North-east subsidiaries of James Fisher and Sons made a large contribution to a 26% surge in annual profits, the marine service firm said yesterday.
Fisher – which owns Dyce-firm Pumptools, Inverurie-based consultant Buchan Technical Services (BTS) and Fisher Offshore, of Oldmeldrum – said divisional profits at its offshore oil operations had risen 37.9% last year.
Organic growth accounted for 76% of the increase from the offshore oil division.
Fisher bought BTS for £4.9million in May 2007, while Pumptools was acquired for £7.7million in October that year. Another north-east business, Aberdeen-based measurement-instrument manufacturer JCM Scotload, acquired for just under £3million in February last year, forms part of the Strainstall load-measurement operation at Fisher’s specialist technical arm.
Fisher, which employs about 140 people in the north-east, said yesterday that 2008 had been an excellent year.
Announcing pre-tax profits of £24.2million, compared with £19.2million in 2007, chairman Tim Harris said: “The key to our good performance was good organic growth in the marine support divisions of offshore oil, specialist technical services and defence.”
Group revenue was up by 20% last year at £233.6million after Fisher reaped the rewards of a geographically diverse portfolio of businesses and a weak pound; a large part of its earnings is expressed in either US dollars or Norwegian kroner.
Fisher’s offshore businesses are more focused on production and maintenance than exploration, ensuring continued strength despite current low oil prices.
It is still active in the UK North Sea but now earns much of its profits in longer-term overseas markets such as Asia and Africa, with very little exposure to North America and Russia.
Mr Harris said these factors confirmed that the company’s strategy was still valid in the credit crunch and gave it a good degree of resilience in an economic downturn.
He said a further slump in oil prices would inevitably hit service companies such as Fisher, but the immediate outlook for its operations was unchanged from last year, adding: “The consistent strategy of investment in niche operating businesses has ensured that the company’s operations are well balanced and sufficiently diversified.”
Mr Harris also said the economic downturn should make potential acquisition prices more reasonable.
Jon Lienard and James Tetley at broker and wealth manager Brewin Dolphin said: “2008 results are excellent and ahead of expectations but of more interest is the resilience of the group in 2009 and beyond.
“A strong and prudent management team both at board and second-tier level gives confidence in strategy.”
Analyst John Lawson at Investec added: “Fisher continues to deliver a very strong trading performance and cash flows are strong. The outlook continues to look promising.”