Sheffield Forgemasters set to supply components for Virginia class submarines

David Bond, the CEO at Sheffield Forgemasters, said the firm has manufacturing licences in place to work on specific components on US Submarines.

It is expecting the first order for Virginia class submarines shortly.

Mr Bond made the comments as the company published its latest annual results. Sheffield Forgemasters International recorded an operating profit for the year ended December 31 2019 of £1.7m, compared with £3.2m the previous year, The firm said this figure was achieved during a year of consolidation for the group. Turnover in 2019 was £79.3m, which was an increase on the £66.3m recorded the year before.

Mr Bond told The Yorkshire Post that the company’s defence work was underpinning profitability, although commercial work had been quite badly affected by the pandemic. Overall activity was down by around 35 per cent since the start of the crisis, Mr Bond said.

However, he praised the Government’s response to the economic problems caused by COVID-19, adding: “The amount of interaction from the Government has been really encouraging and they have really put a shift in to reach out.”

At the peak of the pandemic, 216 out of Forgemaster’s 680 staff were furloughed. The figure is now around 100 and the company hopes to withdraw from the scheme in September.

Mr Bond added: “One of the things we have done very well is management of debt. It’s all about keeping the workflow and keeping staff busy.”

He said offshore wind was also one potential area of opportunity.

In its business review of 2019, Sheffield Forgemasters International said: “During 2019 the group has experienced a mixed market backdrop.

“The group has increased the volume of product manufactured for the UK defence sector and has also leveraged its strengths in pressure vessel technology and design to develop existing customer relationships. In addition, the group continues to service the US military supply chain..Global Defence has been identified as a growth opportunity over the medium-term.”

The group said it faced significant challenges in 2019, which included subdued demand for products in global markets, an ageing production environment and flooding in November 2019.

The group won £66m of new orders during 2019, driven mainly by UK defence customers. These contracts will provide the core revenues of the group through to 2022.

It was also successful in obtaining significant UK Government grant funding to develop electron beam welding technology for application in the civil nuclear market.

Sheffield Forgemasters plans to keep growing by taking advantage of opportunities in the global defence, civil nuclear and renewables sectors, while investing in manufacturing.

Forgemasters said it had faced unprecedented uncertainty as a result of the Covid-19 pandemic.

It added: “We have experienced short-term disruption to the business and are working with our stakeholders, including trade unions, customers, suppliers and financiers, to arrange the necessary support to maintain normal operations as far as possible.”

"This has included obtaining “Key Worker” status for those parts of our site that are critical elements in the Defence supply chain."

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