Pump manufacturer Grundfos is back in the black thanks to increased sales of a new energy efficient product.
Wearside-based Grundfos Manufacturing Limited, a subsidiary of the UK arm of Danish group Grundfos, saw post-tax profits rise to £869,000 in 2014, following a loss of £809,000 the previous year.
At the time the firm cited costly copper contracts for the losses, which had followed a run of favourable terms on copper. Grundfos uses copper futures contracts — agreements to buy at predetermined prices — to hedge the impact of fluctuating copper.
A report accompanying the accounts said raw materials pricing globally continued to pose a risk to the company.
While the improvement in profitability was described as “significantly better” than 2013, the firm is still behind £4.6m of profit reported in 2012.
The change of Grundfos’ main “circulator product” to an energy efficient pump which adheres to the European Union’s Energy Using Products Directive (EuP) was said to have boosted profitability.
Sales of the item were slow in the first half of 2013 but grew steadily into 2014.
The latest set of accounts filed at Companies House showed turnover had risen 6.9% to £109.9m.
A statement within the firm’s strategic report said: “The future policy of the group is to maintain the growth of coverage and market share by continuing to provide and improve the products and levels of service required by customers.
“The company seeks to achieve these goals by the continued development and improvement of manufacturing methods, pump performance and distribution.”
As part of a group-wide organisation restructure the Wearside operation sold its stock and related trade creditors to Grundfos Operations A/S.
Net assets rose to £6.3m from £5.4m during the period due to control of working capital combined with the improved profitability.
A final dividend per share of 107p was proposed for the year, down from the 237.2p per share paid in 2013.
Lee Carlin, general manager, said: “We are delighted with the results achieved for Grundfos Manufacturing Ltd here at our Sunderland facility.
"The positive results show a continued growth and strong sustainable performance within the key markets of commercial building services, water utilities and the industrial sector.
"The development and growth of our domestic product range with the world famous energy efficient UPS brand has also strengthened over 2014 and shows signs of continued growth into 2015.
"Our longer term strategic development into more Engineered to Order, complex project systems developed exceptionally well through 2014 with a 170% growth on our ‘Packaged’ Engineered systems business, where we continued to deliver project managed solutions into some of the UK’s and Europe’s largest and most prestigious construction and regeneration projects.
"Underlying this is the incredible workforce we have here in Grundfos Sunderland. Their drive and determination to succeed underpins our long-term development and positive contribution the North East’s economy.”