Augean said yesterday it was on the hunt for bolt-on acquisitions for its North Sea services subsidiary, with the Peterhead area identified as a target for expansion.
The hazardous waste management company teamed up with oil and gas service firm Scomi Oiltools to launch Aberdeen-based Augean North Sea Services (ANSS) in 2012.
Operating from locations including Aberdeen, Lerwick, Dundee and Great Yarmouth, ANSS is now wholly owned by Yorkshire-headquartered Augean.
The business has recently been diversifying out of exploration drilling waste services into markets less affected by the lower oil prices.
After hailing a continuation of the wider group’s “track record” of double digit underlying profits and revenue growth, Augean chief executive Stewart Davies revealed there is a new expansion plan for ANSS.
“We will be looking at acquisition opportunities,” he said, adding: “We have recently invested £2million in the business, mainly in Aberdeen and Great Yarmouth, to aid diversification.”
He would not be drawn on whether Augean has already found a likely target for a “bolt-on support service” for its existing industrial waste management business.
But he revealed the company is interested in oil and gas industry plug and abandonment services.
And he said he was keen to expand ANSS to the Peterhead area to reduce the number of costly road journeys the subsidiary currently undertakes between the Buchan town and Aberdeen.
“We have a lot of trucks going up and down that road,” he said, adding: “It’s a heavy cost to the business.”
Announcing a 25% increase in revenue to £76million during 2016, Augean said ANSS, which employed 70 people at the end of last year, responded positively to changes in its market by securing several new contract wins and cutting costs.
The business traded strongly in the second half, the group said, adding its diversification strategy was helped by a partnership with Forth Ports for managing waste from the decommissioning of offshore equipment at Port of Dundee.
But ANSS revenue for the whole year was down by 13% to £12.9million, while operating profits for the subsidiary were £800,000 lower at £500,000.
Group pre-tax profits halved to £1.3million, although Augean said underlying profits increased by 16% to £7million before one-off costs totalling £5.7million.
Mr Davies added ANSS was well-positioned for growth, with nearly 40% of business now generated from onshore activities – double the level of a year ago, when it was far more heavily dependent on offshore projects.
