Gateshead vehicle innovator Sevcon speeds back into profit

Motor vehicle controls specialist Sevcon said it is geared up to take full advantage of opportunities, after going back into profit with a growth in sales in its third quarter

Matt Boyle, president and chief executive of Sevcon
Matt Boyle, president and chief executive of Sevcon

Motor vehicle controls specialist Sevcon said it is geared up to take full advantage of opportunities, after going back into profit with a growth in sales in its third quarter.

The Gateshead-based manufacturer, founded in 1969, said total revenues for the nine months ending June 29 are down from last year’s £17.9m, at £15.2m, but the third-quarter sales showed a strong improvement at �5.8m, up from �5.3m in the second quarter and �4.3m in the first three months of its financial year.

The electric vehicle innovator Sevcon, which makes components for on and off-road electric vehicles, reported its results to the New York stock market in an announcement showing an operating profit of �191,000, compared to a loss of �1m for the first half of the year.

President and chief executive Matt Boyle said the business, which employs in excess of 100 people in Gateshead and has factories in China, Mexico and Poland, is now “in the right place at the right time” to seize growing opportunities in the sector.

Although managed in Team Valley, where it employs more than half of its workforce, the firm is listed on the Nasdaq stock market.

After seeing revenues for the year ending September 2012, rise by 10% on the previous year, it then fell victim to the global economic uncertainty prompted by the US fiscal cliff deliberations earlier this year and the poor fiscal situation in Europe in late 2012.

Sevcon president and chief executive Matt Boyle said the company’s traditional off-road business was up, particularly in Asia, despite continued weakness in the global mining sector, but that growth was offset by lower sales in the on-road business, primarily in Europe.

The company said restructuring initiatives were implemented in the second quarter and they are on track to deliver an anticipated �1.3m in operating expense reductions.

Sevcon is continuing to expand its portfolio of relationships with OEM and automotive suppliers in Europe, Asia and North America.

Looking ahead, Boyle said the firm is continuing to expand its relationships with OEM (original equipment manufacturers) and automotive suppliers in Europe, Asia and North America.

In recent months, it has ventured into deals with two Scandinavian vehicle producers to launch new electric vehicles.

It also recently launched a Gen4 DC controller as a more cost-effective option to the successful Gen4 AC controller, which is featured in the Renault Twizy.

Boyle said. “Leveraging our industry-leading technology in close cooperation with our customers, we are continuing to develop new solutions for making electric vehicles safer, more convenient and cheaper to run.

“We believe that Sevcon is well-positioned for the challenges ahead.

“Fundamentally, we are in the right place at the right time with our technology and products and with our expanding portfolio of OEM relationships, although our near-term visibility is cloudier than we would like.

“We are confident that, with our lower cost structure and conservative balance sheet, a more consistent recovery in end-market demand will enhance the operating leverage in our business. We remain committed to growth and improved profitability, and look forward to reporting continued progress toward these goals.”

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