ELECTRONICS design and manufacturing firm Stadium Group has given itself a head start to next year after ending 2012 by selling its Hong Kong office for a £2.3m profit.

The Hartlepool-based firm, which has been expanding over the past nine months by acquiring design-led companies and offering customers a complete bespoke manufacturing service, is hoping to make another investment to further its plans for growth next year.

The firm wants to evolve from being a electronics manufacturer to an electronic technologies group, focusing on providing niche technologies with intellectual property rights to enable the design and manufacture of tailor-made systems and parts of systems.

The firm decided to sell its Hong Kong office, which was set up to manage its China manufacturing plant, where it employs 1,000 workers, for £3.3m after moving its management team into China, making a £2.3m profit and giving the group a net cashflow of £3.1m. A small rented office will be retained in Hong Kong.

The sale ends a year which has seen the group fare reasonably well despite tough market conditions, increasing staff at Hartlepool by 20 to 140, and consolidating Teesside as the centre of the group’s UK operations, after securing £3m worth of new business with two customers.

The expansion and office sale have provided stability after the firm’s six-month interim report in September showed net revenues had fallen about seven per cent, from £23.2m to £20.9m, with electronic manufacturing services down 12 per cent to £18.2m, responsible for the loss, but sales from the business’s power side up 12 per cent to £2.8m.

Chief executive Stephen Phipson the revenue generated from the sale would give the firm more resilience in a difficult market and help the company move increasingly into the design side of the market.

“We are looking at acquisitions. We are adding to our ability to design parts and systems for customers.

“We bought the display company three months ago. It has been a very good acquisition and brought some very good customers, including Siemens. It has given us the ability to sell design services to existing customers and the company’s other services to the customers we got with the acquisition.

“It’s working very well, and what we need to do now is pick another company.”

He said the new strategy had been formed after talking to customers.

“It’s very difficult to be a manufacturing business – you need to offer much more than that now.

“We decided to do this after talking to customers and listening to their requirements.”

He said he had some ideas about what would make good acquisitions for Stadium Group.

“I would like another power supply business, maybe something else in the displays market, or something to do with the wi-fi market.

“We are looking at adding more and more of this type of business.

“I am still very cautious about next year – market conditions are not great. Manufacturing is very competitive and demand in the market is 10 to 15 per cent down. We need to get the right acquisitions and be different to our competitors.”