Tag Archives: Pearson Engineering

News, North of England

Engineering giant, Reece Group, announces positive end of year results for consecutive year

New contract wins, sustained growth, strategic collaborations and the market repositioning of subsidiary companies have helped North East-based Reece Group to successfully navigate the global economic downturn and once again, post strong financial results for the second consecutive year.

The Newcastle firm, headquartered at Armstrong Works, Scotswood Road, has announced group turnover of £62.9m for the year ending December 2020, with profit before tax up by 31% to over £13.2m.

The Reece Group, which employs 389 staff, is a major worldwide player in the defence and engineering sectors, and the holding company for Pearson Engineering, Responsive Engineering and Velocity.

Pearson Engineering increased turnover to £46.7m, up nearly 14%, with profits rising to £15.7m from £10.5m. This was driven by repeat orders, strategic growth in new overseas markets and several long-term defence projects reaching final production stage.

The company, which currently employs 75 staff at the Armstrong Works HQ, continued to invest in its R&D programmes to the sum of £2.1m, ensuring that it remains at the forefront of innovation in its field.

Whilst Pearson had operational challenges to overcome during the 2020 lockdown, this did not result in any significant impact on its financial performance, and outlook remains very strong for the remainder of 2021 and beyond.

For Responsive Engineering, a deliberate and strategic shift in activities during 2019 resulted in positive results being posted at the start of 2020. However, a combination of delayed orders and reduced enquiries from the oil and gas sector during lockdown resulted in, like for many similar organisations, a loss of revenue.

Turnover was down by £2.9m to £12.7m with a loss of £3.5m on the previous year despite targeted efforts to work through the economic downturn and support customers with continuous supply. The company also had the opportunity to support the Government’s defibrillator programmes in 2020.

Responsive Engineering, employing 241 staff, is now actively embarking on a return to profitability with short and long-term prospects for the defence sector looking strong.

The company continues to collaborate with its sister company, Pearson Engineering, to jointly bid for major defence manufacturing projects and support a number of active and planned UK defence programmes. The work is expected to secure employment and retention of key skills across the companies as well as their supply chains, whilst at the same time leveraging the inherent capability of the Armstrong Works facility.

Furthermore, in preparation for growth, Responsive continued to invest heavily during 2020 in new state-of-the-art equipment to enhance its end-to-end manufacturing capability.

Velocity, the Group’s specialist road repair division, was hit by a sharp reduction in demand, albeit temporarily, due to the direct effects of the pandemic on such businesses. However, jobs were protected and whilst all of Velocity’s services were affected, the decrease in enquiries was short-lived with operations in 2021 once again returning to pre-Covid levels.

Turnover for 2020 reached £9.8m with profits at £0.1m, and despite short-term challenges around national driver shortages, future prospects remain positive. The business is now looking to broaden its offering beyond repair into unique, road preservation services.

In contrast, Reece Group took the difficult decision to close its Reece Innovation division in July 2020 as part of strategic growth measures to allow for a more streamlined and efficient operational structure. This managed and reduced risk in order to encourage more long-term benefits across the organisation.

John Reece MBE, Director of Reece Group, commented, “The last 18 months have been one of the most unpredictable and challenging periods for any business to overcome, regardless of size or sector, yet we have seen Reece Group successfully weather that storm and come out stronger.

“These are very positive results for the Group given world events and some difficult decisions, and that is down to the sheer drive, commitment and determination of all our staff, individually, at every level and across all companies. We have some of the very best, highly-skilled people employed at our sites, carving out new opportunities, forging relationships and delivering advanced, ground-breaking products that are simply world-class. They have demonstrated just how important they are to the business. They’re our greatest asset and it’s fantastic to be part of it.

“Additionally, despite 2020 being a most difficult year, our suppliers, both locally and globally, and our customers have also played a key role in supporting the business, working closely with one another collaboratively in partnership to navigate a way through.

“Whilst the financial results are varied in part, there are many positives to take from them and we can continue looking forward with heightened optimism and confidence.

“Reece Group, as a whole, remains an important, major employer here in the North East, and the significant investments made in our R&D programmes and manufacturing plant, both in 2020 and before, have put us in a healthy position to drive the business forward with significant opportunities in the work pipeline ahead.”

The company continues to donate to local community-led projects supporting regeneration in the west end of Newcastle. It has allocated £1m to good causes since its move to Armstrong Works, and through support of its Reece Foundation, the company’s charitable trust, the Group has helped younger generations gain qualifications and entry into engineering and manufacturing careers via its STEM education programmes.

To learn more, visit: https://reece-group.com/

Engineering, News

UK’s Reece Group engineers a positive future with strong financial results

Reece Group has announced positive end of year results for 2019 which reflect new contract wins, business growth and advances in product technology.

The North East-based organisation, the holding company for Pearson Engineering, Responsive Engineering and Velocity, has announced a collective turnover of £64.6m for the year ending December 2019. This is up 48% on the previous year demonstrating continued worldwide demand for its highly advanced defence engineering systems, world-class manufacturing services and innovative, rapid road repair technology over the twelve month period.

Reece Group, which employs over 350 staff across its Armstrong Works facility in Newcastle upon Tyne and sister site in Sunderland, also reported a 42% rise in gross profits, £1m investment in R&D programmes and £120m worth of assets. The Group also continued to donate to local community-led projects, supporting regeneration in the west end of Newcastle with almost £1m given over the last five years. Through its support of the Reece Foundation, the Group has helped younger generations through STEM-based education programmes that promote qualifications and entry into engineering and manufacturing careers.

Subsidiary company, Pearson Engineering, recorded an increase in turnover to £41m, up from £21m in 2018, due to new business wins and several long-term R&D projects reaching final implementation and production stages. The company, which employs 75 staff at the Scotswood Road site, is predicting another positive year ahead for 2020 with further contracts in the pipeline and new advanced products in development for defence sector clients whose equipment is used in the most extreme and challenging environments.

Responsive Engineering reported mixed results with a trading loss of £2.2m for the 2019 period. However, this has led to a strategic shift of activities and refocus of manufacturing operations over recent months, with management successfully restructuring the company to better align with client requirements. Whilst Covid19 has had an impact on the business this year, the strategic changes implemented will create a more robust foundation from which to move forward, especially in the defence sector markets.

Responsive Engineering continues to work closely with Pearson Engineering, with both companies looking to capitalise on several large defence manufacturing opportunities over the coming years.

Additionally, Velocity saw significant growth in 2018 and maintained this level of activity in 2019. The company achieved its largest machine order to date in 2019 (manufactured at Armstrong Works), and whilst the business was initially impacted by the pandemic in the first half of 2020, prospects remain good with demand rising again over the summer period and pot hole repair being cited as a key commitment by the Government.

John Reece MBE, Director of Reece Group, commented, “Overall, these are positive results for Reece Group as a whole and provide us with a very stable foundation from which to move forward, especially in light of the current uncertainty that surrounds the world economy. We are in a good position and we will look to build on this further as we navigate our way through what has become a challenging time for everyone due to the Covid pandemic.

“The end of year results are testament to the hard work, knowledge and commitment of all our staff as well as the support of our clients, stakeholders and supply chain partners over recent years. 2019 was a very productive year where we made continuous investment in skills, staff, facilities and innovation to help shape the vision for the Group as well as the focus and direction of our individual companies.

“We are at the forefront of a major global industry that is highly competitive but Reece Group is continuing to develop and manufacture advanced, specialist products that are simply world-class. Our roots firmly lie here in the North East and we continue to invest in the region, providing as many opportunities as we can, especially for young people.

“Whilst we are in a good position overall, like all businesses we must be flexible and responsive to a changing and volatile economy. The UK is likely to be in recovery for some time to come and whilst no one can predict what will happen, I believe that we are well placed to weather the storm and any impact that may follow.”