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Family business roundup: Profits drop at Wates Group and Dassault Aviation, while Li & Fung posts strong results

Two European family businesses have posted poor financial results following “another difficult year”, but Li & Fung, a family-controlled trading group in Asia, has fared better.

Two European family businesses have posted poor financial results following “another difficult year”, but Li & Fung, a family-controlled trading group in Asia, has fared better.

In the UK, family-controlled Wates Group said on 26 March that revenues rose by 13% to £1.12 billion (€1.34 billion) in 2011.

However, profit before tax at the British construction group, which was set up by Edward Wates in 1897 and is still fully owned by the founding family, fell to £40.1 million, from £43.5 million in 2010 – a 7.8% decrease.

Non-family chairman and chief executive Paul Drechsler said 2011 was “another difficult year for the construction industry” and added that “an environment of economic uncertainty and a fiercely competitive marketplace” may pose challenges to the company in 2012.

In France, Dassault Aviation, the aerospace company controlled by the eponymous family, also saw its profit plummet.

Operational income at the family business, which released its annual results on 22 March, fell by 39% in 2011 to €377 million, from €591 million in 2010.

Revenues also dropped by 29% to €3.31 billion in 2011, from €4.19 billion the year before.
“This decrease results from a noticeably lower number of business jets deliveries compared to 2010,” Charles Edelstenne, non-family chairman and chief executive of the company, said in a statement.

The group delivered 63 aircrafts in 2011, 32 fewer than the previous year, and said it expected sales to remain at the same level in 2012.

While Wates Group and Dassault Aviation both saw their profits drop, Hong Kong-based Li & Fung said on 22 March its operating profit jumped 22% in 2011 to $882 million (€661.8 million), from $725 million in 2010.

Sales at the family business, which is controlled by brothers Victor and William Fung, rose to $20.03 billion in 2011, up 26% from $15.91 billion the previous year.

The firm, founded by the brothers’ grandfather Fung Pak-liu in 1906, said it expects its three divisions – logistic, trading and distribution – to increase market share in 2012.

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