Turnover & profit down, yet Goodyear Dunlop UK sees opportunities for growth

In a year that saw production end at its Wolverhampton site and a fire seriously damage the TyreFort head office building, Goodyear Dunlop Tyres UK Limited experienced lower turnover and profit compared with the year before. Yet while these 2016 results broke no records, the tyre maker remains confident that “the United Kingdom and Ireland market offers segments of profitable growth opportunities that play to the company’s strengths.”

Turnover in 2016 was down 15.0 per cent year-on-year to £228.6 million, while gross profit dipped 23.7 per cent to £24.1 million and gross profit margin declined from 11.7 per cent to 10.5 per cent. Goodyear Dunlop Tyres UK primarily attributes the lower margin to “adverse movements on cost of goods sold.” After an operating profit of £16.2 million in 2015, the company reported an operating loss of £1.8 million last year, with a margin of -0.7 per cent; higher costs related to operational activities were responsible for this change. Profit for the financial year was, at £9.7 million, 13.6 per cent lower year-on-year, and the company’s directors decided against a dividend payment on ordinary shares for 2016.

Looking ahead, Goodyear Dunlop has opted to follow a strategy of focusing on products with a 17-inch rim diameter and above. It calls this strategy “Segment A/B,” and notes that current and near-future demand for high-value-added tyres is “stronger than it has ever been.”