Demand is expected to pick up this year for electrical testing equipment maker Seaward, following a dip in operating profits.
Bosses at the County Durham manufacturer of PAT testing, solar and medical appliances say they are pleased with the performance amid a challenging year in which operating profit dropped from £4.1m to £2.7m. Turnover remained flat at £24.8m in 2024, documents published at Companies House show.
Seaward said that after a strong start to the year - with first half trading 12% ahead of the same period in 2023 - demand across its brands had slowed down. The impact was said to have been felt across sister companies in the German-owned GMC Instruments stable.
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Despite the more challenging market, Seaward grew its headcount from 178 to an average of 202. It expects further pressure from increases in the national living wage but said the hike in employer National Insurance contributions, which came into effect earlier this year, would have more impact.
Writing in a report filed with the accounts, chief executive Chris Callan - who joined Seaward in 2021 - said: "Turnover in 2024 remained in line with the previous year. Trading in the first half of the year was strong and 12% ahead of the same period last year.
"Activity across all brands slowed in the second half of the year, an effect felt across many geographies and by other GMC Instruments companies. The specific expectation of continued demand for our Solar products within Europe dropped as our partners were temporarily over-stocked.
"The board expects this demand to return as market-leading products will be launched in this space in 2025. Despite more stable prices generally, supply chain volatility remained a prominent feature in production planning throughout 2024. Inventory management and reduction strategies that were commenced in the year will remain a key focus for the board in the next 12 months.
"Gross margin improvement proved difficult to achieve and ended at a similar level to 2023 levels. Although component prices stabilised during the year, the substantial April increase in the national living wage (NLW) level offset the possibility of upward improvement."
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Mr Callan went on to say that Seaward would continue to review product pricing amid efforts to remain competitive and manage increased labour costs. He added: "The cost of support functions increased by 16% over 2023 -in line with expectation - as the business invested in engineering resources to progress new product development and support growth in the service offering.
"The board believes that achieving an Ebitda of £3.2m (2023: £4.5m) was a satisfactory result given the above noted factors and the continued investment in capabilities to underpin future growth."
Seaward paid ordinary dividends to its shareholders worth £1.45m, up from £2.18m in 2023.