Birmingham manufacturer Thomas Walker (WKT) is retaining a strong outlook despite reporting a reduced pre-tax profit due to the harsh economic conditions impacting on its main markets.
The Kings Norton company, which makes garment fasteners, identity badges and stampings, had endured a difficult six months to the end of December which saw it incur losses.
However, an encouraging start to 2008 led to a significant recovery, resulting in an operating profit of £203,000 for the full year, compared with a profit of £840,000 last year. Pre-tax profit fell to just £3,000, compared with £651,000 last year.
In its results statement, the firm said: “All the markets in which the group operates are likely to continue to be influenced by ongoing financial uncertainty.”
Nevertheless, the board said it remained “confident that the fundamentals of our operations remain sound and that the group is well positioned to take advantage of any possible developments in market conditions”.
The company has seen severe downturns in both garment sales and in the plumbing trades allied to housebuilding.
Its stamping business, TW Stamping, benefited from a new management team being appointed in December 2007 but the operation suffered a setback last month with the announcement of more than 100 redundancies at its major supplier, Aldridge-based Bolton Brass.
Managing director Bill Good said: “It was a blow to us but we were prepared and we have lined up alternative suppliers. This has now given us an edge because we are in a position to continue supplying brass products whereas our competitors might not be.
“We can also supply in smaller volumes and give speed of delivery, which is useful because it means customers don’t have to hold large stocks. We think there is definitely an advantage in being able to buy locally.”
This was just one instance where the decline in the economy had presented the firm with new opportunities, said Mr Good.
“We are staying positive and believe there are a lot of opportunities out there for firms like us.
“We hare prudent certainly and have had to conserve cash where we can, however, we are prepared to invest in new machinery so that when the markets pick up again we are well positioned to benefit,” he said.
The company is also looking to the emerging markets of China and elsewhere to provide future growth, especially in the garment sector.
The firm said that the decline in clothes sales had subsequently reduced demand for accessories. It said that for this reason, year-on-year sales in its hook and bars operation and fallen significantly.
However, sales of its identity badges, a business which developed from its manufacture of the fasteners for mens braces, were strong, especially in the second half.
The company has also recruited a new sales manager to develop this part of the business.
For the group as a whole, sales for the year to June 30, 2008 were £9.2 million, down slightly on last year’s figure of £9.89 million.
Despite the challenging trading conditions and the difficulties experienced in the first half of the financial year, net debt was reduced to £2 million by the end of June, this compared to £2.2 million by the end of the same month last year.
The AIM-listed company declared a final dividend of 1p per share, maintaining the total dividend at 1.5p per share.
Shares closed down 2.6 per cent at 37.5p.