John Deere’s UK profit triples as sales soar by almost £100m
The UK arm of John Deere tractors has almost tripled its profit as demand soared for its iconic green farm machinery, according to newly-filed documents.
The division, which is headquartered in Edinburgh, said the year ended October 29, 2023, had yielded “strong” financial results, with its pre-tax profit almost tripling to £11.5m, up from £3.9m in the 12 months before.
Its turnover also increased, hitting just over £758m, up from almost £659.6m in the year before.
John Deere said strong sales had been boosted by increased demand for its products across the board, helping to offset higher import duty costs and inflation.
In a statement published to Companies House John Deere said: “During the year we have continued to see strong demand for equipment – both Agricultural and turf machines as well as parts.
“We have seen a strong increase in our turnover for the year – £758.4m vs £659.6m in 2022, this was an increase of 14.97 per cent.
“On the agricultural side of the business improved profitability from 2023 has carried over into investment in new equipment during the year, the outlook for 2024 is however, less certain, given the fundamental, climatic conditions and the general economy.
“The increase in net profit was due to the increase in turnover and an increase in interest receivable and similar income when compared to the prior period despite higher input cost inflation, increased import duty costs on parts and fluctuations in the exchange rate experienced during 2023.
“There was also a slight reduction in the cost of acquisition – 97.2 per cent vs 97.6 per cent in 2022.
“Underlying trade and turnover however do show significant signs of slowing down when compared to the prior years as outlined above.”
Layoffs at John Deere’s US sites
John Deere’s US parent company is facing backlash over its plans to lay off hundreds of workers as it shifts more production to a newly planned facility in Ramos, Mexico.
The company has shed more than 1,000 employees at its plants in Iowa and Illinois since October 2023 and this week announced it would cut around 600 more US jobs by the end of August.
John Deere said the changes were happening as a result of decreased demand for the products produced at its affected sites, compounded by higher productions, lower shipment volumes and volatile weather impacting customer confidence.
Despite lower production levels, the company’s revenue and profit both grew in the fiscal year 2023.
Its net sales and revenue hit $55.565bn for the year, compared with $47.917bn in 2022. Its net income was $10.1bn for the 12 months, up from $7.1bn in the year before.
John Deere’s US chairman John May said: “Deere’s full-year results can be attributed to the successful execution of our smart Industrial operating model and the value that customers recognize in our industry-leading products and solutions.
“We must also recognize and credit our dedicated employees, dealers, and suppliers, whose hard work and focus have been instrumental to our overall success.”