By Press Room

July 20, 2005

Pre-tax profits at oil and gas services company, PSL Energy Services Ltd, have increased by 22 per cent to £1.7 million, while turnover has risen by 40 per cent to £40 million.

The Aberdeen company’s latest accounts to 31 December 2004 reflect a successful year for the group which has continued to win new business in the competitive UK North Sea market while strengthening overseas trade by securing major contracts in new geographic markets.

The strong financial performance has exceeded budgetary forecasts with turnover for the year up from £19 million to £40 million and ‘profit on ordinary activities before tax’ jumping from £937,000 to £1.7 million.

PSL’s finance director, Michael Buchan, said: “Demand for the group’s services is buoyant, reflecting not only the underlying strength of the global oil and gas sector but also our determination to introduce our service lines to new geographic markets.”

Mr Buchan said PSL had no bad debts and was highly focussed on maintaining a healthy cash flow position which had helped finance £6 million capital expenditure in the last year.

He added: “Internationalisation of the business is a key part of the group’s growth strategy with £14.4 million (36%) of the group’s total turnover earned from overseas operations during the year, compared to 21% in the previous period.

“UK North Sea operations continue to be the single largest operating region and delivered a very strong financial performance during the year. Turnover was £25.7 million, an increase of 14%, on an annualised basis.”

A significant investment in Azerbaijan had resulted in a highly successful start up and strong financial performance in the Caspian region and will provide a blue print for further planned expansion in the Middle East, Asia Pacific and North Africa.

Managing director, Doug Duguid, predicted a programme of controlled growth would deliver forecast revenues in 2005 in excess of £55 million.

He said: “We remain committed and focussed on our core UK operations and successfully increased our market share in the North Sea market by retaining key customer accounts and winning several new blue chip customers.

“By adhering to a strategy of controlled growth we have secured a wide range of important overseas contracts and the value of investing in bases in Singapore and Baku is reflected by their significant contribution to these latest accounts.

“In addition to the £6 million spent last year, we have committed a further £9 million for capital expenditure on new equipment in 2005. This will be largely funded from our strong cash flow position and ensures PSL’s fleet is one of the most up to date in the industry.”

The strong financial performance caps a year in which PSL won two of the oil and gas industry’s top awards. In March the company received the Scottish Enterprise Offshore Achievement Award for Best Overall Company Performance as well as the Export Achievement Award.

This was in addition to winning the award in 2004 for HSEQ performance. The group’s HSEQ performance during 2005 is again ahead of its industry peer group, with a number of performance enhancement initiatives now delivering results.

The PSL workforce has increased during the year and currently stands in excess of 550 worldwide, up from 220 just two years ago, while the strength and depth of the management team has also been added to.

Mr Duguid added: “The ability to source and retain suitably qualified personnel is one of the key challenges facing the business and its ability to deliver planned growth targets.

“The quality and experience of our people is critical to continuing to deliver the excellent service levels expected by our customers and developing training plans across the business is a critical part of the overall group strategy. The professional attitude and performance of our employees has greatly assisted in delivery of our business goals and we recognise the achievements and contributions made by all our employees.”

Taken from Aberdeen Chamber of Commerce

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