SMD profits trebled in lead-up to Chinese sale; ENGINEERING.
Byline: TOM KEIGHLEY email@example.com
PROFITS at Wallsend subsea engineering specialist SMD trebled to PS4.2m in 2014, just months before it was acquired by a Chinese transport giant.
The specialist in remotely-operated underwater vehicles saw operating profits rose from PS1.04m to PS4.2m in the year ended December 31, 2014.
Just six months later the firm was sold to Chinese state-owned transport firm CSR Times Electric in a PS120m deal.
Accounts for the Tyneside firm, which has operations at Wallsend and North Shields, show turnover increased from PS76.04m to PS81.3m thanks to SMD's diverse range of markets.
In a report accompanying the accounts, SMD pointed to a strengthening of its order book towards the end of the year and a "solid year" for the trenching business - including new and returning customers.
During the period PS497,000 was invested in research and development activities and PS1.08m was spent, largely on the extension of the firm's Oceana Business Park premises.
Writing in the report, company secretary Richard Howarth said: "2014 was a solid trading year for SMD, with the order book being resilient to changes in our operating markets, showing the benefit once again of having a substantial market share in a number of different markets.
"Major trading highlights of the year were: the WROV business continued to standardise its five models. The order book during the middle of 2014 reflected the changes in the oil and gas market segment, but towards the end of the year, the order book grew significantly and at the end of 2014 provides a substantial proportion of revenue coverage for 2015.
"The Trenching Business enjoyed a solid year, with the order book still strong at the year. It was pleasing to note a mixture of new and returning customers placing orders in 2014."
Since the period under review SMD has seen a number of major developments to its business.
Last month the firm announced the completion of a $100m contract to supply a trio of undersea mining vehicles to be used by Canada's Nautilus Minerals as they become the first company to pioneer mining of gold and iron ore on the seabed.
The three pieces of kit - a bulk cutter, an auxiliary cutter and a collection machine - are now due to be taken to an unnamed location for testing in shallow waters before they loaded onto a specially built vessel and deployed in the Pacific Ocean.
All three will operate at depths of around 1,500m in temperatures of 2.6 degrees celsius, controlled remotely by teams on board the vessel using sonar and mapping technologies.
More recently it emerged 80 jobs at SMD are at threat of redundancy due to the knock-on impact of EU sanctions against Russia.
A contract to provide two sets of cable laying and burial equipment was delayed as the firm was denied an export license due to the sanctions.
Workers have drawn up a petition with more than 2,000 signatures that calls on the Export Control Organisation to reverse its decision to reject SMD an export licence.
Andrew Hodgson , managing director of SMD. The Wallsend subsea engineering specialist's profits trebled to PS4.2m in 2014