Aberdeen-based Sovereign Oilfield Group said yesterday it was considering further disposals following deals unveiled earlier this week.
As reported in the Press and Journal on Tuesday, the troubled oil service group is selling Vertec Engineering and the cabin-rental fleet of Labtech Services to fellow Aberdeen firm Offshore Containers to raise £5.45million.
The news came as Sover-eign finally delivered its 2007-08 results, nearly eight months after the required deadline. It also posted figures for the first half of its current financial year.
Sovereign plunged £1.9million into the red in the year to March 31, 2008 and there were further pre-tax losses of £3.2million in the six months to September 30. The deficits follow pre-tax profits of £1.8million in 2006-07.
Operating profits for the year to March 31, 2008, were flat at £2.8million, but turnover was up by 83% to £94.6million, leading Sovereign to describe 2007-08 as another year of growth after full-year contributions from earlier acquisitions.
The firm, which employs 850 people, also reported operating losses of £500,000 for the first half of 2008-09 on turnover up 4% at £47.7million. Executive chairman Graham Burgess said its figures were affected by one-off costs relating to aborted disposals and bank refinancing.
He said: “Difficult banking conditions during and since the end of the period hindered refinancing so finance costs for the period are high, however, the company has recently agreed revised terms with existing lenders that significantly reduce the cost of our debt and will improve cash flow in future.”
Sovereign arranged to acquire three businesses in 2007-08 but was forced to pull out of the deals because of funding problems and the downturn. It instead focused on organic growth, increased integration and efficiency, and cost cutting.
Trading in Sovereign’s Aim-listed shares was suspended in September because it was negotiating a restructuring of its debt and unable to publish its 2007-08 annual report and accounts within six months of its year-end. They are expected to start trading again early next week.
Drill-bit design and manufacturing subsidiary Diamant Drilling Services was sold to Logan Oil Tools in March for up to £469,000 and the sales announced this week will also help to reduce debt of £30.7million as at the end of September.