Sales surge 20% at Gateshead innovators Sevcon

Financial results continue to improve at Gateshead electric vehicle component makers Sevcon

Matt Boyle, President and Chief Executive Officer of Sevcon
Matt Boyle, President and Chief Executive Officer of Sevcon

Electric vehicle innovator Sevcon has posted its sixth successive quarter of sales growth, helping annual sales surge ahead by 20%.

Although based on the Team Valley in Gateshead, Sevcon is listed on the American Nasdaq, on which it has reported its third quarter results showing turnover sales increased to $9.7m (£5.75m) from $8.7m (£5.15m) in the previous year.

Profits came in at $213,000, (£126,000) compared with $293,000 (£174,000) in the third quarter last year, with sterling’s recent strength against the dollar adversely impacting on the bottom line.

For the full year to date revenues now stand at $27.9m (£16.5m) compared with $23.3m (£13.8m).

Profits for the same period are $1.1m (£650,000) compared to a loss of $1.4m (-£830,000) in the first nine months of last year – which included a restructuring charge of $605,000 (£358,000).

Sevcon president and chief executive officer Matt Boyle said: “Our financial results continued to improve in the third quarter of fiscal 2014.

“Sales were up 11% from the third quarter of fiscal 2013, as our business generally tracked global economic trends. We recorded double-digit sales growth year-over-year in both Asia and the United States.

“Our growth in Asia was driven primarily by aerial work platform and on-road vehicle demand in Japan and China, respectively. The stronger sales in the United States largely reflected increased shipments in the on-road sector for hybrid commercial vehicles. We also shipped significant product volumes for four-wheel recreational vehicle applications into US markets.

“Having recorded our sixth consecutive quarter of revenue growth and our fourth straight quarter of growth year-over-year, we are entering the fourth quarter of fiscal 2014 with strong momentum.

“Our technology and applications expertise positions us well to capitalize on the worldwide trend toward electrification of drivetrains and ancillary systems, not only for motor vehicles but in commercial and industrial traction and power applications.

“Looking ahead to the fourth quarter of fiscal 2014, we believe that underlying market conditions will continue supporting our growth.”

A Sevcon electric car
 

Earlier this year Sevcon announced it had signed a new joint venture agreement with a subsidiary of a Chinese Tier 1 automotive supplier, Risenbo Technology.

Operating as Sevcon New Energy Technology, the new joint venture company will market and sell existing and future Sevcon products for on-road electric and hybrid vehicle applications, principally to Tier 1 automotive suppliers in China.

Mr Boyle added: “On the bottom line, the commencement of shipments by our new joint venture company in China will result in us recognizing our share of the related initial business establishment costs, which we expect will reduce Sevcon’s net income for the fourth quarter by approximately $150,000, after tax.”

Last month Sevcon launched a $10m (£6m) rights issue to support its growth ambitions, including possible acquisitions.

Last week Mr Boyle said the company is planning growth in its Team Valley design team, saying the global market is “beginning a meaningful shift towards larger electric and hybrid vehicles, and that inflection point may well be closer than many people think.”

He added: “Put simply, we believe that Sevcon’s future is brighter than ever, and we look forward to reporting further progress in the quarters ahead.”

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