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NEWS
Coromal on comeback trail
Fleetwood boss says struggling caravan division is being turned around following strong orders at shows for new modelsFleetwood Corporation’s caravan brands, which include Coromal and Windsor, might be still in the red, but the Perth-based RV manufacturing business is on a path to break-even or even return to profit in the near future.
That’s the message from Fleetwood Corporation managing director Brad Denison, who spoke in an investor briefing yesterday after announcing the latest half-year results for the ASX-listed company that also manufactures housing for the resources and education sectors.
For the first time, Fleetwood split RV manufacturing from its Camec/Flexiglass parts and accessories businesses when reporting its results. It gave investors a clearer idea of how sales of Coromal and Windsor caravans are going, with the RV manufacturing division losing $8.1 million in 2015/16, off the back of $29.6 million in revenue.
However, Denison said while the caravan business will continue to lose money it should be a lower figure in 2017, as caravan production ramps up off the back of increased orders at major shows in Perth, Sydney and Brisbane this year, and following the introduction of new Coromal models like the Pioneer off-road van and a top-end Princeton slide-out.
“With the exception of the largest operator in the industry Jayco, Fleetwood outsold other manufacturers at all of those shows,” he said.
“This has driven a significant uplift in the company’s order book and production rate has now been increased to meet this additional demand.”
Following other model updates like the new gloss-look Element, he said production has increased from about 12 a week to approximately 25 a week over the past 12 months.
“The production run rate as at is now is double what it was at this time last year,” he said.
Denison admitted that production needed to return to around 35 vans a week before the RV manufacturing side of the business could return to profit.
He said there will be further costs in training new factory staff employed to cope with the increased demand.
“Of 150-odd factory workers about 30 per cent of them are less than three months,” he said.
As well as a recent change in senior management and efforts to expand the dealer network, Fleetwood has also invested in new machinery to create the laminated wall panels for its new, smooth-sided Princeton and Pioneer caravans.
“We have about half a million dollars in machinery to manufacture and cut those panels and it’s not the sort of thing… most of the small manufacturers in Melbourne can afford to do,” he said.
He also promised more innovation, like the massive 4.5m long slide-out available on the top-spec Princeton that he claims is the largest slider on the market.
“There are some more product innovations coming online in the future but those will be more around reducing the cost of manufacture moreso than representing something consumers will see,” he said.
Formerly among the top-three biggest-selling Australian RV manufacturers, Fleetwood has been losing market share since 2011, when its RV division made a profit of $18.2 million.
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Written byChris Fincham
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