North-based Duco, manufacturer of umbilicals for the subsea industry, has reported a rise in turnover of just over £5.7m in its latest accounts.
The company, based in Walker, Newcastle, and a subsidiary of the Technip Group, also announced pre-tax profits of £2.8m to year-end 2012, its latest reporting period.
Director Christophe Armengol said: “Turnover increased from £87m in 2011 to £92.8m in 2011, however the level of work subcontracted to other Technip umbilical manufacturing facilities increased, so the underlying activity was similar.
“Profit for the financial year increased from £1.4m to £3.3m. Issues reported last year have also impacted 2012 profitability and this under-performance is being addressed.”
Yesterday the company did not wish to comment further on this.
Duco employs around 600 at its Walker Riverside factory where it produces 300km of underwater umbilical cable systems annually.
Last month it reached an agreement with French multinational Technip to deliver a significant £250m contract with oil giant Chevron North Sea Ltd to manufacture subsea technology for a North Sea project.
The company is working on the manufacture of a 28km steel tube umbilical, which is a critical link in the subsea operation as it relays power, communications and chemicals between hydraullic-operated equipment on the seafloor and a platform or support vessel.
Technip’s operating centre in Aberdeen will carry out the majority of the engineering, procurement, installation and construction contract for the Alder field. However, the umbilicals are being manufactured entirely at the Newcastle site, in line with Chevron’s plan to develop the field via a single subsea well, tied back to the existing Britannia platform, a distance of 17 miles.
In 2011, Duco was one of the major winners of a £50m Regional Growth Fund investment in the North East, enabling it to press ahead with expansion at its factory.
Armengol added: “Technip has now approved a major investment in new assets to address a lack of capability in long length and complex steel tube umbilical manufacture in the company and in Technip and this is supported by a grant from the Regional Growth Fund.
“The company has spent £21m to date on the new facility adjacent to its existing premises and completion is expected in 2014.”
The directors do not propose to pay a dividend.