Sheffield Forgemasters report increased profits despite difficult trading conditions
Sheffield Forgemasters has reported increased profits with strengths in offshore, power generation and defence markets.
With significant pre-planned expenditure on research and development, training and apprenticeships, continued capital expenditure and environmental improvements, the company reported operating profits of £5.4m for the year ending 30 June 2012.
A concentration on improved productivity and added value has led to a turnover totalling £106.8m despite the challenging, weak worldwide market conditions, acute pricing pressures from international competitors and the continuance of the global economic recession.
Prospects for the year ending 30 June 2013 already show progress on last year, with a high level of optimism contract wise.
Tony Pedder, chairman of SFIL, said: “It is very pleasing to report that despite continuing difficult conditions affecting most of our markets, operating profit for the year increased with our turnover remaining virtually unchanged from last year. In the context of the global economy and our industry, this is a very positive result.
“Our strongest markets continue to be the offshore oil and gas, where our project management company, Vulcan SFM Limited has been particularly active and successful in meeting the complex needs of our customers, but power generation and defence sectors are also strong.
“Demand in most of our other markets remained subdued and consequently, margins have remained tight.”
Tony added: “As well as continuing to strive to meet the most complex needs of our customers, we have responded to these challenging conditions by focusing our attention on costs and efficiencies.
“Our senior team has constantly sought to adopt lean manufacturing techniques, supply chain improvements and a sound control environment, to good effect.
“We have also continued to focus our efforts on research and development. We believe it is vital to keep pushing the boundaries of our technology and expertise in order to keep enhancing our reputation as a leader in our field.
“All our research and development activity is now being channelled through our new subsidiary, Sheffield Forgemasters RD26 Limited.
“RD26 will provide services to all our Group companies as well as to third parties. We see this as a rapidly growing part of the Group in the years ahead.”
In a year when SFIL won the European Business Award for Import/Export from more than 15,000 entries, Tony was keen to thank staff for their loyal support and input.
He added: “As ever, the skills of our workforce remain one of the company’s major assets.
“We will continue to invest in enhancing that skill base and this is vital in ensuring that we constantly meet the challenges of what is still, and looks likely to remain for some time, a difficult trading environment for the Group and its competitors.”