Upbeat Abbot plays down fall in profits

Published on Tuesday 21 March 2006 00:27

ABBOT Group, the Aberdeen oil services firm, was in upbeat mood yesterday despite a drop in full-year profits, predicting booming growth for the next two or three years.

Chairman Alasdair Locke said he was "absolutely certain" of the bold prediction - based partly on a flurry of contract wins in the first three months of this year. The group has secured $430 million (245m) worth of business so far this year - more than half what it won during the whole of 2005.

The group has secured work in Norway, Russia, Oman, Saudi Arabia and Libya since the turn of the year - part of a global focus that has seen the group's revenue percentage from the UK shrink to 11 per cent.

Locke said: "We have to position ourselves carefully. We don't want an over-reliance on one area or one customer. For example, we see good growth in Saudi Arabia, so we have grown our number of land rigs there."

The chairman was even bullish about the North Sea, saying investment and activity had risen from a low point in early 2005. The group said nine of its platforms were currently operating in the region, against four this time last year.

Locke added that the sector had yet to feel the expected hit from last year's tax hike on oil production, although he had no doubt that it would further down the line.

"Oh, we will," he said. "It's really not good news."

Abbot reported a fall in pre-tax profits from 27.8m to 26.3m, affected by lower activity. But the high oil price and subsequent worldwide investment in the sector has allowed the company to put the downturn behind it.

The group announced a dividend of 5p a share, up from 4.8p the previous year. It also said it had "virtually" got rid of its black sheep US division, Spear technologies, which is being sold to a North American firm for an as yet unspecified sum.

The shares held steady for much of the day, but collapsed late on as the sector responded to a falling oil price. The group closed off a disappointing 5.6 per cent or 18p at 303p.