Martin Flanagan: CIE and Cape suffer North Sea storm
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Yesterday it was revealed that CIE Well Control in Aberdeen is the latest business in the sector to go into administration amid the stormy backdrop of low oil prices and reduced investment in the North Sea.
The group provides subsea and surface engineering services to the oil and gas industry from its Aberdeen base. But its problems, which started in 2015, are a repeated story of an unsustainable fall in client orders as energy operators looking to cut costs in the new climate rein in both capital and operating expenditure.
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Hide AdThe suppliers get caught by the bow wave, and CIE has had to announce 21 redundancies, virtually the entire workforce. The remaining two will assist the administrators KPMG to try and market the business and assets for sale.
Meanwhile, energy services group Cape, also with a strong Scottish and North Sea presence, revealed that half-time profits have fallen nearly a third and operating margins been squeezed severely. There will be more of these turbulent waves, unfortunately.
• Immediately after Brexit, there were fears the housing market might be one of the sectors right in the crosshairs of the ensuing economic uncertainty.
But so far, perhaps sustained by the Bank of England’s surprisingly strong aid package to the economy, there have not been any plangent cries from our housebuilders.
Persimmon, one of the biggest players, yesterday revealed that profits jumped nearly 30 per cent to £352 million in the first half of this year. But, perhaps more importantly for the future, chief executive Jeff Fairburn said customer interest since Brexit has been “robust”.
Visitor numbers to Persimmon’s sites are up 20 per cent year-on-year, while since 1 July the private sale reservation rate ‑ where buyers pay a fee to take a home off the market – is ahead 17 per cent.
It is hardly the picture of a sector frozen by housebuyers’ fears. It does not mean Persimmon and its rivals may not be a bit more cautious on landbuying in the post-Brexit uncertainty but even that may change in the months ahead if customer interest remains strong.