CASTLE Precision Engineering has seen pre-tax losses more than double in a year that saw it join the high-profile project to break the world land speed record.

The family-owned business, which derives the bulk of its turn-over from manufacturing components for the defence and aerospace industries, is building the wheels for the Bloodhound supersonic vehicle that will attempt to reach a speed of 1000mph in South Africa in November this year.

The company said its connection to the project, from the profile it will bring to the technological advances involved, will spearhead its export activities for the next 10 years.

However, more recent trading has proved to be more difficult.

Castle highlighted "hard trading conditions" as it reported pre-tax lossses of £418,451 for the year ended July 31, 2012, compared with £188,246 the year before.

Writing in the accounts, Castle's directors, led by managing director Marcus Tiefenbrun, said the losses had prompted it to review its contracts and trading terms "to ensure the company remains viable and sustainable".

They also noted that the period had seen it continue its evolution "from the traditional sub-contract operations towards being a single source finished product provider for its customers".

The directors said: "The transition is necessary to bring more value through the organisation and to secure the company's position in the market."

In spite of the challenges, the company reported a 9.9% increase in turnover to £15.76 million from £14.34m, which it described as a "reasonable result given the current economic climate".

Castle, which was founded by Jack Tiefenbrun in 1951 and went on to spawn the separate Linn Hi-Fi as an offshoot in 1973, said its individual projects are "not normally noteworthy". However, it highlighted its involvement in the next Bloodhound project as being key to its future prospects.

The engineer is manufacturing 18 solid aluminium wheels at its premises in Castlemilk for the jet and rocket-powered vehicle, which will seek to eclipse the current land speed record of 760mph.

It is understood each wheel will spin 177 times per second if the target is to be achieved.

Castle is also supplying other components for the Bloodhound, including inner and outer wheel covers and inner wheel caps.

The Castle directors said: "The technical challenges and worldwide exposure associated with manufacturing the fastest wheels in mankind's history will assist our export strategy over the next decade."

Castle employed a monthly average of 159 staff in management, administration and manufacturing roles over the year, up from 153 the year before.

Staff costs for the year rose to £6.3m, compared with £5.7m in 2010/11.

Directors' remuneration came in at £292,1984, up from £242,743, with the highest-paid director receiving emoluments of £157,839, a solitary pound more than the previous year (£157,838).

Castle expressed confidence in the long-term prospects of the business.

The directors said: "We expect 2013 to remain a challenging operating environment but expect that greatly improved financial performance will be achieved in 2014."

No-one from the company was available for further comment.