Loss of contracts result in profit drop for manufacturer
The Rotherham-based UK arm of German manufacturer Kostal has reported significant losses in profits for the year ending 31 December 2017.
The business, which is part of independent family company Kostal Group founded in 1912 in Lüdenscheid, posted a drop in pre-tax profits from £8.9m to £5.3m.
In accounts published on Companies House this week, Kostal also saw turnover dramatically fall to £74.2m, compared to the £93.6m figure achieved during the previous year.
Kostal said that the decrease in turnover was expected due to “certain contracts coming to an end of manufacture and not currently being replaced by equivalent volumes.”
Going forward, the company said the main objective is to “drive quality and efficiency improvements further to compensate for reduced volumes and prepare for contracted growth in 2019.”
As part of the firm’s long-term strategy, Kostal is planning to invest in new technologies and product development.
Back in 2016, the company saw profits increase by £13.5m with turnover hitting £100.4m at the year’s end. The following year, however, Kostal experienced an 8.5% decline in sales and by 31 December 2017, this figure had fallen by 20.1%.
Late last year, Kostal was also ordered to pay £420,000 to 56 workers after losing its appeal at an employment appeal tribunal in London.
The workers were granted £420,000 by a Sheffield employment tribunal in February 2017 after the firm was found to have made ‘unlawful inducements’ by urging them to sign a new contract behind the Unite union’s back.
