A golden year for Britain’s oldest manufacturer, as annual results reveal a silver lining
26 Jul 2016
The Royal Mint Limited has announced its annual results for 2015-2016, reflecting the highest revenue in the 1,100 year history of the organisation in financial terms. Significant growth in the precious metal trading activities of the company’s Bullion division made a major contribution to this outcome, with increased competitiveness in the US silver market at the core of the success.
Overall company revenue increased by 39% to £360.6m (2014-15: £259.6m), with revenue growth of at least 17% delivered by all three businesses – Circulating Coin, Commemorative Coin and Bullion. The company returned an overall operating profit of £13.1m (2015-16 £11.4m), the highest since the company was vested in January 2010, reflecting an increase of 19% on last year.
Demonstrating consistency of performance, The Royal Mint Limited exceeded all four of its ministerial targets for the third year in a row, operationally. A key ministerial target to achieve 10% return on average capital employed was exceeded - the organisation achieved 17.9% ROACE, which was an increase on the previous year’s 17.0%. The Circulating Coin division achieved its 100% UK on time delivery target for the fifth year in a row.
The Royal Mint Limited saw a rise in Circulating Coin sales by 17% to £124.0m (2014-15 £106.0m), manufacturing some 4.4 billion coins and coin blanks for around 40 countries (2014-15 4.6 billion for 30 countries). In the UK, demand for domestic coinage remained strong, whilst a number of new contracts secured with overseas countries involved transitioning denominations from banknotes into coins.
The Royal Mint Limited’s new High Security Feature, patented technology that has been developed by the company’s in-house research and development team to bring new banknote levels of security to coins for the first time in the world, was fully commercialised and put into operation this year. The feature has been incorporated into the new 12-sided £1 coin that will be introduced into circulation by Her Majesty's Treasury in 2017.
Significant growth in Bullion activities saw revenue increase by 64% to £185.6m (2014-15: £113.5m) and contribution to operating profit increase by 87% to £2.8m (2014-15: £1.5m). Built on a number of different precious metal trading activities, it is the company’s increased share of the US silver market that is at the core of this growth.
Online precious metal trading website www.royalmintbullion.com (launched in 2014 to enable customers to buy, store and sell bullion coins at constantly updated live prices directly from The Royal Mint 24 hours a day, 365 days a year) proved attractive to small and large investors, with nearly 20,000 accounts opened by the end of March 2016.
New bullion products introduced during the year to compliment the organisation’s flagship Sovereign and Britannia bullion coins included Signature Gold, which enables investors to benefit from economies of scale by buying fractions of large gold bars. In another noteworthy development for the division, Signature Gold was one of the Royal Mint gold products to be declared eligible for holding in Self-Invested Personal Pension schemes (SIPPs).
Commemorative Coin and Medals
The organisation’s Commemorative Coin business experienced another strong year with operating profit increasing to £11.0m (2014-15 £7.3m). Revenue rose 27% to £51.0m (2014-15: £40.1m).
The popularity of Royalty-themed commemorative coins produced to celebrate events such as Her Majesty The Queen becoming Britain’s longest reigning monarch (distributed to over 30 countries across the world) and the birth of Princess Charlotte, contributed to the results. Other strong performing themes included characters from the Beatrix Potter coin series – the Peter Rabbit Silver Proof coin sold out in 8 days.
The Royal Mint Experience
The company’s new visitor attraction, ‘The Royal Mint Experience’, was a major focus during the year as the organisation worked towards the opening of the new family-friendly facility in May 2016. The ‘Experience’ offers the public the opportunity to engage in the fascinating world of coins and enjoy a factory tour to see how and where their coins are made.
Adam Lawrence, Chief Executive of The Royal Mint, said: “This has been an outstanding year for The Royal Mint Limited. We have taken a significant step towards our vision to be recognised as ‘the World’s Best Mint’, recording the highest revenue in the 1,100 year history of the organisation in financial terms, and the highest operating profit since the company was vested in January 2010.
“Significant growth in our Bullion segment has without a doubt contributed largely to this success, but we have seen revenue growth of at least 17% in all three businesses – Circulating Coin, Commemorative Coin and Bullion. I am pleased to report too that we have exceeded all four of our ministerial targets for the third year in a row, operationally.
“An exciting addition and a major focus for the team here this year has been the development and completion of our new visitor attraction, The Royal Mint Experience. This will enable us to share behind the scenes access and over 1,000 years of tales and coin technology with the public on a grand scale for the first time”.