Issue link: https://read.dmtmag.com/i/166113
Komatsu UK Hit Hard by Economic Downturn: Slump puts Digger Maker £13m in Red TRENDS AND TIDBITS Excavator maker Komatsu UK went into the red in its latest accounts, as lack of demand for construction equipment led it to report £13.3m losses for the year. The Birtley firm, a whollyowned subsidiary of Japan's Komatsu Ltd, last year posted a buoyant boost in profits of £5m and healthy turnover of £176m. The financial crisis plunged the sector into depression, leading the company to record a fall in turnover to £140.6m for the year ending March 31, 2013, while average headcount went from 395 to 389. Komatsu makes and sells hydraulic excavators, predominantly for the European market, and the company says competition has been strong. Its annual accounts said: "Demand for construction equipment in the European market has been depressed since the financial collapse of 2008, and competition for market share between the major competitors within the market has been intense. "This has made trading very difficult, which is reflected in the results. Demand within the European market should recover as confidence returns and economic activity recovers, but the extent and pace of such recovery remains uncertain." Losses were influenced by low sales and the impact of the strong yen on the cost of excavator components imported from Japan. To mitigate risk, the company tightly controlled overheads and diversified the product range. In the past financial year, the department hit hardest by job losses was production, with 13 jobs cut, but seven new employees were hired under the heading of "administration and other staff." The emoluments of the highest paid director were £393,000, compared with £329,000 the previous year. The report said: "The current economic conditions create an ele- ment of uncertainty over demand for the company's products and services. "The company's forecasts and projections, taking account of reasonably possible change in trading performance, show that the company is expected to have a sufficient level of financial resources available through current facilities and, therefore, the directors believe that the company is well placed to manage its business risks, despite the economic uncertainty." ● www.thejournal.co.uk, aug 2, 2013 Caterpillar Launches $1 Billion Accelerated Buyback Plan Having completed one share repurchase agreement last month for $1 billion, heavy-equipment manufacturer Caterpillar (NYSE: CAT) announced that it's launching a second round of buybacks, purchasing the stock from Societe Generale, one of the largest European financial services groups. The international financier will immediately deliver approximately 11 million shares based on current market prices. The final number of shares bought back will be based on Caterpillar's volume-weighted average stock price during the period the agreement remains in effect, which is expected to be completed by September. Noting the repurchase of $2 billion worth of stock this year and having raised the company's dividend by 15 percent last month, Caterpillar Chairman and CEO Doug Oberhelman said, "The continued strength of our balance sheet and strong cash flow puts us in a good position to reaffirm our commitment to stockholders, even in the midst of a downturn." In February 2007, the board of directors authorized the repurchase of $7.5 billion of company stock, and in December 2011, it extended the authorization through December 2015. Through the end of the second quarter of 2013, $4.8 billion of the $7.5 billion authorization was spent. ● www.fool.com, July 29, 2013, Rich Duprey Trends continued on page 45 IDA UNIVERSAL September-October 2013 15