Engineering firm’s profit grows again

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AES Engineering has reported its 32nd year of consecutive profit growth, but sales in the 37 countries it does business have dipped due to the strength of sterling.

The parent of AESSEAL said earnings before interest, tax, depreciation and amortisation rose six per cent to £25.2m. The group paid out a dividend of £2.41m to shareholders.

But revenues fell 3.1 per cent to £142m in 2014. Stripping out the effects of exchange movements, it said like-for-like sales rose 2.7 per cent.

Chris Rea, founder and managing director, said: “Our business would be vastly smaller if we didn’t export. Currency movements are one of the risks but there’s lots of rewards.”

Mr Rea is the majority shareholder, while private equity firm 3i has a significant minority in one of its longest-held investments.

He said: “Trading performance was anaemic. We failed to provide sufficiently compelling reasons for new customers to give us an opportunity.”

He admitted that he may have been distracted. Last summer, he took a significant stake in Surgical Innovations, the Leeds-based medical devices maker, and was appointed interim managing director in October.

AESSEAL is the world’s fourth largest designer and manufacturer of mechanical seals for industries including oil and gas, food, water, and mining.

The group employs more than 1,650 people worldwide, including 680 in the UK and Ireland and more than 350 in Rotherham, home to the headquarters of its global technology centre.

Mr Rea said the group has seen a massive improvement in performance productivity following investment in new machinery.

It spent nearly £5m last year and more than £8m in 2013. It bought three second-hand machine tools worth £2.4m, at a vastly reduced price from one of the major racing car manufacturers.

The group has also brought home some operations home from China.

Mr Rea said that wages might be lower but quality control and staff retention were worse.