Engineers build on strengths

Sep 5 2008 by Peter McCusker, The Journal

ENGINEERING company Chieftain has published impressive half-year results and said it is close to securing a major contract which should “significantly” boost turnover and create jobs in Tyneside and Teesside.

The Newcastle company, which has around 800 staff, has continued to win business since seeing record turnover last year of £46m in 2007, a rise of 39% from the previous year.

In April, it said it had landed its largest-ever contract, and yesterday its results for the six months to June showed turnover had risen by a further 6% to £22.8m, and profits are up over 40% to £1.07m.

Bill Taylor, chief executive of Chieftain, said: “Another cracking set of results. During the period we have won an exciting pipework fabrication and erection contract, the largest ever for the group, and are hopeful of winning a second similar contract before the year end.

“The markets in which we operate, oil and gas and marine, have ensured that we are unaffected by uncertainties in the wider economy and continue to witness strong demand from this sector. Long-term contracts and a strong order book mean we remain confident for the group’s prospects.”

Chieftain said in April that 250 jobs would be created in Newcastle and Middlesbrough with a contract for fabrication and pipe insulation work which it said was its biggest ever.

Yesterday, it said it was close to signing a second major deal with the same client.

Mr Taylor added: “This could be of a similar magnitude to the contract we secured earlier this year with the same client. If we’re successful, it would significantly boost our annualised revenues going forward.”

Chairman Peter Wardle said: “We have not been affected by the widely reported global credit crunch, nor by the consequential downturn in general economic activity and we do not expect it to have any impact on the group in the foreseeable future.

“Chieftain’s end markets in oil and gas, petrochemicals, marine and defence, power and plant are all demanding outsourced engineering expertise and look set to continue to do so.

“Chieftain’s long-standing relationships and reputation in these fields should continue to provide opportunities for the group, throughout challenging conditions in the wider economy.”

As well as its engineering division, Chieftain has an outfitting division which is currently fulfilling a long- term contract for the Royal Navy’s Astute submarines.

House broker Brewin Dolphin is forecasting full year pre-tax profits of £2.2m up from £2.08m last year.

CHIEFTAIN

Turnover: 2008 – £22.8m 2007 – £21.6m. Increase – 6%

Pre-tax profit: 2008 – £1.07m. 2007 – £760,000. Increase – 29%

Dividend per share: 2008 – 3.3p. 2007 – 2.5p. Increase – 32%