unit is part of a much larger organisation which means that "analysis using Key Performance Indicators for this company is not necessary or appropriate for an understanding of the development, performance or position of Terex GB business". Early in 2010, a subsidiary in the group, Finlay Hydrascreens (Omagh), was acquired and transferred into Terex.
Terex was further expanded by the acquisition of Atlas Cranes (UK). There is no surprise the business figures for 2010 are not easily compared to 2009 to illustrate trends in underlying business output and profitability.
The trading results in 2009 reflected a major fall in turnover and employment accompanied by a trading and pre-tax loss.
In 2010 the results for the expanded company show a healthy return to more profitable outcomes.
On the basis of the 2010 results, this is now a successful business with an increased turnover but, more significantly, earning pre-tax profits equivalent to 10% of turnover. This ratio is slightly lower than in 2007 and 2008.
Pre-tax profits in 2010 reached £23m which represented nearly 30% of the balance sheet value of shareholders' funds. This was a major recovery from 2009 but was a lower ratio of profit to shareholders' funds than in other recent years.
For the last five years Terex GB has been facing legal proceedings from a competitor in the USA alleging an infringement of a US patent affecting part of a conveyor design.
In December 2010, a US district court determined that there had been an infringement and made an assessment of damages.
Terex GB is continuing to contest this finding and is appealing the verdict in terms of the law and the facts of the case.
In the 2010 report, the case is still unfinished.