Success despite oil demand & price slump

Leading Hull family business J.R. Rix & Sons Ltd has reported a successful trading year during 2020 despite ‘challenging and uncertain times’ brought about by the global Covid-19 pandemic.Rory Clarke Rix financial results 2020

A slump in demand for petroleum products during lockdown, as well as an accompanying fall in oil prices, resulted in a 22 per cent drop in Group turnover, down from £509.3m in 2019 to £396.8m last year.

Pre-tax profit remained in line with expectations, however, at a healthy £4.7m.

Commenting on the results, Group managing director Rory Clarke said: “Despite obvious turmoil in some of our subsidiaries, we are pleased to announce that, overall, the Group’s activities returned a healthy profit.”

J.R. Rix and Son’s largest subsidiary, Rix Petroleum, sold an average of five per cent less fuel by volume in 2020 compared to the year before, although demand in the retail and commercial and road fuel sectors fell significantly further as the country all but closed.

However, the single biggest factor influencing revenue performance in the 12 months to December 31st, 2020, was the slump in the price of crude oil. The price fell sharply in early 2020 and remained well below the 2019 average for most of the year, only recovering in the winter.

This resulted in Rix Petroleum reporting a drop in sales from £379.4m in 2019 to £304.1m last year.

Mr Clarke commented that 2020 had been a satisfactory year given the clear and difficult challenges the company and wider UK economy had faced adding that Rix Shipping saw a £3.5m growth in turnover last year.

Decreased revenue due to lower oil prices
Mr Clarke said: “Like a great many businesses in the UK and globally, the ongoing Covid situation has impacted on the Group.

“The decrease in revenue is largely attributable to significantly lower oil prices for the majority of 2020, although those businesses most impacted by consumer demand were cars and holiday homes, which benefitted from both government support and from the parent company.

“However, it is by no means all bad news. Some subsidiaries in the Group were relatively unaffected by the pandemic and others benefitted from volatile markets and increased demand.

“Therefore, whereas 2020 was a mixed bag for J.R. Rix & Sons, we feel the business achieved a good result in challenging and uncertain times.”

J.R. Rix & Son’s strategy continues to be one of reinvesting profit into opportunities it identifies through new business development, along with targeted acquisition

Post a comment or leave a trackback: Trackback URL.

Post a Comment

You must be logged in to post a comment.