Haskel Europe, which has a manufacturing plant in Sunderland, has reported an operating loss of £5.3m for the year ended November 30, 2013, despite growing external sales during the period.
The company, which made a profit of £3.9m in 2012, was hit by one-off expense of £6.9m relating to pension obligations, as, following the cessation of participation in the pension scheme, it was required to meet its obligations under the Pensions Act 1075.
Income from shares in group undertakings also dropped from £3.5m in 2012 to £61,443, while gross margin for the year reduced to 22.5%, compared to 35% the year before, mainly due to a change in intercompany pricing policy.
Established in the North East in 1950, Haskel focuses on the manufacture and distribution of pneumatic, hydraulic and associated equipment. During the year, its turnover increased by 2% to £16,326,225 while external sales - excluding intercompany - rose by 14%, with strong growth in export markets.
A report accompanying the latest results said: “The directors consider that the results for the financial year are satisfactory.
“Despite net liabilities excluding pension surplus of £787,421, the directors consider the company as a going concern.
“The closing balance sheet included loans from group undertakings of £3.3m, which was used to pay off the ‘one off’ pension payment. It is expected this loan will be repaid in full by the end of the next financial year.”
The report added that Haskel was continuing to strengthen its market position throughout Europe and Africa and was restructuring it sales structure to support future growth. It would also be taking over a distributor in Norway with future revenues of £2.5m per year.
“The directors are confident that the company is structured and positioned in a manner that will enable it to meet the demands of its markets and business environment,” the report said.