Collectors help the UK government

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If you have always wanted to know how much collectors add to the profit of a mint, here's a clue: £9.7 million on total profits of £8.7 million in the case of the Roayl Mint. In other words, if it weren't for the collectors, the Royal Mint would have posted a £1 million loss. That means that collectors are keeping inefficient mints alive, wchich explains in turn why there are two Mints in the US, but five in much smaller Germany and an unholy number in the euro zone.

Source: IC Wales

Royal Mint gleams again as it coins in big profits
by Sion Barry, Western Mail, Jul 4 2007

THE Royal Mint at Llantrisant has reported a strong surge in profits, following a review of the business which resulted in more than 70 job losses.

For the financial year to the end of March, 2007, it posted an operating profit before exceptional items of £8.7m - its highest level for nine years.

The figure was a significant rise on the previous year's £1.1m.

Retained profit for the year was £1.2m compared to a loss of £1.6m in 2005-06. This result was achieved after charging £6.4m of exceptional items, which related to the implementation of the business improvement programme.

Receiving the annual report, Financial Secretary to the Treasury, John Healey MP said, ?This report records the impressive turn around in performance that the Royal Mint has delivered over the past two years.

"In particular I welcome that the Royal Mint has not just met, but exceeded the financial target I set.

"These achievements demonstrate the Royal Mint's positive response to the challenges it has faced, and are a testament to the dedication and effort of the Royal Mint's staff and management team."

Chairman Mike Davies said that the Royal Mint had achieved its ministerial financial target for the year. "The 12 months covered by this report have seen substantial developments on three fronts," he said.

"The Royal Mint has reported a significant improvement in financial performance, there has been structural change in the way the business operates, and a number of changes among its senior management have been made."

During the year, the Royal Mint launched a business improvement programme, an initiative aimed at modernising the organisation structure and reviewing work methods.

However, as a result, 72 permanent staff are leaving the Royal Mint, either through early retirement or voluntary redundancy. The Mint employs 762 staff.

Chief executive David Barrass said, "I would like to extend to every employee my sincere thanks for their resolve and commitment through a challenging period.

"An important step has at last been taken along the road to recovery, but one year of good results should not deflect attention away from the scale of progress that still has to be made to secure sustained profitability."

The Royal Mint's prime responsibility to supply the UK with circulating coinage was met successfully. The period 2006-07 saw a 12% increase in demand to 1.6bn coins, despite the recent trend which had suggested demand was levelling off.

The Collector Coin business had a very successful year, with significant growth in both the business to customer and wholesale market areas. Profitability increased by 129% over 2005-06, generating a £9.7m contribution compared to ?4.3m in 2005-06.

The circulating coin side of the business also improved significantly with a contribution of £7.3m, up 78% on the 2005-06 results.

Mr Barrass said, "Looking ahead to the next financial year, the Circulating Coin market looks buoyant and order inquiry levels are healthy.

"We expect further growth in the Collector Coin market.

"The next 12 months will see the foundations of a new vision being laid, and making this a reality will be the first step towards building a stronger and sustainable long-term future for the Royal Mint."

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New chief executive brings change of fortune
By Samantha Pearson Published: March 16 2009

Deep in the Welsh Valleys, just behind the medieval town of Llantrisant and down the road from the regional bowel screening clinic is where the real money is to be made nowadays. To be precise, 3.5m UK coins a day.

The Royal Mint, which also manufactures coins for more than 50 countries, was transferred from London in the late 1960s when more space was needed to churn out the country's new decimal currency.

South Wales was picked as it was in desperate need of regeneration following the closure of the region's coal mines. However, while the Mint has manufactured money for more than a thousand years it has not always been profitable.

In the past two decades it has struggled with sluggish production lines, falling demand for commemorative coins and high metal prices.

An overly ambitious £25m investment in technology to produce euros, which never truly paid off, contributed to declining profitability and subsequent periods of loss.

However, its fortunes changed 18 months ago when a new deputy master of the Mint arrived in the valleys. Andrew Stafford took on the role of chief executive and second in command to the Mint's "master" - the chancellor of the exchequer.

For the year to March 2008, profits jumped to £7.2m from £1.2m in the same period the previous year. Turnover climbed from £120.9m to £131.8m and continues to be generated in equal parts from the Mint's three main activities: the production of UK circulating coins, overseas coins and commemorative coins.

Mr Stafford expects continued growth this year, aided by the production of coins to mark the Olympic Games in 2012, which he said would double revenue in the commemorative coin business over the next four years.

Special two-kilo gold coins are also selling well and the Mint has introduced a wider range of gift coins to appeal to the younger generation.

"The key has been identifying new products and markets, expanding our international presence on circulating coins and the third thing is that we've significantly improved the efficiency of the operations here," Mr Stafford says.

Surrounded by barbed wire and Ministry of Defence guards, the 35-acre site could be mistaken for an army barracks were it not for the rusty coins that litter the patchy grass.

Inside one of the largest concrete buildings lies a clue to the Mint's recent success. Alongside shiny 20p pieces, bags of Jamaican dollars are piled up against bulging packets of Malawi kwachas and Sri Lankan rupees.

The Mint is one of the biggest manufacturers of coins for the overseas market, and economic growth in the developing world means demand is rapidly increasing. Of the available market, the Mint produces 15 per cent of all coins and 50 per cent of plated coins.

Revenue from foreign coin production has more than doubled over the past four years, boosted by lucrative contracts in Egypt and Nigeria.

Completed coins or metal discs are either shipped straight away to countries that cannot meet demand in their own factories or stored on site on their behalf.

In the depot referred to as the "treasury", crates of Icelandic krona gather dust alongside shelves piled with dozens of boxes each containing 85,000 pound coins.

Greater efficiency in its core UK coins business is also central to the Mint's success since this market is unlikely to grow further.

"People assume that when there is quantitative easing that must mean you're surely producing a lot more money but demand for coins is actually relatively stable," Mr Stafford says.

Although there is always a pre-Christmas rush for cash, the vast majority of production is to replace coins - mainly one and two penny pieces - that have been lost, stored away in jam jars or have left the country.

Plated coins with steel centres were introduced to reduce exposure to volatile copper prices and, two years ago, the workforce was cut by 200 to just over 700.

Security is also high on the agenda. Closed to the public, the Mint has gained a mythic status in local towns with stories circulating about workers escaping with Wellington boots and flasks packed with pound coins.

To guard against the darker side of human nature, at the entrance to the Mint visitors must now exchange their coins for plastic ones that can be used in the canteen and then pass through a metal detector on the way out. But counterfeits are on the rise. The Mint estimates more than one in every 50 pound coins is a fake but says it is working on ways to make the coins harder to copy.

Source: Financial Times

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U.K.'s Royal Mint Workers Protest Against Privatization Plans
By Thomas Penny

Oct. 21 (Bloomberg) -- Workers from the U.K.'s Royal Mint will lobby lawmakers today to protest proposals to privatize the coin maker that's based in Llantrisant, Wales.

Members of Unite will tell members of Parliament that the mint, which according to its annual report paid a dividend of 4 million pounds to the government last year, should be kept in public hands, the union said in an e-mail.

The U.K. Treasury included plans for privatization of the mint in its Operational Efficiency Program report in April after it was identified as one of nine government assets that should be considered for sale. "There is a strong case for the introduction of private capital into the Royal Mint," to allow it to expand, the report said.

"The private sector cannot be allowed to coin in on Royal Mint's profits," Kevin Coyne, a national officer for Unite, said in the statement. "It's in the best interests of the country and Royal Mint to keep the nation's silver in the public purse."

Source: Bloomberg

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Kevin Coyne Thomas Penny Is someone pulling my leg?

Peter