British furniture manufacturer ercol has seen sales rise for a sixth successive year, although reporting a deficit due to higher costs and an increase in investment.
According to its latest annual accounts for the year ended 31 December 2015, total sales grew by 11% to £16.6m, with turnover now more than £5m higher than in 2009. Ercol stated that ‘it reinvested most of the cash it brought in back into the continuing strategic plan to grow and strengthen the business’.
Ercol indicated that higher timber and carriage costs, with the latter due to the company transitioning its warehousing and delivery operations, higher investment in international sales and personnel all contributed to a decrease in the gross margin, down from 39.4% to 36.4%.
Group EBITDA declined to £348,000, with the group registering a pre-tax deficit of £198,000 compared to its profit of £113,000 recorded in 2014.
Edward Tadros, chairmain of ercol, told Cabinet Maker: “Uncertainty in the UK and world economies remain frustratingly strong but we are determined to continue to push on with the growth and the strength of Ercol for the long term future.
“In 2015 we have made substantial investments in capital projects including new equipment to upgrade our manufacturing capabilities.”