JCB has reported record revenues for 2018 along with a sharp rise in profitability.
Total revenues for 2018 increased 22 percent to £4.1 billion, while Profit before Interest, Tax, Depreciation and Amortisation increased 31 percent to £447 million. The company’s full accounts were not supplied with the announcement, and have yet to be posted, but based on a similar ratio to last year the £447 million EBITDA would translate to a pre-tax profit in the region of £270 million.
India remained JCB’s largest market in the 40th anniversary of the formation of JCB India, with the company investing heavily to maintain its leadership, spending £65 million on a new facility in Gujarat which is due to open in 2020.
Chief executive Graeme Macdonald said: “2018 was a very strong year for JCB during which the global construction equipment market grew by 18 percent to an all time high of a million machines. JCB outpaced this growth by increasing its sales revenue by 22 percent last year, which was a very significant achievement. However, this growth has now stalled, with many markets softening this year, particularly the Middle East, Turkey, Latin America and India. We continue to make strategic investments in new product development and new manufacturing capacity to ensure JCB is ready to capitalise on future long-term growth opportunities.”
Another strong performance from JCB, although some of the growth will have come from exchange rate gains due to the weakness of sterling. What is increasingly clear is how far sighted the company was back in the late 1970s and since to invest so effectively in India, where it is the market leader in many construction equipment market sectors.
While 2019 might be more of a challenge, as a family owned company with a substantial international footprint, JCB can weather the storm and possibly even make progress as more highly leveraged publicly owned competitors are pushed towards more short term policies.