Hi-fi manufacturer Linn promises research increase to target web content
LINN Products, the Scottish hi-fi manufacturer, will raise its investment in research and development this year as it adapts to a converging marketplace with more audio and visual content delivered via the web.
The firm, which has gained iconic status in high-end audio with its line-up of music streaming devices, turntables and loudspeakers, said R&D investment in the current year was likely to exceed the £2.1 million spent in the past 12 months as it widens its product line-up.
Managing director Gilad Tiefenbrun said the company was committed to design and manufacturing in Scotland, where it employs more than 160 people at its Renfrewshire plant.
“This business survives on innovation and so investment in R&D is absolutely critical. That investment tends to go in one direction – we have to keep up the momentum.”
He added: “We started as a mechanical engineering company building turntables and loudspeakers but have since added electrical and software engineering. The latest addition to the skills set is the web, which is increasingly where content is coming from.
“Our extended product line-up can bring together everything in the modern home – music, TV, games and the internet.”
His comments came as the firm, which was founded 40 years ago by Tiefenbrun’s father Ivor, reported a 21 per cent increase in pre-tax profit to almost £2.2m.
Operating profit was up by 17.5 per cent in the year to end of June, while turnover rose by 5 per cent to £17.3m.
Speaking to The Scotsman in April, Tiefenbrun flagged up increases in both sales and profit, marking the fifth year of earnings growth.
The solid financial performance comes against a tough backdrop for the consumer electronics market, where Linn competes at the very top end with its audio systems starting in four-figure territory.
The company went through a sweeping restructuring in 2007 following rising costs, an industry move towards music downloading and a failed succession plan. Scores of jobs were lost and turnover fell from a peak of more than £30m. Linn has since ditched the manufacturing of CD players and built up a strong reputation for its cutting-edge digital streaming technology. Its “DS” music players attract plaudits from every corner of the world’s hi-fi press.
The firm also reported a 7.5 per cent increase in sales at its Linn Records arm – a business that began 30 years ago with a single recording by cult Scottish outfit the Blue Nile.
Downloads now account for more than half of turnover at the division, with eight out of ten purchased at the highest “studio master” quality.
Universal is the latest music publishing giant to partner with Linn Records, offering high-resolution content from the likes of George Harrison, Bob Marley and Tom Petty. The Linn label is home to artists such as Carol Kidd and Claire Martin.
Tiefenbrun said the group’s balance sheet was free of debt.
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