A BEAUTY industry plastics company says it is enduring a transitional period after lower annual profits compounded a shock contract blow.

Sone Products, in Stanley, County Durham, says group profits fell more than £100,000 to £704,540 for the year to July 31.

The firm, which specialises in mascara, eyeliner and lip gloss packaging, was forced to make 20 workers redundant earlier this year after a significant customer dropped its orders.

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Bosses have bought new machinery and secured deals to expand into different industries, including the e-cigarette and toothpick markets, which they say will give the company fresh impetus.

However, Raymond Oliver, Sone's chairman and chief executive, said the impact of the changes would take time.

He said: “It's important to remember that annual results are merely a snapshot in time of what is taking place within an organisation.

“Since that time, we've been forced to deal with an unexpected downturn in work from a major customer, which meant we had to make redundancies.

“That was deeply disappointing.

“It's fair to say we are in a period of transition as we begin to make our presence felt in our new markets, which doesn't happen overnight.

“However, although market conditions have been challenging, we have continued to invest heavily in new machinery, equipment and staff training to ensure we have the right skills to compete in a global market.

“I'm confident we'll soon begin to reap the rewards.”

The firm, which has more than 100 staff, is working on a three-year contract to deliver about one million bottles, caps and plugs to The E-liquid Company, a supplier of liquids for refillable electronic cigarettes.

It also has a £200,000 annual contract to make millions of toothpicks for Scandinavia. Mr Oliver said the company's decision to diversify its work would give it greater scope for growth.

He added: “Beauty packaging will remain our core product.

“But we have decided to extend our skills into the personal care, healthcare and a number of other markets, resulting in our first order from the fast-emerging electronic cigarettes market.

“Such flexibility and our supportive workforce will be key as we look to consolidate our balance sheet in the year ahead.”

Last year, Sone, which makes the main body and lids for mascara containers before inserting brushes and branding for global companies, invested £700,000 in equipment to increase production.

It also made its 100 millionth product since becoming an independent manufacturer.