A “year of transition” after being acquired by a South African company saw Dundee manufacturer Rockwell Solutions record a loss in 2018.
Based at Wester Gourdie, Rockwell produces lidded film coatings — high-tech barrier films used to enclose microwave meals and other foodstuffs.
Rockwell was acquired by Sappi Europe, a division of South African group Sappi Ltd, for an undisclosed sum in July 2017.
The first set of accounts under the new structure show Sappi Rockwell Solutions Limited recorded sales of £10.66m in the year to June 30 2018, compared to a turnover of £10.24m in the previous 10 months.
The firm, which employs 90 staff, made a pre-tax loss of £857,000 in the financial year.
Rockwell invested more than £8m and three years of research and development in its Rockwell product line to produce solvent-free lidding for the food packaging market.
The machine, commissioned in 2016, is 70 metres long and has the potential to give Rockwell savings of £3m a year.
In his strategic report, director Stephen John Blyth said the Rockstar machine had required further investment last year.
“Additional capital expenditure was undertaken in 2018 to enhance the capabilities of the Rockstar machine,” he said.
“As a result this machine has not been operating at full capacity during the course of the year and this has had an impact on turnover.
“Despite turnover not being in line with directors’ expectations, gross margin has remained stable which is pleasing given the changes being implemented during the course of the year.”
Mr Blyth, who joined the company following completion of Sappi’s buyout, said a variety of costs had been encountered to align the two firms’ IT, health and safety, staff welfare and accounting policies.
Infrastructure changes – mainly a senior management team being established to replace the previous directors – had also led to additional overheads.
He said Rockwell was exploring opportunities in new markets and he predicted an improved financial performance this year.
Mr Blyth added: “2018 has been very much a year of transition and this has been reflected in the financial results.
“The new owners recognise the potential and growth prospects for the company and have spent most of the past 12 months taking steps that will strengthen the company’s foundations and will enable it to capitalise more effectively on any future opportunities as they arise.
“We are continuing to invest in and develop the organisation both operationally and administratively to ensure the company is aligned to take full advantage of the additional productive capacity created.”