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Sevcon gets in gear for global drive for green

Thursday, May 9, 2013

THE boss of one of the region's leading electric vehicle companies says the business is turning the corner after what he called a dire start to the financial year. Matt Boyle of Sevcon reported a challenging start to the period, due to falling demand for electric vehicles (EVs), for which his company provides components. However, sales picked up in the past three months and Boyle now expects to capitalise on the global drive for green transport.


He said: "The first quarter was a bit dire; we had a double digit downturn. Quarter two reversed this somewhat. We saw an improvement in demand for electric vehicles. This was more pronounced in the Far East."

MPs this week highlighted the shortage of EV charging points across the UK which, they claim, is holding back the industry. But Boyle said he did not think this played a part in Sevcon's downturn, pointing to the Government's recent investment of £37m towards the cost of installing a charger at a home address anywhere in the UK. He added: "I'm not sure that the shortage of charging points in UK was a contributing factor in the fall of EV sales. Most demand for EVs is in the Far East and Western Europe." He did concede, however, that the UK needs further investment in EV infrastructure for demand to pick up.


Sevcon's half-year results to the end of March 2013 show revenues of £9.5m, compared to £12.2m in the same period last year. Revenues for the second quarter of this period were £5.3m compared to £4.3m in the first three months of its financial year. The manufacturer of electric controllers for on and off-road vehicles suffered from the US fiscal cliff crisis and woes in the eurozone in late 2012 and early 2013. The Team Valley-based company, which is listed on the New York Stock Exchange, recorded a loss of £1m for the half-year period, compared to a profit of £600,000 in the same period last year.


This loss includes a restructuring charge of £400,000 due to personnel reductions and additional structural changes. Sevcon's recent improvement has been reflected in its share price which has climbed 25 % in the last six months and is now at £2.71. President and chief executive Boyle said: "Conditions in both the off-road and on-road segments of our business continue to be very challenging, and product demand remains well below the levels of a year ago. However, the pick-up in order flow that we began to experience in January continued through the second quarter. "We're exporting 99% of what we manufacture and are the sole supplier of controls for the Renault Twizy, which is the third or fourth highest-selling pure electric vehicle in the world. Our lead times and visibility have stabilised, and we were encouraged to see some pockets of end-market strength materialize as the quarter progressed." "Our highest near-term priority is to return Sevcon to profitability."


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