THE Clyde Union engineering and manufacturing business rebounded back into profit in its most recent financial year, helped by a number of cost cutting measures and job reductions.
Annual accounts for the business, which has its registered office in the Cathcart area of Glasgow but is owned by US corporation SPX Flow, show its revenue slipped four per cent from £109.2 million to £104.8m in 2014.
However it benefited from a lower cost of sales and reduced distribution costs in the year.
Gross profit margins also grew from 18.4 per cent to 23.7 per cent while total staff costs were slashed by almost £6m to £26.6m in a year when average monthly worker numbers dropped from 726 to 600.
Those factors helped to give Clyde Union a pre-tax profit of £4.8m compared to a loss of £6.5m in the prior year. There was £2.2m of restructuring costs booked in the 2013 financial year against zero for the 2014 accounts.
Writing in the accounts, recently filed at Companies House, the directors said: “The restructuring programme initiated in May 2013 aimed at reducing overhead costs in the business and driving further operating improvements in the delivery of world-class technology and engineered solutions to its customer base helped return the business to profitability in 2014.”
The directors also cited benefits from new processes, an enhanced contract approval process and lower financing costs.
Clyde Union makes pump products and provides aftermarket services to customers in sector such as power, oil, water, healthcare and industrial.
In September this year SPX Corporation, based in Charlotte, North Carolina, split itself in two with the creations of a sister company called SPX Flow.
Clyde Union is now part of SPX Flow’s power and energy division. Directors of the Glasgow business said it has “positive medium term outlook” under the new ownership structure.
Clyde Union’s order book at the end of 2014 was said to be £77m, down from £117.2m at the close of the previous year.
In the accounts Clyde Union noted it had paid about £1.5m in redundancy costs following a restructuring in Glasgow as a result of the ongoing downturn in the oil and gas sector.
The company started the process in May this year and said it had affected around 90 staff.
It said: “The market conditions experienced during 2014 and into 2015, [particularly] in the oil and gas sector, have resulted in delays to a number of large value projects.”
SPX bought the business from Jim McColl's Clyde Blowers Capital in a deal worth up to £750m in 2011.
At the point Mr McColl's company exited Clyde Union the former Weir Pumps business was employing close to half of its 2,000 staff in Glasgow.
SPX instigated its first large redundancy round in 2012 with 80 people leaving. That was followed by a further 160 departing in June the following year.
Clyde Blowers had paid £45m to Weir Group to save the Clyde Union business in 2007. Swiss firm Sulzer was in the mix to buy the pumps arm but wanted to close most of the long-standing Scottish manufacturing base.
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