Engineering company Nucore Group is to restructure and streamline in order to satisfy customers’ demand for combined service offerings.
Its two wholly-owned trading subsidiaries, Oteac and HVAC and Refrigeration Engineering (HVAC&RE), will be merged under the Nucore brand as part of an “alignment exercise”.
Group chief executive Mark Fraser said the move would help Aberdeen-based Nucore achieve “ambitious” growth plans, which include the recruitment of seven new employees in the near term.
Mr Fraser said: “Going to customers and offering all our services as one company is a better proposition for them and us. With two or three entities, it becomes cluttered.”
Nucore, which currently employs 127 people, was created in 2016 following the acquisitions of HVAC&RE and Oteac by the group’s backer, London-headquartered Lonsdale Capital Partners.
Oteac – founded in 1984 – is a specialist fire and safety engineering company, while HVAC&RE has provided heating, ventilation, air conditioning and refrigeration services and products to customers across multiple sectors since 1999.
Under the new operational structure, the Oteac and HVAC&RE brands will no longer be used.
Nucore will also stop filing accounts for the two businesses, whose figures will be consolidated into group inancial statements.
Mr Fraser said: “The alignment exercise is a positive step which allows us to grow and expand under the Nucore Group name, whilst retaining the strong reputation both Oteac and HVAC&RE have built over the years.
“The challenges of 2020 have given this alignment impetus. It is vital now, more than ever, that our specialist teams can unite experience and capabilities, and drive efficiency, ensuring our clients have assurance of safety and integrity of their global assets.”
He added: “Our strategic roadmap has continued to evolve this year and the business has made significant steps towards achieving a strategy of diversification, both geographically and within new market sectors.”
The announcement coincided with publication of the portfolio firms’ latest financial results by Companies House.
Included in Nucore’s accounts is a “mock-up balance sheet” showing what a consolidated set of figures for the group would look like.
Combined, HVAC&RE and Oteac generated revenue of £17.5m in 2019, up 5.4% on 2018, and gross profits of £4.7m, an increase of £700,000.
HVAC&RE made pre-tax profits of £690,000 in 2019, compared to losses of £620,000 for Oteac, resulting in profits of £70,000 overall.
Oteac figures were knocked by restructuring costs and the slippage of a significant project, which has since been completed.
HVAC&RE was buoyed by service and maintenance contract awards in the oil and gas sector, its increased presence overseas and diversification into renewables.
In 2018, the pair were £34,600 in the red, after HVAC&RE chalked up pre-tax profits of £25,000 but Oteac had losses of £59,600.
Nucore also said in its latest accounts that loans due to its parent “for gross amounts in excess of £15m” would be written off. The parent is Ireland-registered Tipabo, whose main shareholder is Lonsdale.