Sheffield Forgemasters International Ltd has reported improved financial performance for the year ending 31 March 2025, with revenue rising to £114.4 million (£94.9 million in 2024). The increase was driven by stronger sales to UK defence and commercial customers, alongside energy efficiency initiatives and capital investment programmes, resulting in a pre-tax profit of £0.5 million compared to a £5 million loss the previous year.
The company mitigated an operating loss of £1.2 million (2024: £5.2 million) by leveraging Rrsearch and development as a core strength and securing £5.5 million in additional income through grant-funded and other projects, an increase of more than £2 million over the previous year.
Patrick Davison, chief financial officer at Sheffield Forgemasters, said: “The group financial results for the year ending 31 March 2025, demonstrate improvements in both revenue and operating efficiencies, driven by much hard work and continued investment into the business. Despite the company facing challenging global competition and unpredictable markets due to geopolitical factors and high energy costs, the improved top line and our return of a nominal profit is satisfactory, providing a relatively stable financial platform for the new financial year.”
Positive effective of capital investmentMr Davison added: “The company’s gross margin increased to 18.6%, almost two percentage points up from the previous year which, alongside improved defence volumes, also demonstrates the initial positive effect of capital investment replacing old and unreliable equipment. UK Defence has continued to provide a strong flow of orders from major programmes, but demand from the oil and gas and steel processing sectors remains subdued, the latter impacted by weak automotive demand and tariff uncertainty.”
The Group’s largest three geographical markets showed UK sales of £96.6 million, North American sales of £10.7 million, and European sales of £5.7 million, a decrease of £1.8 million over the previous year. Mr Davison said: “Diversifying the market exposure of the Group will remain a key focus over the coming years and in the medium term the Group has identified growth opportunities, including in global Defence markets, and emerging possibilities in civil nuclear and renewable energy.”
Equity of £159 million was provided by the Ministry of Defence (MoD) to facilitate capital expenditure for the year, which totalled £144.8 million, driven by the recapitalisation of defence-critical assets. Sheffield Forgemasters is delivering a £1.3 billion recapitalisation programme to build a new 13,000-tonne forging Line and a ‘state of the art’ machining hall to underpin UK defence programmes. The company’s £15 million working capital facility provided by the MoD remained unused during the year.