Innovative electronics manufacturer Turbo Power Systems is powering ahead with plans to swell its ranks after securing contracts in new renewable energy markets.
The Gateshead-based firm designs and manufactures motors, generators and electronics for a range of sectors, including transport, defence and industrial, as well as emerging renewables customers.
In a stock exchange announcement to shareholders the firm announced new contract wins with UK Power Networks, a firm which had already enlisted Turbo Power Systems to supply a ground-breaking new design of electrical energy controller.
The controller is to be used for trials on the electricity distribution networks in the London and Brighton areas, and represents the company’s first contract in the low carbon initiatives market.
The company has now announced a further order from UKPN for the prototype units to be used in the trails, as well as a $3.4m order from Bombardier for auxiliary power units – deals which will now see jobs created at the Gateshead headquarters.
Charles Rendell, chief finance officer for Turbo Power Systems, said: “We’re very pleased to have secured contracts with the UK Power Network - it’s very good news in that it takes us into a whole new market.
“We can’t talk about how much the contract is worth for commercial reasons but it is significant. If you look to the future, where energy distribution is going, it’s renewables.”
David Hancill, the firm’s chief operating officer, said: “The partnership with UKPN is one we very much hope to continue. The group we are contracted with is running the South East power network but there are, I believe, another five similar countries based around the country.
“We aren’t in discussions with them yet, but we will be hot on their heels once we have this product ready.”
The stock exchange announcement included financial results for the first two quarters of 2014, as well as a comparison between the first half of 2013 and 2014.
Revenues decreased 18% to £7.46m in the first half of this year, compared to last year’s £9.07m, and operating losses widened before other operating income by 42%, to £2.04m.
However, work has picked up over the course 2014 on the back of new contract wins, resulting in sales growing by 26% in the second quarter to £4.16m, compared to £3.30m in Q1. Gross profit also grew by 70% to £0.82m in the period and the operating loss was narrowed to £0.71m.
Last year, as part of a review of the business, the firm also closed its manufacturing base in London and moved that operation to Gateshead, essentially making the North East its headquarters.
The move led to some redundancies, accounting for the firm’s 23% reduction in headcount to 126, compared to the 163 employed by the firm in the first half of 2013. However, relocating the manufacturing division in the North East led to 15 North East people taking on roles in the Gateshead facility.
Mr Rendell said: “This is one of the exciting things about these contracts. We are looking for new engineers in the area, and this area has the skills base for that. We moved manufacturing from London so we can build on Gateshead and we are looking to recruit still.
“I think the number will grow significantly as we bring new lines into production. The business is getting new contracts and moving forward in line with our strategy. The new markets we are entering are part of the way forward and that’s a good news story for us.”