THE owner of outdoor clothing brand Trespass more than doubled its profits in its last financial year as annual turnover topped £100 million for the first time, accounts filed with Companies House reveal.
Jacobs & Turner, which is owned by brothers and directors Afzal and Akmal Khushi and is based at Kinning Park on the south side of Glasgow, hiked pre-tax profits to £8.895 million in the year to June 24, 2018 from £4.18m in the prior 12 months.
The Trespass owner, which is a designer, wholesaler and retailer of outdoor clothing and related equipment, achieved a jump in annual turnover from £99.4m to £114m and increased its workforce.
The directors of Jacobs & Turner, in their strategic report on the accounts, highlight a boost from “the British weather”, and declare themselves “very satisfied” with the level of pre-tax profit.
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They say: “Undoubtedly, company sales were boosted by the wet summer of 2017 and the subsequent cold winter, culminating with ‘the Beast from the East’.”
The Beast from the East weather system brought freezing conditions and snow to the UK in February and March last year.
Jacobs & Turner’s accounts for the 12 months to June 24, 2018 show a leap in dividends paid to the owners to £4.4 million, from £200,000 in the prior year.
The directors note, taking into account profits and dividends, net assets increased by five per cent during the 12 months to June 24 last year, from £50.6m to £53.2m.
They highlight the benefits of recent investment by the company, noting a fillip to online sales from the development of web operations.
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The directors flag the backdrop of Brexit-related “economic uncertainty” against which the results for the year to last June were achieved, and express their confidence about prospects in spite of UK economic “pressures”.
They say: “The directors are pleased that the programme of investment undertaken in recent years is staring to bear fruit with an excellent group trading performance this year.
“Turnover exceeded £100m for the first time with all divisions achieving revenue growth, and the directors note that the considerable investment in web development is resulting in steady increases in online sales…
“These results have been attained despite the economic uncertainty surrounding the Government’s Brexit negotiations with the EU and the continued volatility in the currency markets.”
The directors highlight the 15% growth in sales. They also declare that gross profit margins were maintained at a “satisfactory level” in spite of the competitiveness of the retail sector and the effect of fluctuations in the value of sterling on the cost of goods purchased.
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They note that gross profitability, at 32.5% in the year to June 24, 2018, was up slightly from 32.1% in the prior 12 months.
Looking ahead, they say: “The directors are committed to further investment in the UK and abroad, and remain positive that profitable growth can still be achieved despite the current pressures on the UK economy.”
Noting manufacturing risks are among factors which could affect performance in the outdoor clothing industry, the directors say: “These include upward pressure on material prices, inflation in foreign labour markets, and the reliability of foreign factories and suppliers. The company manages these risks through careful selection of its suppliers, and negotiation of order quantities and prices.”
The accounts show the firm's average number of employees in the 12 months to June 24 last year was 1,702, comprising 158 office workers, 99 factory and warehouse staff, and 1,445 employees in retail. The total workforce was up from an average of 1,628 in the prior financial year.
Afzal and Akmal Khushi were inducted in 2010 into the Hall of Fame of the Entrepreneurial Exchange, which is now part of Entrepreneurial Scotland.
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