Hamworthy presses on with China programme

Hamworthy said it had also achieved the milestone of securing the land for a new 15,000m2 manufacturing facility in Suzhou, China, to replace an existing plant in this region. Commenting on the annual results which saw revenue fall by 15% to £214.3 million and operating profit down 15% to £19.5 million, chairman Gordon Page said: "This is another strong set of trading results for Hamworthy, despite on-going challenges in our markets. We have, however, maintained our operating margins on reduced revenue and once again remained highly cash generative. The Group has a strong balance sheet and a range of long-term growth opportunities and, despite short term market uncertainties, the Board looks forward with confidence." Chief executive Joe Oatley said the group had faced extremely challenging market conditions throughout the year with order intake being significantly impacted by the weakness in Hamworthy's end markets, in particular for new build projects in both the marine and offshore segments. Outlining a strategy that included creating a balanced business in long-term growth markets and achieving leading market positions in selected sectors, Oatley said good progress was made during the year in improving operational effectiveness, in particular in procurement where the group had strengthened its low-cost sourcing team in China and introduced a group-wide category management system for key components and materials. A cost reduction plan set out in January 2009 had seen headcount reductions in March last year and further steps had been taken to reduce costs during the last year. Since January 2009, employee numbers across the Group had been cut by 17%. "These collective cost reduction actions and operational efficiency measures will help to support our margins against any pricing pressures emerging as a consequence of the current economic climate," Oatley said.