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Furniture manufacturer improves margins through factory efficiencies  

Furniture manufacturer ercol has reported a growth in sales as better efficiencies improve margins.

According to its latest filed accounts for the year ended 31 December 2021, total sales rose 15% to £20.2m from £17.5m in 2020.

UK sales were up 16.6% to £18.9m from £16.2m, while EU sales rose 10.8% to £581,000 from £524,000. Rest of the world sales declined 4.5% to £802,000 from £840,000.

Gross profit increased from £4.7m to £5.8m, while pre-tax losses resulted at £443,000, narrowing from a loss of £1.4m recorded in the previous year.

Stated within its report, the company said that gross margin increased from 27.2% to 28.9% despite continuing cost pressures magnified by the supply chain disruption across the economy since the onset of the pandemic.

“Improved gross margin has been achieved with better efficiency in our factory both in terms of personnel costs and use of overheads,” ercol said.

“The company continued to take steps to reduce overhead with administrative expenses decreasing by a further 4.9% during the year. The company reported a positive EBITDA of £248,000 in 2021, which is an improvement on the £825,000 EBITDA loss in 2020.

“The company would have reported an even better EBITDA for 2021 had it not been for £370,000 of extraordinary costs, relating to restructuring, legal costs and finance costs due to the pandemic.”

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