JCB Reports Record Pre-Tax Profit for 2007

The JCB Group last week announced record pre-tax profits of $374 million on worldwide revenue of $4.5 billion in 2007, making it the most successful year in company history. JCB reported sales of more than 72,000 machines in 2007.

Meanwhile, company officials cautioned that the impact of the credit crunch, combined with rapidly rising commodity prices specifically that of oil and steel, will pose an economic challenge for 2008.

“2007 saw JCB make great progress,” said John Patterson, chairman and CEO of JCB. “It was our best year ever. The outlook for the remainder of 2008 does look challenging, but I believe we are well positioned to adapt to these difficult conditions.”

JCB’s 2007 pre-tax profits were 25-percent higher than the $298 million recorded in 2006. Sales rose by nearly 30 percent above the $3.5 billion achieved in 2006. Machine sales soared to record levels reaching 72,000 units, well above the 2006 peak of 55,000 units.

The company attributed most of its business growth to activity in emerging markets, particularly India, Poland, Russia, Bulgaria and South America. New machines and new product ranges accounted for fully 50 percent of sales growth.

JCB’s share of the world construction equipment market increased from 10.4 percent in 2006 to 12 percent last year. The company retained its position as the third-largest manufacturer of construction equipment by volume. JCB also holds the distinction of being the largest privately owned construction equipment manufacturer in the world.

“Trading conditions throughout 2008 will continue to be difficult because of the credit crunch,” Patterson said. “There are signs that the downturn in the North American market is now spreading to some Western European and other markets. The recent high growth rates in some of the emerging markets also are now showing signs of slowing.”

JCB also announced that Patterson has decided to step down as worldwide CEO to become chairman and CEO of JCB Inc. He will concentrate on developing the business in North America, the world’s largest market for construction equipment. Matthew Taylor, JCB’s chief operating officer, will succeed him as CEO.

Patterson joined JCB in 1971 as a field service engineer and rose through the ranks to become chief executive in 1998. He was promoted to managing director and CEO in 2004. Under his leadership, JCB’s worldwide business doubled over the past four years as the company opened new manufacturing facilities in the U.S., Brazil, India, China and Germany. It was the company’s largest global expansion in its history.

“John Patterson has led the JCB Group through one of the most successful periods in our history, and I’m pleased that he will now focus his attention on our North American business based in Savannah,” said Sir Anthony Bamford, JCB chairman. “The JCB Group is facing some difficult challenges as we enter a period of economic uncertainty. I look forward to the next phase of our growth and development. These changes will help drive that.”

Patterson’s appointment as CEO of JCB Inc. underscores the company’s commitment to the North American market, which remains the largest market for construction equipment in the world. As further testament to the increased focus, JCB has revealed aggressive plans to double its distribution network by 2010, as well as investing in a $30-million project to build a new customer support center to serve as both a parts distribution center as well as a training facility for its North American operations.