Hampson Industries predicts slowdown after soaring profits
Black Country aerospace and precision engineering group Hampson Industries reported a 121 per cent surge in profits last year but said it was keeping a cool head as it anticipates a slowdown in demand.
The Brierley Hill-based group said the increase in underlying pretax profits, to £37.6 million in the period up to March 31 from £17 million the year before, was a result of its expansion into high-margin composites markets.
Hampson Industries chief executive Kim Ward said: “We have got a number of records being accomplished.
“We are now world leaders in tooling manufacturing in the composite industry and world leaders in shins as well.”
Shins are components used to join together aircraft parts.
But he added the group was taking a cautious approach to the year ahead as it anticipates a slowdown in demand from aircraft manufacturers as the global downturn continues to damage the sector.
“In the short term, with all the financial turmoil, we are feeling that airlines will cut back and postpone orders. Therefore we are being slightly cautious about next year’s earnings but after that I think we are going to be back in a growth-type mode. We are not seeing any cutbacks from the OEMs but we are feeling it will happen.”
Over the last few years Hampson has transformed its operations from a diverse engineering base through a series of six US-based acquisitions into an international aerospace group.
The group said its aerospace composites and transparencies division – which is the growth engine of the group – was responsible for 59 per cent of Hampson’s revenue generation in 2008-09, up from 29 per cent in the previous year.
It said strong contributions from Odyssey and GTS, which exceeded its pre-acquisition expectations, helped the firm achieve total revenue growth of 62 per cent during the period.
Mr Ward said this sector would continue to represent the focus of the firm’s investment in the next few years.
He said: “We have now repositioned the group so that almost 60 per cent is in the composite tool arena which is where the growth will come in the next ten years.”
Hampson Industries chairman Chris Geoghegan said: “Over the last five years, Hampson has been executing a clearly focused strategy to build a stronger, better diversified, group, with attractive positions in certain long-term growth sectors within the global aerospace industry.’’
Brokers Arden Partners said Hampson’s underlying results were comfortably above its expectations, but it predicted a “flat or weaker performance in the current year”.
