Diversification in to renewables and interconnector market rewarded Ecosse Subsea Systems Ltd (ESS) more than trebled profits to £3.4 million and increased revenue by 88% to £15.6 million according to its latest published accounts.
The Aberdeenshire-based subsea engineering specialist attributed the phenomenal growth to a diversification from its traditional oil and gas market in to renewables and interconnectors.
ESS has developed technologies which are in high demand for seabed clearance work, trenching and cable laying projects. In the past two years the company has made huge inroads in to the emerging renewables sector which now accounts for 55% of projects and builds upon an earlier focus on oil and gas contracts.
The accounts to March 2014 show turnover increased from £8.3 million to £15.6 million, while operating profit (EBITDA)* rose from £1.02 million to £3.4 million in the same period.
The drivers for ESS’s most successful trading year to date was a £5.4 million contract on the Baltic 2 windfarm offshore Germany and a multi-million pound cable-lay contract on behalf of an European utilities provider in the Humber Estuary.
Last month ESS also announced it had signed a Letter of Intent with ABB to provide seabed clearing and trenching services on the 100-mile £1.2 billion Caithness-Moray electricity transmission link project, which could end up as the company’s largest ever contract award.
The company employs 70 offshore and at its headquarters in Banchory near Aberdeen, which rose to 110 during the execution of offshore projects, and in the last year it has invested more than £1 million in research and development.
ESS managing director, Mike Wilson, said: “The results are extremely encouraging and confirm that our technologies are equally suited to and easily transferable between the oil and gas sector, which is where we cut our teeth, and the green energy market. Added to that, we have just won our first contract in the interconnector sector and we hope success on the Caithness-Moray project will lead the way to further awards in this field.”
Mr. Wilson said other parts of the business, including its engineering consultancy and personnel recruitment arms, had enjoyed a successful year and added significantly to the bottom line, while continued investment in new technologies was now bearing fruit.
He added: “We benefited greatly from research and development in our technologies starting to come through, and recognition from clients that we have developed a suite of tools which deliver measurable time and cost savings.
“Diversification is paying off for us as can be seen in these latest financial results and we will continue to look for new opportunities in other markets, including oil and gas and interconnector projects in Arctic waters where we have already received some interest.”
Mr. Wilson noted that ESS had already suffered from the effects of a low oil price with the cancellation of a number of oil and gas projects and said that while 2015 turnover would increase on the previous year, that margins would be tighter.
He added: “With a healthy balance sheet and debt-free status, we are in a strong position to counter the challenges facing the oil and gas industry while capitalizing on new opportunities in other markets.”
