The Royal Mint has announced its annual results for 2015-16, reflecting the highest revenue in the 1,100 year history of the organization.
Significant growth in the precious metal trading activities of the company’s bullion division made a major contribution to this outcome with increased competitiveness in the U.S. silver market at the core of the success. Overall company revenue increased by 39 per cent to £360.6 million (up from £259.6 million in 2014-15) with revenue growth of at least 17 per cent delivered by all three businesses: circulating coin; commemorative coin; and bullion. The company returned an overall operating profit of £13.1 million (up from £11.4 million in 2015-16), the highest since the company was vested in January 2010, reflecting an increase of 19 per cent from last year.
Demonstrating consistency of performance, the Mint exceeded all four of its ministerial targets for the third year in a row, operationally. A key ministerial target to achieve 10 per cent return on average capital employed was exceeded; the organization achieved 17.9 per cent, which was an increase on the previous year’s 17.0 per cent. The circulating coin division achieved its 100 per cent U.K. on time delivery target for the fifth year in a row.
The Mint saw a rise in circulating coin sales by 17 per cent to £124 million (up from £106 million in 2014-15), manufacturing some 4.4 billion coins and coin blanks for around 40 countries (compared to 4.6 billion for 30 countries in 2014-15). In the U.K., demand for domestic coinage remained strong while a number of new contracts secured with overseas countries involved transitioning denominations from banknotes into coins.
The Mint’s new High Security Feature — patented technology that has been developed by the company’s in-house research and development team to bring new banknote levels of security to coins for the first time in the world — was fully commercialized and put into operation this year. The feature has been incorporated into the new 12-sided £1 coin that will be introduced into circulation by Her Majesty’s Treasury in 2017.
Significant growth in bullion activities saw revenue increase by 64 per cent to £185.6 million (up from £113.5 million in 2014-15) and contribution to operating profit increase by 87 per cent to £2.8 million (up from £1.5 million in 2014-15). Built on a number of different precious metal trading activities, it’s the company’s increased share of the U.S. silver market that’s at the core of this growth.
Online precious metal trading website royalmintbullion.com (launched in 2014 to enable customers to buy, store and sell bullion coins at constantly updated live prices directly from the Royal Mint 24 hours a day, 365 days a year) proved attractive to small and large investors; nearly 20,000 accounts opened by the end of March 2016.
New bullion products introduced during the year to compliment the organization’s flagship Sovereign and Britannia bullion coins included Signature Gold, which enables investors to benefit from economies of scale by buying fractions of large gold bars. In another noteworthy development for the division, Signature Gold was one of the Royal Mint gold products to be declared eligible for holding in Self-Invested Personal Pension schemes (SIPPs).
COMMEMORATIVE COINS AND MEDALS
The organization’s commemorative coin business experienced another strong year with operating profit increasing to £11 million (up from £7.3 million in 2014-15). Revenue rose 27 per cent to £51 million (up from £40.1 million in 2014-15).
The popularity of royalty-themed commemorative coins produced to celebrate events such as Her Majesty The Queen becoming Britain’s longest reigning monarch (distributed to over 30 countries across the world) and the birth of Princess Charlotte, contributed to the results. Other strong performing themes included characters from the Beatrix Potter coin series; the Peter Rabbit silver Proof coin sold out in eight days.
ROYAL MINT EXPERIENCE
The company’s new visitor attraction, ‘The Royal Mint Experience’, was a major focus during the year as the organization worked towards the opening of the new family-friendly facility in May 2016. The experience offers the public the opportunity to engage in the fascinating world of coins and enjoy a factory tour to see how and where their coins are made.
Adam Lawrence, Mint CEO, said: “This has been an outstanding year for The Royal Mint Limited. We have taken a significant step towards our vision to be recognised as ‘the World’s Best Mint’, recording the highest revenue in the 1,100 year history of the organization in financial terms, and the highest operating profit since the company was vested in January 2010.
“Significant growth in our Bullion segment has without a doubt contributed largely to this success, but we have seen revenue growth of at least 17 per cent in all three businesses – circulating coin, commemorative coin and bullion. I am pleased to report too that we have exceeded all four of our ministerial targets for the third year in a row, operationally.
“An exciting addition and a major focus for the team here this year has been the development and completion of our new visitor attraction, The Royal Mint Experience. This will enable us to share behind the scenes access and over 1,000 years of tales and coin technology with the public on a grand scale for the first time.”