Investment is planned across the North East and Cumbrian sites of steel castings group Bonds, the business’ chairman has told The Journal.
Around £2m investment across the group’s Tow Law, Crook and Alston sites is expected in the near future, according to chairman Paul Duncan, who was speaking following the latest accounts for the manufacturer.
Turnover at BondsHold Limited, the group behind County Durham-based Bonds Foundry and Alston-based Bonds Precision Castings, remained broadly flat in 2014 although Mr Duncan said the group’s outlook was broadly positive.
The 247-employee strong group, which undertakes 60% of its work in the beleaguered oil and gas market, saw turnover drop only slightly to £16.1m in 2014, from £16.8m.
Bonds said the relatively static year had been unusual given its average growth rate of 9% a year over the previous four years.
Operating profits fell to £31,503 from £243,195 during the period.
Mr Duncan said: “A good proportion of our work is in the oil and gas sector. The slump in the market did provoke a moment of realisation for us but luckily our portfolio is fairly well spread and we did not feel the effects too much.
“There’s still a good base of work out there, albeit with more competition for it, and at more competitive prices.
“The foundry market is in a current state of structural change but I think we are relatively better placed than others due to the breadth of work which has spread the risk.”
Cost cutting to the tune of £500,000, including a small number of voluntary redundancies, was used to mitigate the impact of the oil and gas downturn.
The year saw an amalgamation of Bonds CastTech, the lower to mid-weight castings supplier of the group, and Bonds Foundry — prompted by increased intercompany trading between the two.
The combined turnover of the two firms for the year would have amounted to £12.2m with a profit margin of 3.8%. Company secretary Robert Blackett said the performance represented an adequate return given adverse market conditions.
Following the move, Bonds Foundry now operates three sites, including two at Tow Law for large castings with expanded heat treatment and one at Crook for smaller castings with finishing and fabrication facilities.
The group also operates an Alston base for Bonds Precision Castings, which has been under its ownership since 2008. Plans to expand the site with a £1.25m 10,000 sq ft factory extension have been granted conditional approval by the local authority.
Mr Duncan said the group would continue to pursue work over the next 12 months through marketing activity and expected modest profits in line with the recent results.
Two third-year undergraduate mechanical engineering students are expected to join the group in the near future to complement the 16 apprentices currently on the payroll.
Bonds specialises in the manufacture and supply of steel castings up to 12 tonnes finished weight for original equipment manufacturers in the oil and gas, power, construction and marine markets.
The firm has previously supplied and repaired anchors for Ministry of Defence ships and submarines and valve castings for the oil and gas industry, among other contracts.