Earth-moving kit manufacturers Miller UK said they are bearing the weight of high overheads as they gear up for growth, after seeing operating loss widen to £1.25m.
The Cramlington-based company, a global leader in making and supplying buckets and couplers for companies such as Hitachi and Volvo, posted turnover of £19.34m in 2013, a small lift on 2012’s £19.27m.
However, the 2012 operating loss of £340,740 more than trebled to a loss of £1.255m in the year ended December 2013, while the pre-tax loss also grew from £568,502 to £1,494,285.
Despite the figures, the firm said its outlook is positive, that the company’s core territories are performing better than expected and potential new territories are being explored this year, and the firm is carrying the loss in preparation for an expected growth period.
In a report accompanying the accounts, financial director Chris Parkin said: “Whilst the company has again incurred a loss and continued to see its balance sheet including cash generation and debt reduction suffer accordingly, its outlook remains better than it has for the previous four years.
“The loss is primarily driven by the company carrying a level of overhead that is too high for the current levels of income.
“The overhead though is planned to support the expected growth in the following years.
“Turnover continues to increase and has significantly done so during 2014 as some of the investment in product research and development and business development starts to show positive signs.
“Alongside this, all relevant marketing data indicates an increase in demand from Miller’s traditional customer network.”
The company said it is also looking to expand its portfolio of products, to offer customers a one-stop solution for their attachment needs.
Potential new markets are also being explored, but any strategy in new areas will be very cautious, with extensive market research carried out before any significant investments are made.
Since the year end, in October 2014, the business has appointed a new managing director, Mike Askew, who has 28 years’ experience in the aerospace industry, leading international manufacturing businesses.
Just weeks into the new job, Mr Askew has started a number of initiatives to improve margins, enhanced with significant capital expenditure investment – and a credit line has been put in place.
Mr Parkin added: “The company’s main focus through the remainder of 2014 and 2015 will be a sustainable return to profitability, which will be closely aligned to cash generation and debt reduction.
“Despite a few poor years, the directors have every reason to feel confident for the future. The business continues to discover many and new opportunities for growth in both existing and new markets.”