Diversified Aberdeen company Richard Irvin and Sons says its decision to seek out more business outside the north-east and the oil and gas industry is paying off.
Reporting a successful start to 2016 and a strong order book at its mechanical and electrical (M&E) division in its latest accounts, the group adds it is continuing to make “solid” progress in a challenging trading climate.
The upbeat comments are in chairman Bob Brannan’s review of 2015, when the company, which trades as Richard Irvin Energy Solutions, registered pre-tax profits of £18,000 on total turnover of £31.5million.
This compared with profits of £74,000 on turnover of £37.7million in 2014.
Mr Brannan, who is a former chief executive of Rangers Football Club and also chaired the board at Dundee FC for a spell, said last year’s slender profits were achieved after a “robust” performance in the technical facilities management division.
These offset challenges faced by the M&E business unit as “significant” projects were either cancelled or deferred.
“The board anticipated that 2015 would be a challenging year, given the company’s geographical reliance on the north-east of Scotland and, in turn, the region’s dependence on the oil and gas sector and so it had proved,” the chairman said.
He added: “The change in strategy, reported upon in last year’s report, of reducing the company’s reliance on both the north-east and oil & gas has proved to be the right decision, although it could not be enacted quickly enough to offset the reduction in M&E activity as a result of the oil and gas downturn.
“These challenges for the M&E business were the primary reason for the company reporting a year-on-year decline in turnover.”
Mr Brannan, whose other past roles have seen him lead some of Scotland’s biggest whisky makers, said progress for the M&E unit this year would “more than recoup the revenue downturn in 2015, with a commensurate improvement in profitability”.
A “robust” pipeline of work, a sharpened strategic focus and a settled board were among other reasons for optimism, he added.
Richard Irvin – led by chief executive Willie MacLean – employed 416 people on average last year, down from 436 in 2014.
Meanwhile, Aberdeen-based oil and gas well interventions and completions specialist Omega Completion Technology (OCT) has reported a sharp fall in profits.
The pre-tax total for 2015 was £273,649, down from £343,886 the year before, as turnover fell by nearly 4% to £5.76million.
In his business review of 2015, OCT chief executive Mark Buyers said the company benefited from an increased focus on well intervention products after “an initially poor start to the year”.