Belfast Telegraph

Company Snapshot: Chain Reaction Cycles Ltd

By John Simpson

Chain Reaction Cycles is a new business that has been successfully built up in the last three years.

Based in Ballyclare, it has |established a significant business with a big part of turnover based on e-business relying on internet transactions.

The company retails a range of cycle parts and accessories.

The expansion of turnover |in the last three years has been very impressive and, at the end of 2009, annual turnover was more than treble the figure only two years earlier.

A feature of the sales performance is the large proportion of sales that are sent to other EU countries and, in addition, over a quarter of sales are sent to customers around the world outside the EU. Operating profit margins have maintained levels above 10% every year and with only modest levels of finance from borrowed funds the pre-tax profits have held similar margins.

Given the nature of the business, there needs to be a combination of adequate stock holdings and good access to supplies.

Three years ago, stocks of goods were worth nearly a third of the annual value of turnover.

As the business has expanded, stocks in December 2009 |had risen in value to over £17m but were now just over a fifth of annual turnover.

The increase in turnover from 2007 to 2009 of 240% was alongside an increase in the number |of orders processed which, in |the same period, rose by 200% to over 1.04m. The average value per order had risen slightly from £69 in 2007 to £74 in 2009. The report from the company suggests that there will have been further expansion in 2010. Plans in the company are that it should be active in developing further marketing projects both online and offline.

A promotional link is being developed with the International CRC race team. Consideration |is being given to the introduction of new warehouse facilities to help in the logistics of coping with extra capacity.

Belfast Telegraph