Energy service company Can Group said yesterday new contracts worth more than £15million a year were helping to offset the impact of the oil and gas downturn.
The Aberdeen-based firm also said it was seeing “better signs” for contractors as the North Sea industry tries to restore its fortunes in the wake of the oil price slump.
Volumes and margins are still being squeezed, director Innes Walker said, adding: “We are no different to other companies in the supply chain in that respect.”
He was speaking after accounts from Companies House showed Can’s holding company made pre-tax profits of £16.5million during 2016, slightly up on the year before.
Turnover grew to £91.9million in the latest period, from £82.2million previously.
Separate accounts for the group’s Can Offshore subsidiary, which takes in the UK-based business as well as some international operations, showed pre-tax profits falling to £11.9million, from £12.7million previously
Its turnover grew to £63.2million, from just over £59million last time.
Mr Walker said: “Proactive cost-reduction was a key feature of our accounts in 2015 and remains in the forefront of the entire industry’s approach to commissioning new work.
“While our turnover grew slightly in 2016, due to the new contracts and in part through currency differences on our overseas activities relating to the weak pound, the cost of sales has also increased – resulting in a fall in our gross profit of 9.5%.
“That has not, however, reduced our commitment to continued reinvestment in the business, which remains a crucial part of our strategy.
“By putting our profits into acquiring and developing new technology, as well as supporting the continuous development of our people, we are able to add value to our offering.”
He added: “Our outlook for the year ahead is similar to where we were 12 months ago, though there are better signs for the supply chain, with new opportunities being created by operators investing in new assets and extending the life of existing fields in the UKCS (UK continental shelf).
“Continued recovery from the downturn will only be possible through their continued commitment to maximising economic recovery in the basin.”
Can Group employed 613 people on average last year, up from 566 in 2015.
The company, which describes itself as “a market leader in life ofasset integrity services”, is owned by Lancashire-based businessman Michael Freeman.He founded the business in 1986.
Mr Freeman was ranked 819th on this year’s Sunday Times Rich List, with a fortune estimated at £135million.
Recommended for you
Read the latest opinion pieces from our Energy Voice columnists
- Opinion: US Iran Sanction – Undoing the JCPOA?
- Opinion: SMES still face energy “perfect storm”
- Opinion: EU data protection rules, the UK’s statement of intent
- Opinion: Unleashing ‘SturgeonPower’ could transform Scotland’s energy landscape
- Opinion: Iran’s a distraction. The urgent problem is Kurdish oil