PREMIER Hytemp has blamed the falling oil price and closure of its Sheffield operation as turnover dropped by nearly £10 million in its latest financial year.

However the engineering firm, which supplies metals and components to the global oil and gas sector, is planning further investment in its Edinburgh facility this year in anticipation of demand growing when the oil price recovers.

Premier, which spun out of Murray International Holdings following a management buyout in 2012, booked turnover of £19.6m in the year ended September 30. This compares with £29.5m the year before, accounts newly available at Companies House reveal.

The fall in turnover came as the Newbridge-based firm, which brought in Campbell MacPherson to replace Donald Wilson as chief executive in April, narrowed losses to £1.5m from £2.8m in 2013.

That came in a year which saw the business restructured to meet growing demand for turnkey and "end to end materials management" solutions to the oil and gas industry.

The step change led the company to invest £430,000 to upgrade the capability of its Newbridge base, and close its facility in Sheffield. Staff affected in Yorkshire either relocated to new roles with Premier in Edinburgh, or found other work in the area, the company said. The restructuring led to the company incurring costs of £435,000 - £349,000 of which had been settled at September 30.

"From a trading perspective, the Company started the year with a strong order book supported by an oil price of $105 per barrel," the directors write in the accounts.

"This demand continued for the first half of the year. However, as the oil price began to fall from July onwards market activity has reduced.

"This reduction in activity, combined with the closure of the Sheffield facility has resulted in a lower level of turnover in the current year."

The accounts show the average staff numbers fell to 101 in 2014 from 111 the year before, with total payroll costs being trimmed to £3.4m, down from £5m in 2013.

Significant changes were made to the firm's senior management ranks in moves the directors said were aimed at boosting its in-house capability.

Mr MacPherson, who has more than 20 years' experience in high precision oil and gas engineering, was drafted in as chief executive, having been general director of Schoeller Bleckmann Oilfield Equipment in Vietnam. Premier also brought in oil and gas veterans Gavin Rippe as chief commercial officer and Tim Hatt as UK operations director.

Mulling the outlook, a company spokeswoman said: "The current market is challenging for everyone operating in the global oil and gas market. Our focus on cost control and margin improvement has been critical to ensuring we are well positioned to cope with the current conditions and continue to expand the services we offer to our customers."