Dyson vacuum profits plummet

INVENTOR James Dyson has seen profits almost halve at his vacuum cleaner company. But the entrepreneur, who courted controversy this year when he announced that he was switching production from Britain to Malaysia with the loss of 800 jobs, still managed to pay himself almost £5.5 million.

Accounts just filed show that profits at Dyson Technology, whose multi-coloured cleaners account for a third of the UK market, fell last year from £22.5 million to just £11.5 million, largely because of higher production and administrative expenses.

The poor results forced Dyson to move production of his vacuum cleaners abroad from Malmesbury, Wiltshire. It prompted accusations-that he was turning his back on British industry. Moving the production to Malaysia, where Dyson already produces two of its four vacuum cleaner models, will slash production costs by about 30%.

Announcing the factory closure, Dyson said: 'I agonised over it, particularly because I put so much faith in manufacturing in Britain, but the decision became inevitable when I looked at the facts. No one could have tried harder to make it work in Britain. I feel very sad but we are minnows in comparison with our multinational competitors and we need to make substantial savings to take them on.'

The profits slump has not hit Dyson too hard personally. His salary of £462,000 was only down by £2,000 on the previous year, though as sole shareholder in the company his dividend income fell by £1 million to £5 million. Dyson cleaners are also sold in Australia and Japan and they have just launched in the US market.

About 800 research and development staff are still based in Malmesbury as well as 150 employees who produce the company's innovative Contrarotator washing machine. Last month, Dyson was awarded £4 million in damages after the High Court ruled two years ago that his arch-rival Hoover had infringed Dyson's Dual Cyclone patent.