Last year saw the toughest economic conditions in living memory for not one but two of the UK’s largest industries – North Sea oil and gas, and the steel industry. With both sectors facing what has been described as the “perfect storm,” ravaged by global economics, politics and a price rout, 2015 was not a good year to be dependent on these vital industries. However Scottish metal recycler, steel tubular trading and decommissioning company John Lawrie Group seems to have weathered these conditions and has just recorded a strong set of financial results.
The company’s annual results for the year ended 31 December 2015 show that, despite a fall in revenues to £62m, operating profit from continuing operations was still close to £5m.
Group financial director, Charlie Parker, said: “2015 has been a tough year for the oil & gas and steel markets, but our business model, combining a spread across various market sectors and international locations, has resulted in a decent set of results being produced.
“We continue to improve the working capital and net asset position of the group. Total shareholders’ equity at the year-end amounted to some £47m and we ended 2015 with a healthy cash surplus position.”
The year wasn’t plain sailing as the group had to close its West Midlands-based steel stockholding operation. Mr Parker commented: “The mass over supply of steel from China swamped that operation’s target markets and we had no alternative other than to close the business. On a positive note, after assessing the situation, we reacted swiftly allowing us to refocus on profitable areas of the business to move forward with.”
An area of growth is decommissioning. Although John Lawrie Group has been offering decommissioning services to the oil and gas industry for more than two decades, there has been an upturn in activity over the past 18 months. Not only do the company’s metal recycling operating bases in Aberdeen, Montrose and Evanton, near Invergordon, allow the group to provide customers with an excellent, well established support service for oil and gas decommissioning and other dismantling projects, but they provide a mobile project team which has successfully carried out decom work at numerous port facilities on the entire east coast of the UK. Last year’s launch of the John Lawrie Decom brand has been very well received and the group is well respected within the oil and gas industry for its practical and trusted approach to decom projects.
European steel mills continue to be John Lawrie Group’s main exporting outlet for processed scrap metal however, the uncertainty leading up to the UK’s referendum on EU membership in June 2016 which led to turmoil in the financial and currency markets, further exacerbated the volatility of metal prices.
“On a positive note, we have just invested over £1/2 million in a new automated and weather-proof saw-line facility in our Montrose operation to enable a constant and high quality supply of our steel piling products to our customers across the UK and Europe,” said Mr Parker.
“As for 2016, not only will we continue to face challenging market conditions, but we also face political and economic uncertainty in the UK, Europe and the USA. Despite that, we are confident that the business model we have built over the past 20 years, combined with our financial strength and diversity, will allow us to do well in these challenging times”