Brompton profits up 35% despite bike industry's "challenging conditions" and "war of attrition" against rip-off rivals

Brompton profits are up a third, the iconic folding bike brand enjoying a "positive year" thanks to a "shift towards more premium products" allowing the brand to maintain revenue growth despite flattening sales, ongoing challenges hitting the wider bicycle industry, inflation and concerns about copycat rivals.

In the company's latest accounts for the financial year to 31 March 2023, Brompton revealed that while the number of bikes sold (91,785) was marginally down on 2022 (when 93,460 were sold), turnover was up 21 per cent on the previous year as pre-tax profits increased by 46 per cent to £10,680,953, resulting in a post-tax profit of £8,685,432, up 35 per cent on 2022.

Mirroring much of the industry's recent messaging about the slow European market — Shimano and Giant both noting low demand and inventory challenges in recent times — Brompton's most successful region for turnover remained outside of the UK and Europe, the rest of the world accounting for just over half of its turnover and experiencing a significant rise from £44,501,450 in 2022 to £64,844,749 in 2023.

The company also noted that exports remain responsible for 74 per cent of sales, the "ramp up of T Line and P Line products launched in the prior year" representing a "shift towards more premium products in the Brompton range" and "enabling the Group to maintain revenue growth in the face of flattening unit sales".

Brompton blamed the two per cent dip in sales on the "challenging conditions in the cycling industry, driven by the wider global economic uncertainty and the market normalising post Covid".

Elsewhere, operating costs were up 26 per cent due to increased staff costs related to the growth of the business, namely the number of employees rising to 805 from 708, while the brand also noted a 43 per cent increase in direct to consumer sales and pointed to its improved website and e-commerce capabilities.

> Brompton goes 12-Speed across most of its range, doubling the number of gears on the classic folding bike

Beyond the economic and industry challenges, Brompton also mentioned the risk of competitor brands selling similar products at lower prices, with the manufacturer stating it will utilise "wider design right protection on future products" and appoint a brand protection agency to identify and act upon intellectual property right breaches.

Last year, CEO Will Butler-Adams detailed the "war of attrition" that the brand was fighting against cheaper brands copying designs across China and Europe. He called the copycat problem "very serious" and explained it takes "four to five years to develop a product or evolve something" only for other manufacturers to move in once it goes to market.

"Whenever you innovate you take risks, you get things wrong, and then the moment you finally put it on the market, all of that innovation, all of that risk, someone comes along and says 'oh, thanks for telling me how to do it, I'm just going to rip you off'," he said.

The latest financial report also highlights the impact of inflation on Brompton, something that is "passed onto customers through price rises". 

> Brompton CEO bemoans "bloody Brexit" for ongoing problems within bike industry

Looking at the company's impact on the environment, Brompton reported its greenhouse gas emissions from operations and supply chain was 18,187 tonnes of carbon dioxide equivalent and suggested almost 98 per cent of carbon emissions take place in its supply chain. The brand also said it is "working to reduce the volume of plastic in customer-facing packaging".

Brompton Bike Hire is cited as one way, on top of customers who buy a bike permanently, its products are helping reduce carbon emissions of local travel, with an estimated 208 tonnes of carbon emissions said to have been avoided by hire bike users avoiding car journeys.

In February, we reported that Brompton's plans for an ambitious new eco-friendly factory and headquarters in Kent were facing further delays after the highways authority raised concerns about the scheme's impact on the local road network and the lack of any car parking facilities at the site.

In the same month, Brompton joined British Cycling and Rapha in urging more police action to prevent cyclists being "systematically targeted by criminals" in violent London bikejackings. Butler-Adams has also spoken out about the need for a crackdown on "poor quality" e-bike batteries before public perception "snowballs into a world of fear" following numerous fires.