Thermal Engineering: Return to profitability in 2012 Successful turnaround backed by Privet Capital


Thermal Engineering: Return to profitability in 2012

Successful turnaround backed by Privet Capital

LONDON--(BUSINESS WIRE)-- Thermal Engineering, the UK based supplier of high temperature lightweight aerospace components is pleased to announce its results for the year ended 31 December 2012. These results highlight substantial sales growth and mark a strong return to profit. The successful turnaround for the Privet Capital backed manufacturer follows a comprehensive range of measures introduced by its management team.



  • Successful turnaround to operating profit of £1.6m (2011: £0.4m operating loss)

  • Substantial sales increase and expanded customer base: 30% turnover increase to £16m;

  • Strengthened financial position: refinancing and consolidation of all primary debt into a £6.2m long term funding facility with Lloyds TSB Commercial Finance;


  • Comprehensive measures put in place to improve operational performance:

  • improving delivery and quality performance

  • implementing lean manufacturing processes

  • Strengthened management team with a track record of generating long-term growth

  • Growing customer base:

  • strengthened relationships with customers through long-term agreements

  • Trent XWB (for Airbus A350) and TP400 (for Airbus A400M) engine programmes moving towards production volumes

  • working on new development programmes with key customers

  • Investment in people:

  • 10%+ increase in employee headcount to 234

  • expansion of apprenticeship scheme

  • augmenting engineering resources through recruitment and training

Strategy and outlook

  • Management is setting ambitious growth targets:

  • We forecast revenue growth in excess of 10% in 2013

  • Strengthening customer relationships, specifically with OEMs and their Tier 1 risk sharing partners

  • Continuing development of export markets, particularly in the US

  • Targeting future aircraft and engine programmes (eg. A320 Neo)

  • Significant capital investment to increase capacity in hot forming and cellular assembly lines

  • Substantial recruitment and training programme

Operating Review

Following the acquisition by Privet Capital in 2010, Thermal Engineering has completed a successful turnaround culminating in a return to profit in 2012. During the initial phase of the turnaround Privet Capital and Chairman, Vardhan Rajkumar, strengthened the management team and introduced comprehensive measures to improve delivery and quality performance. A focus on efficiency and lean manufacturing as well as recruitment and training to add engineering and quality resources resulted in significant improvements in the performance of the business. Relationships with suppliers and customers were strengthened and long term agreements put in place. During 2012, the management team was further strengthened by the addition of Managing Director, Max Humber with the aim of maintaining a sustained level of growth and continuous improvement. The company supported its customers on existing and new programmes including the Trent XWB, TP400 and developments in new fan blade technologies.

Following the acquisition and investment by Privet Capital, the financial position of the Company was strengthened through the refinancing and consolidation of all primary debt into a £6.2m long term funding facility with Lloyds TSB.

Thermal Engineering expects to continue its ambitious growth strategy going forward. This will be achieved through focusing on the business's core strengths in manufacturing high temperature, lightweight aerospace components and assemblies. Thermal Engineering will continue to strengthen relationships with both Tier 1 suppliers and OEMs both at the development stage of new programmes (such as the A320 Neo) and thereafter into production volumes. This will be supported by investment in increasing capacity in hot forming and cellular assembly to ensure that Thermal Engineering develops into a world class manufacturing business in the UK.

Vardhan Rajkumar, Chairman of Thermal Engineering, commented:

"2012 was a milestone year for Thermal Engineering as the company returned a significant profit and posted a growth of 30% in revenues. The results reflect the measures taken over the last two years to improve business performance. Our aim is to continue this impressive performance to build a UK manufacturing champion, with an ambitious annual growth target. We forecast revenue growth in excess of 10% in 2013..

"In parallel, we continued to invest in our future growth, especially in our highly skilled and committed employee base, both through recruitment and through a series of targeted training and apprentice programmes.

"We are proud to be a UK industry success story: a growing manufacturer in a high-tech, critical sector such as aerospace. Our strategy is to continue to develop our expertise in high value forming of hard alloys, an area in which we have a unique capability in the UK and beyond, whilst building on our strong financial position and enhanced customer base."


About Thermal Engineering

Thermal Engineering is a UK based supplier of specialised components and assemblies to the aerospace industry, concentrating on hot and cold forming of hard alloys, fabrication, assemblies, thermal insulation and protection. Based in Royston, Hertfordshire, Thermal has 234 employees and is a key contributor to the local economy. Their global customer base currently includes companies such as Rolls Royce, Safran and GKN.

Thermal Engineering Limited
Vardhan Rajkumar, +44 (0) 17 6324 2067
College Hill
David Simonson, Anca Spiridon, Alexandra Ritterman
+44 (0) 20 7457 2020

KEYWORDS: United Kingdom Europe


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