Aeronautical engineering firm Hampson Industries has announced a 149 per cent increase in pre-tax profits over the past six months, proving resistent to industry-wide concerns about aviation.
The Brierley Hill-based company released positive interim reports and credited a large part of its success to capitalising on niche markets within the aeronautical sector.
Howard Kimberley, financial director of Hampson, said: “The important feature of our business is that one of our key sectors is not correlated to commercial build rates.
“We provide tooling for the construction of aircraft, and are the market leader by a factor of four. If Airbus or Boeing are building one aircraft or 1,000 aircraft, they still need the tools.
“So although sentiment is now turning slightly softer towards the outlook of commercial aerospace demand, the tooling market of which we are the largest player is de-coupled from that.”
Mr Kimberley said that even though industry figures were concerned about the recession, he was confident the demand for aeronautical innovation would keep Hampson in business.
“Airlines are facing an ever-increasing demand for aircraft to be more fuel efficient – from the environmental lobby, and from the industry,” he said. “That means the aircraft must be lighter. And for planes to be lighter they must be designed in a different way.
“Although manufacturers may be less keen to see themselves exposed to declining orders, if they are to stay competitive for the next few years, then they must stay focussed on development.”
Part of Hampson’s success is also down to its programme of acquisitions. In May the company bought Michigan-based tooling firms Odyssey and Global Tooling Systems for $253 million, tightening Hampson’s hold on the market.
“I think what we’re seeing here is the result of the current strength in the portfolio which is the benefit of our acquisitions strategy,” Mr Kimberley said. “It has progressively improved over the last few years and now left us in a much stronger position, with leading positions in at least three niches.”
Hampson are market leaders in tooling and high-precision components. They also specialise in shins – components used to join together aircraft parts – which Mr Kimberley described as “a fairly low-value part, but with a lot of black art and process know-how.
“We are the largest manufacturer of shins in the world by a margin of four to five times. It’s not massive in revenue terms, but is very profitable,” he added.
And the firm say they are pleased with their position in the West Midlands and internationally.
“We’re an old established firm, begun in West Bromwich in the 1940s, and it’s something that will stay with us,” he said. “It’s part of the DNA of the business, and we’re quite proud to be flying the flag of engineering in the region.”
Though Hampson remains bullish about its niche markets and overall profitability, Mr Kimberley admitted that concerns over the future of aviation cannot be ignored.
The company has benefitted from favourable exchange rates and aircraft manufacturers planning to build more aircraft over the next three years.
In the face of the recession, with currency fluctuations and a drop in aviation demand, economic difficulties may be slow to make their presence felt.
Sir John Rose, chief executive of Rolls Royce, warned last week the aviation industry is set for a rough ride, but Mr Kimberley believes Hampson can weather the storms.
“We are prepared, we have a very experienced management team in Hampson, and we have already survived a similar downturn, battened down the hatches, and withstood the economic pressures,” he said.