AN electric vehicle parts maker has insisted it is “investing in the future” after an acquisition and the falling pound wiped out its profits.

Sevcon has reported annual sales of £40m - an increase of 21 per cent from £33m in 2015 – but recorded an operating loss of £4.2m, compared with a profit of £1.5m last year.

Bosses at the Team Valley-based firm, which develops controllers for the motors of electric and hybrid vehicles, said costs associated with the purchase of Italian battery charger producer Bassi, recruiting more engineers, and the falling value of Sterling caused the downturn in its performance.

Speaking to The Northern Echo, Matt Boyle, president and chief executive of Sevcon, said his company was “still open for business.”

“It looks horrible on the surface – I hate losing money.

“It is not wasted money though– it has all been investment.

“We have invested £2m more on engineers than we did last year, and that has meant we have doubled the size of our engineers.

"We have more projects in the pipeline than ever before and we expect that customer enthusiasm for Sevcon's capabilities will continue."

Mr Boyle confirmed he had made contingency plans “for better and for worse”, adding the most important scenario for Sevcon was a strong dollar.

“It will be worse for us if the pound starts to recover, and it will be better if it continues to weaken.

“Next year, we will see a rise in inflation and the Bank of England will try and raise interest rates.

“The macroeconomics at the moment are horrendous.”

Earlier this year, Sevcon acquired Bassi for more than £10m to increase its hold on the electric vehicle market.

"Our Bassi acquisition has performed above our expectations for 2016, having reported 26 per cent revenue growth post-acquisition compared with the same eight-month period in the prior year.

“Adding Bassi's state-of-the-art battery charging technology and power management capabilities to Sevcon's advanced control technologies strengthens our ability to deliver the more integrated solutions that our markets and our customers are demanding.”

The company also sealed a £28m supercar deal to develop controls for electrifying drive systems in high-performing machines.

Mr Boyle confirmed the Team Valley based firm was now supplying chargers, converters and distribution units, which has “doubled the content” of the original deal.

“The Bassi organisation was instrumental in winning the additional vehicle content from the manufacturer of high-performance sports cars.

”We are bullish about our prospects as we enter 2017. While we expect challenging conditions in traditional, industrial markets this year, we expect to see an uptick in our on-road business as a result of our strong project pipeline.

“As we look even further out, our project pipeline and the market demand for electrification solutions provides us with significant opportunity for growth.”

“It is difficult to find people in the North-East at the moment, historically though the region has been very good.”

Earlier this year, The Northern Echo revealed Sevcon was in negotiations to open a larger site in Gateshead, and Mr Boyle said the company was “committed” to the North-East, adding he hopes to confirm the plans in the New Year.

“We have a site in mind” he said.

Sevcon recently opened an office at Milton Park, near Oxford, and has taken its overall engineering workforce to more than 80.

At the time, bosses said the site put the company at the heart of stellar British motorsport, with the area known for housing various companies and Formula One teams, such as Renault, Williams and Haas.