The Royal Mint Limited announces positive results for 2013-14
11 Jul 2014
The Royal Mint Limited has announced its annual results for 2013-2014, reflecting the fact that Britain’s oldest manufacturer has enjoyed a successful year, increasing revenue by 24% to £314.9million and returning an operating profit of £6.7million. A key Ministerial target to achieve 10% return on average capital employed was exceeded as the organisation achieved 10.2% ROACE, a significant improvement on the previous year’s 0.5%.
Circulating Coin
Circulating Coin sales increased by 32% to £101.2m and continued to see strong demand from UK banks and the Post Office for United Kingdom coinage with 1.997 billion coins supplied, and significant success with the overseas business. During the year, more than 2.0 billion coins and blanks were manufactured for 28 different overseas countries. A significant contract award was the multi-year agreement reached with the National Bank of Poland to supply three aRMour® brass plated coins that will significantly improve seignorage of these denominations.
The alloy recovery programme to replace old UK cupro-nickel 5p and 10p coins with new aRMour™ nickel plated steel coins continues to deliver dividends and has returned over £15.7m worth of legacy metal to Her Majesty’s Treasury.
Progress was also made in key strategic areas, including the development of the ‘Integrated Secure Identification Systems’ high-security feature and the ownership of the associated intellectual property rights. This was supported by the announcement by the Chancellor of the Exchequer, the Rt Hon. George Osborne MP, on 19 March 2014, of a new specification £1 coin, which will benefit from the new high-security technology. The ground-breaking nature of this coin security technology is testament to The Royal Mint’s commitment to innovation, a commitment that was recognised by industry experts when the security technology recently won the Wales Quality Centre Product Innovation Award.
Commemorative Coin, Bullion and Medals
The organisation’s Commemorative Coin business also surpassed the previous year of sales by 20% to produce sales of £213.7million. Sales of commemorative coins were driven by a range of new designs, including a special-edition silver proof £5 crown to celebrate the birth of His Royal Highness Prince George of Cambridge, the introduction and sell-out of a first ever UK £20 coin and the first in an annual series of UK Chinese New Year Lunar coins.
This success was supported by significant growth and successes in the organisation’s PR and Social Media channels; an initiative to gift lucky silver pennies to all babies born on the same day as Prince George was launched through PR and managed through The Royal Mint’s facebook page, and achieved over £5m worth of PR coverage, gained 10,000 new facebook fans and supported the organisation’s strategy to grow share of the baby gift market.
Social Media continues to be a hugely influential engagement channel for The Royal Mint, with growth initiated during the 2012 London Olympics maintained throughout 2013-2014, supporting the organisation’s strategy to drive their online business which has seen revenue generated from www.royalmint.com grow by 17% compared to the previous year.
The Royal Mint has continued to see its bullion business grow on a global scale and celebrated a 70% increase in coins sold, in direct opposition to the prevailing market conditions which have seen the global bullion market contract during the same period. This growth has led to an increase in revenue by 61% and gross profit by 44%. In 2013-14 bullion gold sales increased from 109,000 oz to 177,000 oz and silver from 560,000 oz to 2,125,000 oz, helping to position The Royal Mint and its bullion products as a premium proposition in this marketplace.
The organisation’s objective of continuing to develop their medals business also resulted in winning the tender for the production of 120,000 Arctic Star medals and Bomber Command clasps in 2013.
Adam Lawrence, Chief Executive of The Royal Mint said:
“We have exceeded the Ministerial target of a 10% return on average capital employed, and achieved all the other Ministerial targets. This marks a significant improvement on the previous year, and is evidence of the focus we have placed on key strategic areas, such as the high-security technology, the new £1 coin, the Bullion business and the new Lunar coin series. It is also a great credit to every single employee of The Royal Mint, who have all shown great commitment to rising to the challenges we have set the business over the previous 12 months, something that we believe stands us in very good stead for the year ahead.”
As the 1,000 year old business looks to the future once again, in April 2014 The Royal Mint unveiled plans to develop a purpose-built visitor centre at its headquarters in Llantrisant, South Wales, having secured a grant of £2.3m from The Welsh Government contributing towards the estimated total £7.7m cost of the project. Construction is expected to be completed during 2015.