A nosedive in spending at cash-strapped oil and gas companies has inflicted an 82% drop in profits at Peterhead’s Score Group.
Score chairman Charles Ritchie said the global engineering firm had an “overhead structure” designed to cater for revenue streams in excess of £200million.
But those streams failed to materialise in 2014/15 as clients tightened their purse strings to contend with the oil price rout, according to accounts lodged with Companies House.
The business turned over £174million in the year ended October 1, 2015, a 2.6% decrease year-on-year, while pre-tax profits plummeted to £1million from £5.7million.
Score, consistently one of the north-east’s top performing companies, said it would continue to take steps to offset the slump in capital expenditure levels in the oil and gas sector, which accounts for about 90% of group income.
Over the year, Score reduced its global headcount by 28 to 1,724, Mr Ritchie said in his chairman’s statement.
He said the UK workforce was impacted by the cuts, but that staffing levels had increased at a number of Score’s other locations, “principally in the Australian and American continents”.
The company declined to say how many people had been laid off in the north-east of Scotland when contacted yesterday.
Mr Ritchie, one of Scotland’s richest men, is among hundreds of shareholder employees at Score. There were 1,094 at the time the accounts were prepared, up from 974 since the start of the period under review.
The chairman said widening the ownership of Score “greatly benefits the daily performance”.
Other steps Score has taken to improve performance included a 3% increase in the number of training days it provided over the year.
Score, which has more than 400 apprentices or trainees, opened a new training centre of excellence in September on the site previously occupied by Peterhead prison following a £750,000 investment.
The group also submitted eight patent applications in the past year, and has another 20 in the pipeline.
The accounts showed that the company’s best paid director – unnamed but likely to be Mr Ritchie – earned emoluments of £1.1million during the period, roughly in line with the previous year.
Score Group was formed in 1982 to provide valve-repair and re-certification services.
It is now a major supplier to the worldwide offshore industry, with 32 subsidiaries across more than 30 countries.
Profits also took a tumble at Kintore-based Ferguson Group, which supplies offshore accommodation modules and containers for the international energy industry.
Ferguson recorded turnover of £11.6million for the 18 months to June 30, 2015, an increase of 79% compared to the full year 2013.
Despite the surge in turnover, pre-tax profits collapsed to just £47,000 from £2.5million at Ferguson, which employed about 44 people during the 18 months.
Ferguson also declined an invitation to comment on its accounts when contacted.
The group was sold to Australian group Brambles in 2014 for £320million by north-east entrepreneur Steven Ferguson.