Fluctuating oil price fuels growth

Hull-based J.R. Rix & Sons has reported a 21% rise in turnover in 2018, due to the integration of two new fuel businesses and the fluctuating price of oil.

Rory Clarke

“Our fuel wholesale and distributions operations have reported a solid performance,” said Rory Clarke, managing director of J.R. Rix & Sons

The company saw a significant increase in group revenue from £407m in 2017 to £496m last year as oil prices peaked at key trading times in the year.

Rix Petroleum, the largest business in the Group, accounted for 70% of the growth in group revenue, rising from £304m to £366m.

As well as the rising oil price, the result reflects the impact of two acquisitions – North Yorkshire-based Stones Fuel Oils at the end of 2017, and Wynnstay Fuels, which the company bought in mid-2018.

However, despite last year’s long, cold winter, like-for-like volumes rose just 3.3%, mainly as a result of the new depots coming on stream.

Group pre-tax profit grew by a third, from £5.8m to £7.7m.

“Being a commodity-based business, Rix Petroleum’s turnover is affected by a number of factors, including the cost of raw materials,” said managing director Rory Clarke, who reported a strong trading performance at J.R. Rix & Sons

“When costs go up, the price of product increases in the marketplace, inflating the value of our sales.

“Despite seeing a significant increase in turnover, therefore, the volume of product we sold has only gone up by a relatively small amount, which can be accounted for by some extra sales in the cold snap earlier this year, but mainly due to the acquisitions of Stones Fuel Oils and Wynnstay Fuels.”

 

Other businesses in the Group also performed well during 2018

  • Maritime Bunkering – J.R. Rix and Sons’ marine fuel business – saw a 57% rise in revenue to £60m, due to the fluctuating oil price, the fall of Sterling against the dollar, and some growth in volume sold.
  • Rix Shipping, which manages the Group’s shipping vessels and stevedoring activities in Hull and Montrose, reported a high utilisation rate for its crew transfer fleet serving windfarms in UK and European waters.
  • This, along with a growth in volumes through its Scottish terminal, led to 9% rise in revenue, from £14m in 2017 to £15m last year.
  • The company’s motor division, Jordans Cars, saw a 19% increase in turnover to £30m due to demand in fleet and commercial sales.
  • However, the Fiat dealership, which is based on Witham in Hull, reported an overall decrease in profit as retail sales of new cars were affected by an industry-wide downturn.
  • Holiday home and lodge manufacturer, Victory Leisure Homes, reported a dip in sales, from £27m to £25m, also following industry trends.

“This has been a good year for J.R. Rix & Sons,” added Rory.

“Our fuel wholesale and distributions operations have reported a solid performance, as has our shipping business, and our motor division.

“Our caravan manufacturing operation has seen a slight fall in revenue as a reflection of the decline in retail confidence extending into the leisure home market, so taking that into consideration, the business performed in line with expectations.”

 

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