Profits rise for JCB but firm issues warning

The construction equipment giant says there are "challenging" conditions in the UK housing market

Construction equipment manufacturer JCB has posted a jump in profits for the past year but warned about "challenging" conditions in the housebuilding sector.

The Staffordshire-based firm said its outlook was "less positive" for 2024 as the slowdown in Europe had affected demand for its machinery.

It blamed weaker housebuilding on a surge in interest rates over the past two years, which had affected the mortgage market.

The company's turnover increased by 14% to £6.5bn for 2023, with pre-tax profits rising by 44% to £805.8m for the year.

JCB chief executive officer Graeme Macdonald said the group saw sales grow last year despite the overall global machinery market shrinking.

"North America remains the world's largest market for construction equipment and JCB's sales there grew strongly during 2023," he said.

Business in India - a growing market - performed well, while the UK was largely flat, but the firm increased its share of the market.

"The full-year market outlook for 2024 is less positive, with challenging conditions in the UK and Europe, particularly in Germany where economic activity has declined sharply," Mr Macdonald said.

Housebuilding activity in the UK had "contracted" he added, which was having a "negative impact" on the use of its machines.

However, the firm's chairman Anthony Bamford said JCB continued to invest in new production capacity and product innovation, putting it in a "strong position for further long-term growth".