China’s failure to crack down on the production of copycat versions of the Dyson Air Multiplier, the bladeless fan launched two years ago, has trimmed profits growth at one of Britain’s best-known companies.
The Wiltshire-based manufacturer, founded by Sir James Dyson and best known for its bagless vacuum cleaners, saw turnover rise from £770m ($1.3bn) to £887m while operating profits jumped from £190m to a record £206m in the year to December. Pre-tax profits including exceptionals rose from £164m to £198m.
The trading improvement was achieved in spite of tough high street conditions in many key markets for the first full year of sales of its bladeless fan range, which is proving particularly popular in Japan. Further extensions to its range of vacuum cleaners and progress in marketing its Airblade hand dryer across Europe also boosted turnover.
But Martin McCourt, chief executive of Dyson, said the company’s profits and premium reputation were being compromised by the costs of tackling a wave of fake Dyson products emerging from China. He said that in spite of the issue being raised with the Chinese authorities by Prime Minister David Cameron in recent talks, the situation had not abated.
“We are fighting a rash of Dyson rip-offs – we need the Chinese to toughen up,” said Mr McCourt, who estimated the problem is costing Dyson millions of pounds a year. “When someone makes a rip-off machine, how do you shut them down? They get a small fine and move down the road.”
Although patents for the Air Multiplier were filed in China in 2008, these have yet to be certified, said the company. Meanwhile Dyson has been forced to seek the destruction of reverse-engineered fakes in territories including Germany to protect its brand. Further destruction orders are expected.
Nevertheless, strong trading at Dyson, where its hand dryer and fans are now estimated to account for a fifth of profits, had allowed it to invest in the hiring of an additional 550 from a target of 700 new engineering staff in the UK.
Sir James, who accepted the role of “technology tsar” to the Conservative party in 2009 ahead of last year’s general election, took a dividend of £28m in the year, up from £25m in 2009.Source