Andor profits soar five-fold despite a 26% sales fall
A West Belfast manufacturer of scientific digital cameras has reported close to a five-fold increase in pre-tax profits to £11m, though staff numbers are down by 10%.
Andor Technology's sales also fell by nearly 26% from £81.6m to £59.8m in the 12 months to March 2016, while spending on research and development had dropped 50% to £4.6m.
Andor, which employs around 280 people producing camera equipment for industry and academia, was taken over by Oxford Instruments plc for £276m three years ago.
Its latest results relate to a year-long period compared to the 18-month stretch covered in the previous results.
Customers carrying out research claimed the biggest share of its £59.8m sales, at £31m.
And all of its equipment was sold to the UK or further afield, with North and South America accounting for the biggest share at £24m.
The firm, which is based at Springvale Business Park, had been one of Northern Ireland's few listed companies before its takeover by Oxford Instruments.
Economist John Simpson welcomed the growth in pre-tax profits. He said: "This shows that Andor is now operating very successfully following the takeover - and it will propel the firm up the list of Northern Ireland's most profitable companies."
And he said the fall in R&D was a reflection of the different time period covered in the latest accounts. "It is clear that despite the decrease in the R&D spend, the company is continuing to keep a good level of spending - which was one of the original strengths of Andor," he added.
A strategic report accompanying the results said a "more favourable sales mix" had resulted in an increase in gross margin from 48.2% to 48.6%.
And it said spending on R&D was at 8% of turnover. "This investment continues to be strategically important and necessary to retain our competitive advantage," said the report.
Staff numbers over the most recent period had fallen from 317 in 2015 to 284. The company had announced 20 job losses in 2015.
Employee benefit expenses were also down over the period from £22.9m to £14.8m as a result of the fall in job numbers.
Operating profit was well up at £7.7m, compared to £1.5m, while operating margin was at 12.9% compared to 1.9% the period before. The report said: "This margin improvement is as a result of the favourable gross margin plus the reduced operating expenses as noted."
The firm paid £1m in corporation tax at an effective rate of 8.6%, compared to the standard rate of 20%, as the company had benefited from group relief.
And it enjoyed cash balances of £3m, in addition to a bank overdraft of £2.3m.
It has offices in Japan and America.
Its board of directors includes Donal Denvir, who co-founded the company as a spin-off from Queen's University with Hugh Cormicain. However, financial director Kevin Boyd stepped down in April, the report states.
Last year Oxford Instruments reported close to a 5% fall in sales to £361.6m in the year to the end of March. Adjusted profits before tax were £37m.