Belfast Telegraph

Sales rise at Schrader, but pre-tax profits down by 9%

By Margaret Canning

A Co Antrim manufacturer for the motor industry has reported an 0.8% increase in revenue and production staff numbers following a growth in global sales of cars.

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.

Schrader International, which makes remote tyre pressure monitoring systems and is led by general manager Graeme Thompson, said its sales were up slightly from £337.2m in 2015 to £339.8m in 2016.

Its accounts were filed at Companies House this week as manufacturers in other parts of the county announced hundreds of job losses.

In contrast, staff numbers were up from 1,390 to 1,432 at Schrader, headquartered at Belfast Road in Antrim. During 2016, 155 jobs were added in its production division - however, numbers in selling and distribution dropped from 79 to 13, while there were 47 fewer administration jobs.

And pre-tax profits fell by around 9%, from £61.7m to £56.3m, with the fall partly attributed to one-off costs of £2.3m as Schrader's systems were integrated with those of parent company Sensata. US firm Sensata Technologies bought Schrader in 2014.

A strategic report with the accounts said car sales had grown during 2016 by around 5.6% on 2015, a trend which benefits Schrader sales. "China displayed the strongest growth at 14%, followed by Europe, Middle East and America (EMEA) at 5.6%," it said.

"Growth in North America was more tempered at 1.9%. This was, however, off-set by a 12.4% decline in growth in the South American markets."

But for 2017, it forecast a fall in growth in car sales to 2.4%, with a strong slowdown expected in China.

The company results reveal that around half of its sales were made in the US during 2017, 35% were made in Europe and the remaining 15% in other parts of the world.

Schrader, which is one of Co Antrim's strongest remaining manufacturers following a number of closures, also spent more than on research and development, with spend growing by 3.6% from £16.5m to £17.1m.

The firm said R&D was important "as it continues to develop its remote tyre pressure monitoring systems and related productions, and apply technology to reduce unit and operating costs".

Its capital expenditure also increased by 83% from £9.5m to £17.4m, which the company said was mainly due to expansion of its manufacturing capacity.

But the company said it was under pressure as it operated in "highly competitive" end markets. It responds to pressures by "lean initiatives" and improving its sourcing.

Co Antrim was hit this week by news of confirmation of the closure of oil services firm Schlumberger in Newtownabbey, with the loss of 205 jobs, and the administration of Williams Industrial Services (WiS), with the loss of 145 jobs.

Two weeks ago, energy company AES announced it was to close its power station at Kilroot near Carrickfergus. And the Ballymena area has been hit in recent years by the loss of major employers Gallaher's and Michelin.

But Dr Esmond Birnie, senior economist at Ulster University's economic policy centre, said it was too soon to proclaim the demise of mid and south Antrim as a manufacturing hub.

"Previously some areas, e.g. the former Ballymena council area, had a percentage of their total employment which was in the manufacturing sector which was substantially higher than the Northern Ireland average.

"What we are now seeing is a movement back towards that Northern Ireland average - but this still means there will be a lot of manufacturing businesses in those areas.

"This part of Northern Ireland, like other sub-regions or council areas, need to continue to work out where its competitive advantages might lie and seek to promote those advantages."

Belfast Telegraph

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.