New executives at Sheffield Forgemasters report year of progress

25th April 2019

Sheffield Forgemasters International Ltd (SFIL), the heavy engineering specialist, has announced its 2018 financial results following the arrival of a new executive team last year.

David Bond, who joined as the new CEO in August, has overseen a return to profitability in a year of progress for the company. For the year ended 31 December 2018, the company recorded revenue of £66.3m (down from £76.1m in 2017) with pre-tax profit of £2.1m (up from £0.2m in 2017) and enters 2019 with an order book of £160m. David Bond, CEO, commented: -During my first 6 months, the business has focussed on delivery of high specification products to the defence sectors in the UK and US, whilst improving margins in the fiercely competitive steel processing market. This has underpinned a return to a modest level of pre-tax profitability in 2018, despite lower revenues, and provides a solid foundation to further develop the business in 2019. -We have also renewed our efforts to expand our customer base for premium products and design consultancy in complex engineering applications, to drive future margins and profitability. Our technical capability and reputation for innovation is a key market differentiator and demands we maintain our skill base through our apprenticeship programme, research and development efforts and investment in the latest manufacturing technology. David Bond added: -In 2018, SFIL saw a record intake of 33 apprentices and now employs 680 staff. Looking ahead, we will be increasing the amount of investment into plant and equipment in 2019 as we work to maintain the highest delivery and quality standards and drive continuous improvement in our health & safety performance. The company has also reported a significant reduction in net debt of £11.5m in the year, from £31.8m to £20.3m, following an extension of its lending facilities with Wells Fargo in November to 30 April 2020. Steve Hammell, CFO, commented: -We have successfully reversed the trend of rising debt levels in the business by a strict focus on cash management whilst maintaining levels of capital expenditure. Having recently extended our lending facilities with a £40m limit, the debt reduction achieved provides the financial headroom to accelerate investment in 2019 for the longer-term benefit of our customers and employees. Looking forward to 2019, the company has launched a transformation programme to deliver improvements in new business capture, operational effectiveness and cost competitiveness. Paul Cahill, COO, who is leading the programme, added: -It's a wide-ranging programme, building on our renowned strengths, to ensure we have the right capabilities and levels of operational performance to succeed in the long-term. David Bond concluded: -I am confident that all of our people at Forgemasters are fully committed to driving further improvements in the business as we embark on the next phase in the company's development.