North East engineering group British Engines invests for the future despite market conditions
Resource from: ChronicleLive Likes:194
Aug 19,2015
A British Engines apprentice
A North East engineering group is investing for the future despite seeing turnover fall amid the turmoil of the oil and gas crisis.
British Engines has confirmed it will continue to invest for the future of the business and the regional economy through collaborative projects, research and development, and a commitment to continue training the region’s future engineers.
The pledge comes as the Newcastle firm said pre-tax profits tumbled by 44% from £19.9m to £13.8m on sales of £144.5m, which were also down by 7.5% on the previous year.
The firm, which currently employs around 1,000 people across six businesses in the North East, cited the downturn as a consequence of the uncertainty surrounding the global oil and gas market, yet detailed how heavy investments have been made.
The business has almost doubled its investment in research and development to £4.5m, while also investing £15.5m in capital expenditure.
This year £1m has been spent on its in-house apprenticeship scheme, which includes developing a machine shop for its 81 apprentices and their mentors, which is designed to help nurture more advanced manufacturing skills and provide additional hands on training courses for those wanting a greater choice of careers within the business.
The financial year also saw the business announce a significant investment in a new centre of excellence for hyperbaric testing on the banks of the River Tyne, alongside JV partner Newcastle University, which will be the first of its kind in the UK.
Construction on the £10m project is expected to start by the end of the year.
British Engines also expects to complete the purchase of Michell Bearings from Rolls-Royce PLC by the end of 2015.
The company is expected to acquire the Scotswood Road business for around £12.6m, making it the group’s seventh engineering company in the North East.
The Rolls-Royce Training School is also being acquired as part of the deal.
Alex Lamb, chairman of British Engines, said: “We, like many in the oil and gas industry, are seeing turbulent conditions in our markets. Whilst we believe that in the longer term these difficult conditions will ease, the next 18 months or so will be difficult for most businesses in the industry.
“Ourselves, like many others, will have to redouble our efforts in focussing on providing our customers with the value added products they need at competitive prices.
“We are investing for the long term, not the short term, and we are confident that the business is well placed to grow as our markets stabilise.
“We are particularly excited at the prospect of completing the acquisition of Michell Bearings and the North East Training Centre.
“This centre provides the perfect platform to not only further develop our own apprenticeship scheme, but also create a world class training environment for the region.
“Our apprenticeship scheme continues to provide us with highly skilled, ambitious and loyal engineers, many of whom go on to become senior managers within the group. Investing in the scheme, and the people we recruit, is a key strategy for our business.”
(ChronicleLive)
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