A North East manufacturer said it is continuing to invest to position itself for future growth, despite seeing its losses widen to £4m.

Cramlington air filtration specialist AAF Ltd – part of the Japanese multinational Daikin Industries – supplies filtration and acoustic solutions to markets including oil and gas, healthcare, nuclear, pharamceutical, power and airports.

Latest accounts show the firm, which was named company of the year at the Tyneside and Northumberland Business Awards 2015, chalked up a 13% jump in turnover from £61.03m to £72.47m in the year ended March 31 2017.

Its operating loss, however, increased from £3.8m to £4.03m although this was impacted by foreign exchange rates, and the firm said that excluding the fair value of forward foreign exchange contacts, the loss would have narrowed to £2.23m.

Despite the losses widening and bosses citing a poor global economic climate, the firm plans to continue its strategy to grow its market share and invest in new product development, to make sure it is ready to take advantage of a recovery in its markets, which have taken a hit over the last three years.

Headcount at the firm reduced from an average of 266 people to an average of 249 people.

Directors said the company continues to invest in the latest engineering and design technology to position itself for expected future growth - and the company continues to have support from its ultimate parent company, Daikin.

In the report, the directors said: “Overall, gas turbine related markets continue to be impacted by poor global economic conditions, falling oil process and political factors.

“The long term outlook is positive but it is difficult to assess in the short term when beneficial changes will arise.

“It is still expected that markets will start to show signs of recovery from the economic downturn in the long term, and overall volumes are expected to grow from that point for all aspects of the business, though various economic factors have delayed this.

“The continued low oil price, attitudes to trading with certain countries, and political uncertainty in some locations have all impacted the return to the growth.

“AAF Limited’s goal is to continue to improve gross profits in the next financial period by expanding market share, maintaining strict cost control and establishing further efficiencies in project execution.

“This will be offset by further increases to expenditure on new product development to ensure that AAF Limited remains well placed to continue to grow its market share in the future but hopes to see a return to profitability in the near future.

“AAF Limited continues to invest in new facilities for developing and testing existing and new products to provide a competitive advantage now and in the future.

“The directors regard investment in this area as vital for success in the medium to long-term future.”