Optimistic outlook for Doncasters despite huge debt pile
Engineering group Doncasters has said it is optimistic about its future, despite its huge debt pile growing further last year.
The aerospace industry supplier, which has a major manufacturing operation in Shrewsbury, has published accounts for last year which show that profits fell, and debts grew as a result of the fall in the value of the pound since last year's EU Referendum.
The company acknowledged that the weakening of sterling against the dollar had led the overall value of the company's debts to increase by more than £100 million to over £1.2 billion.
Auditor PwC acknowledged that the size of the debts pose a threat to the group's ability to continue as a going concern, but added that it expects its performance to improve this year.
The accounts also discuss the company's anticipated sale in the first half of 2017, as investment body Dubai International Capital attempted to offload its last remaining asset.
However, talks over a £1 billion sale to Chinese telecoms company Beijing Xinwei collapsed in the spring, reportedly on the back of security concerns.
The company also said it made "substantial progress" in winning new work, helping boost its order book by 41 per cent during 2016.
That helped revenues to increase by £26.4 million to £654 million, although underlying EBITDA – a key measure of pre-tax profits – fell from £109.7 million in 2015 to £82.6 million last year.
Doncasters also said it was optimistic about its operational performance, with an increasing order book, “generally favourable” markets and the positive impact of new products.
Chief executive David Smoot said: “2016 has been a year of positioning for growth through investment and prodcut introduction.
“The group has seen a substantial increase in its order book and a new product pipeline which is expected to lead to growth in sales and earnings in 2017 supported by encouraging market conditions.”
The company is based in Burton upon Trent, and employs 5,000 people across its divisions.
The Shrewsbury operation, which employs more than 230 people, is focused on making vanes and blades for the aerospace and industrial gas turbines industries.