Hertel profits treble as offshoot is sold

Engineering services group Hertel (UK) Ltd more than trebled its profits in a year after disposing of one of its business streams

Annual accounts for the business, at Middlehaven in Middlesbrough, show a 222% rise in profits, from £5.38m in 2011 to £17.35m for the year to December 31, 2012, while turnover also went up by 4.7% to £162m from £155m posted the previous year.

The figures, filed at Companies House, show the Teesside firm has regained good ground on the losses it made in 2011, when competition was very strong and many clients were looking to drive down costs and supplier margins. Hertel (UK) Ltd, owned by Dutch parent company Hertel, said 2012 had seen the continuation of strong competition in the market, with clients very active in their management of supplier margins, and that directors were very happy with the company’s overall performance.

Hertel has been in business 110 years and now provides engineering services, primarily for the marine and offshore sectors, including architectural outfitting, specialist containerised accommodation packages, scaffolding, painting and insulation systems. Last year, it sold its shareholding in Hertel (Solutions) Ltd, which specialises in water systems, to another company in the group, generating a profit of £12.72m from the disposal. The financial results were also affected by provisions made against the carrying value of investments of £3.8m.

Over the year, the firm also swelled the headcount, taking on 66 more staff to take the total to 2,621

Looking ahead, however, directors expect the overall performance for 2013 to fall below the latest figures, after losing a major contract.

The firm added: “The directors continue with a programme of very tight working capital management and this will continue as a matter of good practice embedded into the monthly reporting procedures of the company.

“At the end of 2012 the company lost one of its major contracts at Ineos, Grangemouth. Whilst this is a significant loss to the company and will impact on the results for 2013, it is expected that the overall normal trading results for the company in 2013 will be only slightly below those of 2012.

“This is due to the award of other contracts during 2012 and 2013.”

One such success was the announcement this month that Hertel (UK) had won its third major nuclear industry contract in a year, working at UK sites run by Magnox Ltd.

Magnox is responsible for managing 10 of the UK’s first generation of nuclear power stations, and the new contract will involve Hertel providing scaffolding, mechanical and rope access, asbestos removal and insulation maintenance at sites over the next four years.

Hertel, which has worked with Magnox since 2005, will operate at Hunterston A, Berkeley, Bradwell, Chapelcross, Dungeness A, Hinkley Point A, Trawsfynydd, Oldbury, Sizewell A and Wylfa in Anglesey.

Over the year, the firm also swelled the headcount, taking on 66 more staff to take the total to 2,621

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