Triumph profit slips despite an increase in global sales

The iconic British manufacturer and latest superbike brand in India, Triumph Motorcycles' turnover has increased to £368.6 million in 2013 from £342.3 million in 2012 and unit sales of motorcycles increased to 52,000 in 2013 from 49,000 in 2012. However, profit of the company decreased when compared to the previous year, due to the global expansion and development of new facilities and products. In line with expectations, due to significant movements in foreign currency and continued planned overseas investments, the operating loss before interest and tax was £0.1 million in 2013 from £15.7 million profit in 2012.

Triumph Group’s overall market share has increased to 6.0% in comparison to the 5.7% in 2012, instead of the global 500cc plus motorcycle market has fallen by 6.4% during the 12 month period to date. In the overall sales, around 80% was from the motorcycles exported globally to the 750 dealers spread in 35 countries, outside UK.

Throughout the year Triumph further invested in Research and Development, maintained manufacturing efficiency. The company also set up assembly plants in Brazil and India this year. All this affected the operating cost for the year adversely by foreign exchange losses emanating from the restatement of foreign currency denominated assets and liabilities, additional net inter group charges and the continuing cost of entry into Brazil and the new entry into India. The cost of planning to produce two new 250cc models in India may have also been a factor in the loss.

However, Triumph’s performance was particularly pleasing in the UK, US and Brazil; its retail market share in the UK increased to 20.1% maintaining its market leading position. During the year the company benefited from an excellent initial first year performance upon entry to the Brazilian market, capturing 3.4% market share. Response from the Indian market is quite good, as the bookings started after the official launch on 28th November, 2013. All these factors shows that it is like an initial investment to expand the business and the company will regain the loss very soon. If everything goes well, the company might show a record benefit in the upcoming years.