Triumph is celebrating 10 years… without making profit

IT’S exactly 10 years since the Triumph production line rolled out its first bike after its revival – the Trophy 1200, which was hailed as the first of a new breed of British superbikes.

The firm was confident it was the first chapter in a new success story. Triumph’s distributor in Germany said it couldn’t get enough of the things. And demand here was expected to be sky-high.

Despite a recession in the industry and the country as a whole, Triumph decided not to advertise its products – because it feared that would create a bottleneck of demand it couldn’t meet.

Dealers, British riders and most of all Triumph itself had high hopes.

But 10 years down the line, has it lived up to those hopes? And what can we expect from Triumph in the next decade?

We looked at Triumph’s profit and loss accounts for the last 10 years, from Companies House, which regulates the finances of limited companies.

The accounts show that Triumph’s sales have grown, but the British firm has yet to show a net profit.

It’s been making a profit on gross figures since 1995, but has still lost millions once operating costs and tax have been deducted.

Our diagram below shows how the company has made net losses year-by-year.

But in that time, the company’s turnover – all the money that comes in before the outgoings are accounted for – has increased massively.

In 1992, turnover was £10.9 million. By 2000 it had soared to £105.9 million.

The investment needed to make this kind of growth has come from company director John Bloor – and his massive construction company Bloor Holdings Ltd.

And financial experts think it’s the source of investment which could ensure the firm carries on growing.

A business strategist, who asked not to be named, said: ” If Triumph had public shareholders, they would probably be beginning to complain by now.

” The TT600 wasn’t a massive success. After that, people would begin to make demands of the firm and the share price could drop.

” But Triumph doesn’t have public shareholders, ” he added. ” The investment comes from Bloor. As long as he’s happy, the firm doesn’t have to worry as much about share prices or whether it’s made a loss.

” And he could continue to invest for years, or as long as it takes for Triumph to

make a profit. ”

But is Triumph’s lack of profit because it is not coming up with the bikes we want to buy? At least if it survives – and the indications are that it will – there will be a chance the firm starts to deliver the kind of machines we all really want.

To provide a comparison with the British brand, look at Aprilia. In 1991, it had little more significance than Triumph to most UK sports bike riders. It made scooters and small-capacity race replicas. But now its bigger bikes are among the most desirable around.

And its figures stack up, too. It’s Europe’s second-biggest bike firm – after scooter giant Piaggio – and turnover has grown from £67 million in 1992 to £350 million in 2000. And riders on Aprilias have won 10 world titles in 125 or 250 GPs.

So why hasn’t Triumph made as great an impact?

No-one from Triumph was available for comment. Bloor rarely gives interviews and wouldn’t talk to us on this occasion, while the firm’s press contacts were always busy whenever we called.

But Steve Lilley, of Jack Lilley Ltd, the country’s leading Triumph dealership, was happy to talk. And he says it’s unfair to compare the two firms.

He said: ” Aprilia was already selling half-a-million scooters a year in Italy. Triumph doesn’t make anything under 600cc. It didn’t have that big home market behind it. It’s had to break into new markets. ”

Lilley also says Aprilia has been aided by the use of other manufacturers’ engines in its bikes, such as the Suzuki RGV250 engine in its popular RS250.

He said: ” Triumph may not have always got it exactly right, but should be respected for using its own engineering. ”

Lilley also says the lack of profit is no cause for concern.

He said: ” The firm has come from zero in the last 10 years. From a worldwide sales point of view, the growth it has achieved is unrepeatable. It’s recreated a great British brand.

” Triumph may not be in profit, but it is creating a worldwide market and that costs money.

” Developing new bikes isn’t cheap. Even one mould for a crankcase costs over £40,000 to produce.

” If the level of investment and growth continues, maybe the firm will continue to make losses until it has established strong markets all over the world. ”

Lilley believes the relaunch of the Bonneville and its forthcoming cruiser-style Bonnie (see separate story) could help it achieve more success in the U.S.

Another factor is the firm’s new factory, which will be operational next year at a new site next door to the old one.

That will have accounted for some of the losses in recent years – but it’s good news for the future as it will have an annual capacity of 50,000 machines.

It took Triumph nine years to build its first 100,000 bikes – soon it will be able to reach that in two years.

And a report from a leading business support and information body suggests Triumph is here to stay.

The Leicestershire Business Link estimates the chance of it folding in the next year are five times less than the average company.

Even if it has made a loss every year since its revival, it looks as though Triumph has plenty of reason to celebrate its 10th birthday.

It could even raise a toast – to the next 10 years.