Revenue and operating profit in Hydro International’s UK Wastewater division increased in 2012 driven by an improvement in project flow under the AMP5 programme.
In its financial results for the year ended 31 December 2012, the water control and treatment firm reported revenue of £14.7 million, up from £11.7 million for the previous year, while operating profit grew by £400,000 to £1.79 million. Profit margin slightly increased to 12.2%, from 11.8% in 2011.
Hydro said growth in the UK and Ireland Wastewater division was “particularly strong, driven by an improvement in project flow from the UK water companies under the AMP5 programme and continued delivery against our major contracts for Thames Water.” However, 2013 will see the revenues generated from the Thames contracts reduce materially as the projects start to reach their latter stages.
During 2010 and 2012 Hydro secured three major contracts, valued collectively at £22.8m, to supply Thames Water with Zickert sludge scraper technology at its principal wastewater treatment sites in London. These contracts, the longest of which is at Beckton and spans a four-year period to early 2014, have generated revenues during 2012 of £7.7m (2011: £8.4m). The remaining contracts at Mogden and Crossness are expected to conclude in early 2013.
In its UK and Ireland Stormwater Division, revenue dropped to £4.7 million from £5.6 million for the previous year, while margins plummeted to 2.8%, from 14.2% in 2011. Hydro said the division was impacted by “second-half year deterioration in markets for construction products and further delays in new regulatory drivers.”
The company’s American wastewater and stormwater divisions performed well with the wastewater division securing major contracts with stormwater making “good progress.”
As a whole, the Group’s revenue increased 12% to £34.7 million but adjusted operating profit fell 16% to £2.5 million. Profit before tax stood at £2.3 million, down 8% year on year.
The Group's order book stood at £11.6m (2011: £18.8m) at 31 December 2012, a reduction of £7.2m primarily as a result of the completion of the major contracts for Thames Water.
Roger Lockwood, Chairman of Hydro International, commented:
"Group revenues have grown despite tough trading conditions and Hydro remains well positioned to grow in the markets we serve.
“We are now embarking on various structural changes, including in our management teams, to ensure that the execution of our strategy is optimised and we take the necessary steps to capitalise on forthcoming opportunities. Hydro has an established reputation for being a leader in its markets; and is well regarded for its quality of service, products and expertise."