One of the fenestration industry’s leading manufacturers, Spectus Systems, has posted its strongest financial results in seven years, for the year ended 31st October 2010. Spectus extrudes high quality PVC-U profiles for manufacture into building products for the residential and commercial markets, including windows, doors, conservatories and ancillary products. In a tough trading year for the sector Spectus grew sales in 2010 by £1.3m, reflecting a 4.5% increase in turnover and an operating profit of £2.55m, demonstrating an impressive improvement for the business from recent years of trading.
FY09-10 Performance and Market Context
The company’s managing director, Adrian Ah-Chin-Kow, expands on how Spectus Systems achieved this: “Our financial performance for 2010 was delivered by a focus on developing our product range, generating quality sales leads for our fabricator and installer customers, and subsequently working closely with our customers to close those leads.
“Our UK sales performed particularly strongly, enjoying like for like growth of 4.5%. This is no mean feat, as it’s in contrast to the performance of the UK replacement window market, which is expected to show a contraction of 2.4% as the macro economy continues to dilute consumer confidence.”
Despite ongoing increases to raw material costs in the industry, in some cases exceeding 30%, Spectus Systems also improved its gross margin by realising further improvements in manufacturing and logistics efficiency. Good discipline around working capital management also lead to stock turns increasing and stock holding decreasing by 15%, while debtor days stayed static despite the difficult conditions.
Ah-Chin-Kow explains that in the UK, Spectus Systems will maintain the disciplines and controls that have returned the business to a profitable state: “We will certainly be building on the activities that have begun to deliver sales growth,” he says. “This will see us focus on greater demand creation for our customers, along with the expansion of our product range and the acquisition of new customers. The launch of the Spectrum range of foils, which boasts over 50 colours of foiled PVC-U for use on Spectus profiles, the continued expansion of the Eco-Spec range and a new ancillary catalogue will deliver growth over and above our core profile range. While the market outlook remains uncertain, we feel that the business plan for the year ahead will continue to deliver year on year improvement.”