Exova profits rise despite tough oil and gas market

Materials testing specialist Exova today reported a rise in annual profits but said conditions in the oil and gas sector have continued to weaken.

Edinburgh-based Exova employs about 4,200 people around the world. Picture: Contributed

The Edinburgh-based firm, which employs about 4,200 people around the world, said adjusted pre-tax profits for 2016 grew 7.7 per cent to £43.5 million, on revenues 10.8 per cent higher at £328.6m.

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It hailed a “strong” performance across areas including aerospace, building certification and health sciences, but told investors that “forward visibility remains poor” in the oil and gas arena, prompting it to close a laboratory in Malaysia and reduce headcount in Singapore.

Chief executive Ian El-Mokadem said the overall results were in line with expectations, “demonstrating the strength of our diversified portfolio and our ability to respond to changing market conditions”.

He added: “Overall growth was strong with broad-based organic growth across the portfolio, with the exception of our oil and gas and industrials sector.

“The portfolio has been strengthened by the recent acquisitions and disposals, and with extensive cost actions taken to mitigate the poor trading conditions in oil and gas, we continue to make good progress towards our medium-term objectives.”

On a statutory basis, pre-tax profits for the year to the end of December jumped 57.8 per cent to £36.6m, and shareholders are in line for a 6.3 per cent increase in their total dividend to 3.4p a share.