Engineering firm Offshore Group Newcastle (OGN) is optimistic it can secure more contracts in the bouyant oil and gas market after posting a 70% lift in profits.
The Wallsend-based business, which recently rose to 47 in The Journal’s Top 200 from last year’s position of 122, designs and builds platforms for the UK and European offshore oil and gas industry and also carries out projects for the renewable energy sector.
Annual accounts show the firm’s pre-tax profits for the year to June 2013 rose from £1.7m, despite seeing sales drop by £50m to £99.1m.
The firm blames the end of a major contract on the slump in sales, but said it is confident of securing more lucrative contracts in the light of moves by the treasury to stimulate new investment in older oil and gas fields in the North Sea, by creating tax allowances for certain mature fields. Average headcount at OGN, which recently won the Business Efficiency award by Oil & Gas UK and the Made in Britain award by the CBI, also significantly dropped by a third after large contracts came to an end, from 597 employees to 398, but the company said it is “very optimistic that we will be recruiting in the very near future for new contracts”.
As well as remaining confident of securing additional oil and gas projects during the last quarter of 2013 and the first quarter of 2014, the group said it is also participating in a number of offshore renewable tenders.
OGN’s chief executive David Edwards said: “OGN are delighted with our accounts in the year to 30 June 2013, which has seen pre-tax profits rise.
“Since taking over the Hadrian yard in Wallsend in 2009, OGN have built a reputation throughout the offshore industry as one of the UK’s leading EPC contracting services companies. OGN have proven beyond all doubt that manufacturing within the UK can compete in a global market place, and we now look forward to what we foresee as a busy 2014 and beyond.”
During the year OGN’s subsidiary Aquind Ltd was awarded £4.5m from the Regional Growth Fund to build a new yard for the mass manufacture of offshore wind jacket structures, a facility that will help to create more than 800 jobs. The directors said: “The award of the grant represents a major milestone for the group and is aimed at generating incremental and sustained employment in the North East for both the group and the wider UK supply chain.”