JCB has reported an increase in profits last year as strong US sales made up for its exports to Russia ending and faltering demand in the UK and Germany.
The company, one of the largest manufacturers in Britain, said that pre-tax profits rose 44% to £806m last year, up from £558m in 2022, according to a summary of its accounts published on Monday.
Revenues from its diggers, bulldozers and farm equipment increased by 14% to £6.5bn, up from £5.7bn in 2022, as it sold 123,000 products, up from 105,000 a year earlier.
JCB is owned by the Bamfords, one of the richest families in Britain, with wealth estimated at £7.7bn by the Sunday Times. It is run by Anthony Bamford, a Conservative peer who took over the business from his father.
Bamford is among the biggest and most influential Conservative party donors, and has in the past provided money, takeaway meals and a wedding venue to the former prime minister Boris Johnson.
Global construction and agricultural equipment sales fell by 4.3% in 2023, according to JCB’s figures, or by 7%, according to Off-Highway Research, a consultancy that has also forecast declining sales in 2024.
The JCB chief executive, Graeme Macdonald, said sales had been strong in North America and India, where it operates several factories. US infrastructure companies have benefited from increased investment from Joe Biden’s administration. However, faltering activity in the British construction sector and a near recession in Germany threatened to drag on profits this year.
He said: “The full year market outlook for 2024 is less positive, with challenging conditions in the UK and Europe, particularly in Germany, where economic activity has declined sharply during 2024. In the UK, housebuilding activity has contracted, which is having a negative impact on machine utilisation.”
The British company’s increased profits and sales in 2023 came despite its decision to halt sales to Russia, because of Vladimir Putin’s invasion of Ukraine. The Guardian revealed in May that the company had continued to build and supply equipment for the Russian market months after saying it had stopped exports. JCB said, via its lawyers, that those exports were made to fulfil contractual obligations relating to orders made before the invasion.
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Bamford said that the company was in “a strong position for further long-term growth” because of its investment in new products.
He also touted the company’s investments in hydrogen combustion. JCB is betting that hydrogen will allow it to continue to make combustion engines, which it argues work better for off-road applications such as its diggers, which mostly operate on diesel fossil fuel. The combustion of hydrogen mainly produces water, although it can also produce other pollutants.
Bamford’s son Jo Bamford runs a business that hopes to operate hydrogen distribution. He also owns Wrightbus, a Northern Irish bus maker that offers hydrogen-powered vehicles as well as battery and diesel versions.