Engineering specialist Sheffield Forgemasters has published financial results for the period to 31 March 2024, highlighting £107 million of investments and £286m in placed contracts.
The company secured orders worth £193 million for the period, more than double its 2023 intake of £72.5m and in the face of challenging trading conditions, marked by a pre-tax operating loss of £3.9 million (2023: loss of £4.4m) against turnover of £100 million (2023: £99.4m).
Accounts show that the company committed £286m to contracts for its £900m recapitalisation programme, which will see the Brightside Lane site transformed through the construction of the UK’s largest open-die Forging Line and a world-leading machining facility.
Chief Executive Officer, Gary Nutter, said: “The 12 months to 31 March saw £107 million of investments into new plant and equipment to recapitalise defence-critical equipment and improve efficiencies, by increasing throughput and reducing incidences of downtime.
“This is in addition to £286m of contracts which have been placed as our recapitalisation programme builds pace. We expect this rate of investment to accelerate over the next three years, which will transform production capabilities on-site.
“The company’s recapitalisation programme is designed to secure long-term sovereign capability for the UK and its allies’ defence needs and will positively affect the company’s delivery performance, as older machinery is replaced, and new facilities are brought online.”
Recent developments include the installation of two new, ultra-large, five-axis vertical turning lathes, which were commissioned in Q1, to reduce bottle necks in the delivery of complex forged and cast components into the UK’s defence programmes.
The company also bought 21 acres of land, with the largest 16-acre plot earmarked for a brand-new machining facility, which will house 17 of the world’s largest and most advanced vertical turning lathes, to support the UK’s future SSN-AUKUS submarine programme.
Headwinds which have affected the company’s performance include high energy costs, increasing inflation, global effects of the Russia-Ukraine conflict and ageing equipment failures, which are being addressed through its radical investment in new plant.
Most of its revenues came from UK Defence orders, with commercial intake down from £38 million in 2023, to £28 million this year.
The business secured new orders from US Defence, steel processing sectors and engineering products and its geographical revenues show UK income of more than £83m, with £6.7m from North America, £2m from non-European countries, and £7.5m from Europe.
Sheffield Forgemasters’ strategic plan includes the development of a highly skilled and diverse workforce, driven by its award-winning apprenticeships programme, which sees approximately ten per cent of the 675-strong workforce in apprenticeships at any one time.
It also features a site-wide flood prevention programme, and a drive to secure commercial sector revenues in renewable energy markets such as offshore wind and civil nuclear power.
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