EnerMech Sets $452 Million 2014 Sales Target

Oil and gas services group EnerMech Ltd. has predicted 2014 turnover will increase to more than £280 million ($452m), a jump of £80 million ($129m) on the current year’s forecast and double the £144 million ($232m) revenue recorded in its 2012 annual accounts.

The Aberdeen-based company’s 2012 group accounts showed an £11 million ($17.7m) profit (EBITDA) on revenue which grew 41% from £102 million ($165m), and it expects 2013 EBITDA to break the £20 million ($32m) barrier.

The mechanical engineering specialist reported that in the same period its U.K. domestic revenues topped £100 million ($161m) for the first time (£101 million), up 38% from £73 million ($118), and EBITDA increased from £1.9 million ($3.1m) to £5.3 million ($8.6m).

Managing director Doug Duguid said performance in traditionally mature markets such as the U.K. showed 32% year on year growth, with non-U..K. revenues increasing by over 56% with Asia and Norway performing particularly well.

Strong trading in the current year, the acquisition of three strategic businesses and expanding its international presence to over 30 facilities in 18 countries, will strengthen EnerMech’s 2013 financial performance and push revenues over £200 million ($333m), with an expected £80 million ($129m)uplift in 2014.

The company last month announced it had secured a £90 million ($145m)funding package by establishing a ‘banking club’ including Bank of Scotland, DNB and HSBC, and that a combination of further investment in infrastructure and acquisitions would create 700 new jobs.

In the Director’s Report for the 2012 accounts, recently filed at Companies House, Doug Duguid, said: “The impact of global recession, a trend towards commodity pricing within certain sectors and targeting new geographies did not impact the group’s gross profit margin, which grew from 22.4% in 2011 to 22.9% for the current year [2012].

“This is particularly pleasing given the significant investment during the year in additional resources and operational overhead required to establish a solid base for future operations, predominantly within the Africa and Americas regions and within the Valves business line.

“Growth in EBITDA of over 31% from £8.3 million in 2011 to £11 million demonstrates the improvement in performance achieved [in 2012]. The directors believe that the continuing investment in top quality regional and functional management, along with investment in the competence and development of EnerMech employees, will provide a solid base from which to deliver further global expansion.”

In October 2012, EnerMech secured a further £15 million investment from original investors Lime Rock Partners, which enabled the group to complete the acquisition of Water Weights International SA Pty Limited in South Africa, a key element in the strategy to offer EnerMech’s range of services across the African continent.

With over 30 bases in key oil and gas regions, EnerMech employs 1800 staff and provides six main business lines to the energy and power industries – Cranes and Lifting; Valves; Hydraulic products and services, Process, Pipeline and Umbilicals (PPU); Equipment Rental, and Training services.

In January, EnerMech acquired Melbourne-based ValveTech Engineering which provides servicing, engineering, modification, testing and supply of valves to the Australian oil and gas, power generation, petrochemical and refining industries.

In July the acquisition of Vicon Services group and the subsequent opening of two new facilities extended EnerMech’s footprint in Australia to eight locations. At the same time, the addition of Great Yarmouth and Aberdeen based Total Reclaim Systems Limited (TRS) to the EnerMech group, increased the range of drilling support services the company can provide to offshore drilling rigs and production platforms.

Other key developments in EnerMech’s growth included an increased presence across West Africa, the opening of larger premises in Singapore, opening a second Norwegian base in Bergen, and establishing facilities in Mumbai and Kakinada in India, and in Mexico where the company recently secured its first contracts.