Family businesses see buoyant profit growth
Quick decision-making with an eye on long-term success has helped family-controlled companies around the world to flourish, as proven this week with two family businesses reporting strong results.
American truck-making family business Paccar, currently in its fourth generation of family control, posted buoyant fourth-quarter revenues – in fact, the best in its history. Net sales for the last quarter of 2011 were up 58% to $4.85 billion (€3.69 billion) against the same period the previous year, the company said in a statement.
Profits for the quarter also rose at the Pigott family-run business, jumping by 93% to $327.7 million. The firm’s annual sales broke numerous company records too – at $16.36 billion, it was the second-highest figure in its history.
“Paccar’s 2011 financial results reflect the company’s premium-quality products and services, the benefits of geographic diversification, growing financial services and aftermarket business and environmental leadership,” said Mark Pigott, the 58-year-old chairman and chief executive of the family business.
Another American company with strong family links has also posted positive results – McGraw-Hill, often seen as a family business despite the family holding just 4% of company shares, said that fourth-quarter profits rose by almost 40%. The group’s education publishing arm, which will be split into a different company this year to improve performance, also saw a surprising 4% boost in its revenues.
“In 2011, despite challenging market conditions, we recorded the second best year in our history from continuing operations for revenue, operating profit and earnings per share," said Harold McGraw III, chairman, president and chief executive officer of the family-run company.
McGraw-Hill, which operates in the markets and education sectors, announced in September last year that it will split into two public companies to provide better shareholder return and strengthen its market position. The New York City-based business was first established in 1888 by James McGraw and John Hill. Harold is the great-grandson of James.
