Ship repair and marine engineering business, A&P Group Limited, has reported “highly pleasing” results that came despite tough trading conditions.
The company, which has facilities in the North East and the South West, turned over £111.3m during the year ending March 31.
An annual report for the period showed this compared to £124.3m in the 15 months ended March 31, 2013, representing an 11% pro-rata year-on-year increase.
Profit before tax amounted to £10.4m, up from £7.4m, while the net asset position at the year end was £16.3m, compared to £10.2m in 2013.
A directors’ report said: “These results are regarded as highly pleasing, given that the expectations at the beginning of the year were for a difficult economic climate to effect profitability, a tight market in the core ship repair business and little activity in the offshore sector.
“These factors placed greater emphasis on the need to concentrate on the core larger ticket ship repair and conversion activities and secure significant fabrication contracts, whilst improving performance in respect of previously acquired long-term work.”
During the year, the group continued work on a second UK aircraft carrier project, which represented a significant portion of the turnover for the North East, where the core business of ship repair and maintenance remain subdued.
Defence sector projects likewise made a significant contribution to the results. However, due to the Royal Fleet Auxiliary’s (RFA) disposal of Largs Bay in 2011, the company lost a major RFA refit planned for the current year.
As a result, it says, it will experience a challenging trading period through to April 2015, when the next RFA refit is due.
Throughout the first half of the year, the Falmouth, Tyne and Tees dry docks saw encouraging occupancy levels, with Falmouth in particular being underpinned by work for the MOD.
The latter part of the year, however, remained subdued across all yards and, while the group continues to attract a significant amount of work from commercial customers, it had to reduce the average spend per ship - a trend that has continued into the early part of the new financial year.
The report, however, said the management and workforce had nonetheless successfully maintained contribution levels, enabling the ship repair sector to return a satisfactory performance.
It continued: “The group is determined to take advantage of the Falmouth and Tyne sites, which are well placed to secure work as part of the supply chain for, and to provide, support services to the emerging renewable energy sector and also into the oil and gas and heavy engineering industry.
“The board are pleased to report the successful completion of a number of contracts by A&P Tyne within the oil and gas sector.
“The board are paying close attention to the initiatives in these areas.”
The report added that trading in the first part of the current financial year had been satisfactory, despite a number of commercial ship operators continuing to trim their maintenance budgets.
The company foresaw the rest of the year progressing well.
“Our shareholders and current management team are committed to delivering our five year plan and ensuring that the business continues to go from strength to strength as we pursue opportunities in new sectors and continue to service our existing customers.”
A dividend of £2m was paid during the year, compared to £1.18m in 2013.