When a company undergoes a reorganization, whatever it might be called--administration, receivership or Chapter 11--it generally heralds the beginning of the end. In most cases, the company comes out the other end of those processes either sold to another company, stripped down, or in extreme cases, completely dismantled.
In that regard, the recent sale of the Lister Petter, the 187-year-old Dursley, England, manufacturer seems to run somewhat against form. Lister Petter has come out of administration, seemingly poised to again become a key global engine and gen-set supplier, but to more limited markets where the company historically had been strong in the past.
Lister Petter was sold in March to the British industrial investment company, IIH. IIH acquired all of Lister Petter (which no longer sports a hyphenated name) with the exception of the new X series of diesel engines, which were acquired by Deutz AG.
With this all behind it, Lister Petter is emerging from administration continuing to build diesel and natural gas engines, generator sets and perhaps most importantly, with a realistic plan for the future. And according to Roland Smith, newly appointed managing director, Lister Petter resumes corporate life with its order book growing and with the company, as currently structured, being profitable.
"While it may surprise some people, our order book on engines, versus 12 months ago is actually up 40%," said Smith, a 40-year Lister employee, most recently as technical director, who was brought back as managing director of the new Lister Petter Ltd.
"In fact, when you strip away all the costs in developing the X range of engines, this business made nearly a 3 million [pounds sterling] (US$5.3 million) profit on 36 million [pounds sterling] (US$64 million) turnover last year," Smith said.
Recapping the events of the last 12 months, Lister Petter UK Ltd. entered into administration, the English term for financial reorganization, in June 2003. Nine months later, the company was acquired by IIH on March 12, 2004.
In strict terms, IIH created Lister Petter Ltd., which acquired the business and assets of Lister Petter UK, with the exception of the X series engines. IIH also acquired RA Lister (Overseas) and as a result the U.S., Indian and French trading subsidiaries; Lister Petter Americas Inc., Lister Petter India and Lister Petter France, respectively.
IIH is somewhat of a new name to these markets and is a company that now becomes significantly larger with the addition of Lister Petter. Smith said that the Lister Petter entities now make up about 300 of IIH's 750 employees and about 50% of its annual turnover.
IIH is an engineering investment company that now is comprised of three primary business groups; industrial engines and power generation (Lister Petter); supply chain management; and engine and drivetrain remanufacturing.
The supply chain management side of IIH includes Sandwell Engineering, which does major component machining. The third part of the supply chain management side is Gearings Foundry, a South African foundry and machining company.
The remanufacturing group of IIH includes Sandwell Power in the U.K. and JFP in China. The remanufacturing side of IIH is especially interesting, rebuilding 5000 engines annually, as well as transmissions, differentials, axles, cylinder heads, crankshaft kits, short block engines and upfitted engines.
The company remanufactures Land Rover, MG Rover, Jeep, Audi, Steyr and Cummins engines and also rebuilds differentials and axles for the U.K. Ministry of Defence.
The new engine manufacturing side of IIH obviously centers around Lister Petter, but also includes Land Rover engines and short block engines, as well as Perkins short blocks through Sandwell Power. IIH new engine production is currently estimated at about 25,000 engines annually.
"Both for Lister Petter Ltd. and for the subsidiaries, we think there is good opportunity to expand the involvement of the Lister Petter brand name in the remanufacture of product, as well as new engine sales," Smith said.
Lister Petter remains headquartered in Dursley, with a management team that includes Smith as managing director, Alan Macleod as sales and marketing director and Pat Comer heading up the aftermarket division. The company is manufacturing engines in Dursley and will also be building engines in India in the near future.
The operations in Dursley had been retooled to primarily assembly operations and that is one of the many things the company is re-evaluating in light of its new ownership.
"We now have access to machine shops and foundries again," Smith said. "So we obviously will evaluate the benefits of those sorts of vertically integrated capabilities and whether it fits for us.
While Deutz bas acquired the new X range of engines, a line of three- and four-cylinder diesel and natural gas engines, Smith said Deutz has granted a limited license to Lister Petter Ltd. for production of those engines for "our traditional markets and standby power products."
