Pre-tax profits at C&F Tooling fall 41% despite major rise in revenues

Pre-tax profits at Galway manufacturing group C&F Tooling reduced by 41 per cent in 2012 to €3.75 million in spite of a major increase in revenues.

The latest accounts show the group recorded the drop in pre-tax profits from €6.3 million in spite of revenues increasing by 50 per cent from €92.6 million to €138.5 million in the 12 months to the end of December 31st, 2012.

The group was established by Michael Carr and John Flaherty in 1989, and today counts IBM, Ingersoll Rand, Glen Dimplex and Sanyo on its client list. The company's rapid growth resulted in Mr Flaherty being named Ernst & Young Entrepreneur of the Year in 2008.

The C&F group is headquartered in a 180,000sq ft facility at Athenry, Co Galway, and has manufacturing companies in the US, the UK, Germany, the Czech Republic, China and the Philippines.

The main activity of the group is the design and manufacture of machine parts, components and general tool-making for the automotive industry.

It also designs and manufactures wind turbines and renewable-energy solutions.

The number employed last year increased by almost 300 from 1,053 to 1,343.

Underlining the group’s expansion in recent years, the accounts show the group incurred €10.6 million in capital expenditure in 2012. This followed a capital spend of €13.8 million in 2011.

The group has a strong balance sheet with €36.7 million in accumulated profits contributing to shareholder funds of €44.5 million. The group’s cash last year decreased from €6.4 million to € 4 million.

Remuneration, including pension contributions, to the group's three directors, John Flaherty, Christina Flaherty and Paddy Prendergast – who was appointed in April 2012 – increased marginally from €621,345 to €625,653.

The figures show that the group’s operating profits dropped by 38 per cent from €6.77 million to €4.195 million.

The group’s profits were hit last year by €442,976 incurred in net bank interest charges. A foreign exchange gain of €2 million resulted in total post-tax profits amounting to €6.4 million compared to post-tax profits of €4.9 million in 2011.

The sharp increase in numbers employed by the firm last year resulted in staff costs increasing from €22.7 million to €32.5 million.

The vast part of the group’s revenues is generated from “parts”, with the group recording €137 million of its €138 million revenues from this area.

Last year the group’s cost of sales increased by 64 per cent from €47.1 million to €77.4 million, with the group’s administrative expenses increasing from €37.2 million to €55.1 million.