Newspaper article The Journal (Newcastle, England)

Firm's Sales Up but Investment Leads to a Loss; REVENUES

Newspaper article The Journal (Newcastle, England)

Firm's Sales Up but Investment Leads to a Loss; REVENUES

Article excerpt

Byline: COREENA FORD coreena.ford@ncjmedia.co.uk

ELECTRIC vehicle component innovator Sevcon has posted a 38% boost in first quarter sales, though heavy investment saw it record a loss.

The Gateshead company, which is listed on the US Nasdaq market, has announced revenues rose to $12.5m (PS10m) in the first quarter of the 2017 financial year, a lift on the $9.1m (PS7.3m) posted in the first quarter of 2016. Sales for the period October to December 2016 were supported by a $5.2m (PS4.2m) boost from the acquisition of Italian battery charging company Bassi.

The company reported a loss of $2.4m (PS1.9m) for the first quarter, compared with a profit of $180,000 (PS144,000) in the first quarter last year, a figure the firm said reflects the signifiant investments it has been making.

Matt Boyle, CEO and president of Sevcon, said: "We remain very bullish about our prospects this year. While we expect challenging conditions in the industrial markets in the near-term, we expect to see further improvement in our on-road business as a result of our strong project pipeline.

"First-quarter revenues increased 38% year over year, reflecting the $5m (PS4m) contribution from our Bassi acquisition, partially offset by lower sales from the industrial side of the business due to a continuation of the challenging macroeconomic headwinds our customers are facing.

"Bassi has performed above our expectations, having reported 33% revenue growth post acquisition compared with the same three-month period in the prior year, and we expect that momentum to continue in the second quarter.

"The operating loss reflects our significant investment in both engineering and sales and marketing personnel to capitalise on our strong and expanding on-road project pipeline. Production revenues from these programs are expected to start in 2017-2018. …

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