ENGINEERING services group Hertel (UK) Ltd saw both its turnover and profits fall in 2011 but the firm says it is confident of profitable growth in 2012.

The business, based at Middlehaven in Middlesbrough, and owned by Dutch parent company Hertel, saw sales drop from £183m to £155m in the 12 months to the end of December last year.

Pre-tax profits also fell to £7.5m, from £9.5m previously, according to the just-published figures.

Hertel said that during 2011, competition was very strong and many clients were looking to actively drive down costs and supplier margins.

Although loss-making contracts were mainly ended in 2010, the positive result of this was offset by a reduction in margins as clients were very price-aggressive.

All this considered, the directors were happy with the performance for the year and are confident that 2012 will prove to be as profitable or slightly better than 2011.

The firm added: “Significant efforts were made during the year to drive down working capital requirements and to keep a very tight control over overheads.

“The directors believe these efforts have been, and will continue to be, significant to the overall performance of the business.