The publicly-quoted publisher of motor manuals Haynes is to close its US and Swedish bases and axe 41 jobs due to falling demand for print manuals. Decline in demand in the US and Australia has caused the company to suffer from "weak" fourth quarter trading and it now expects pre-tax profit to fall "up to 30%" below the current market forecast of £2.6m at the full-year mark.
As announced in March, the group's chief executive Eric Oakley is to retire at the end of this month and will be replaced by John Haynes Jr, son of the company’s founder. Eddie Bell, who was appointed non-executive deputy chairman in October 2015 to oversee the group’s operational and cost review, has also assumed the role of group executive chairman.
The group said that with falling print manual volumes it is no longer commercially viable for it to maintain its own printing and distribution facility in the US. The publisher will now close its printing and distribution facilities in Nashville, US, as well as its business in Sweden. The closures will lead to the 41 job losses, 17% of the company's workforce. Haynes will now service its Scandinavian customer base from the UK. Despite falling sales in the US and Australia, the company has said that its UK and European businesses are performing in line or ahead of expectations.
Bell said: "The operational and cost review has identified measures which will materially streamline the cost base of the business and ensure that future investment can be channelled to the areas of the group with the greatest revenue and profit growth potential. Whilst today's trading update is disappointing we are confident that the operational changes announced will deliver improved efficiency and sustained profitability in the coming years."
The group said it was its intention to use the "substantial savings" which will accrue to the business from these changes to accelerate the development and marketing of its consumer and professional digital platforms. In March, Jeremy Yates-Round was made consumer managing director and now oversees the group’s Australian operations, worldwide publishing and production.