AEROSPACE and defence manufacturer Castle Precision Engineering is expecting "massive dividends" from its long-term projects despite slipping to a pre-tax loss.

In accounts filed at Companies House turnover was lifted by 11.5% from £12.8 million to £14.3m in the year to July 31, 2011, but pre-tax losses hit £188,246 compared to a £260,669 profit the previous year.

However a tax rebate of £202,580 meant the business made a bottom-line profit of £14,434 although that was well down on the £261,556 from 2010.

Staff numbers rose by one to 153 with employee costs including pensions up from £5.2m to £5.75m.

No dividend was awarded and the highest-paid director saw earnings drop from £226,275 to £157,838.

In notes to the accounts directors said: "Although it has taken longer than expected there are now very clear and positive signs the financial position is improving and our capital investments in long-term projects will pay massive dividends.

"The general market is now more fragile than at any time since the crash. However, certain sectors in which the company is heavily involved tend to be more resilient and should weather the current financial storm better than most.

"We look forward to consolidating our position in the New Year and potentially excellent 2012."

The business had been hit by delays to Boeing's Dreamliner passenger jet but that finally made its long-awaited debut in December and production is expected to increase in the coming years.

Castle, which makes components in its 90,000 square feet factory in Glasgow, was founded by Jack Tiefenbrun and is now run by his son Marcus.

Ivor Tiefenbrun, Jack's eldest child, spent time with Castle before founding hi-fi company Linn Products.