North entrepreneur Roy MacGregor has pointed to strength in diversity as the key to future success for his Global Energy Group (GEG).
The 69-year-old businessman said GEGs broad portfolio of energy service companies had proved itself nimble in reacting to the changing demands of customers during the Covid-19 crisis.
Speaking after accounts lodged at Companies House showed a sharp fall in profits and turnover at GEG as the pandemic hurt its businesses during 2020-21, Mr MacGregor, the Inverness-based group’s founder and chairman, said he remained positive about new opportunities emerging for the company in the growing renewable energy sector.
‘Diverse portfolio’
He added: “We have built our diverse portfolio of companies in such a way that allows us to react quickly to market conditions.
“This has been invaluable as we dealt with the impacts of the pandemic and the changing demands of our customers.
“Our people, culture, skills, and experience have allowed us to identify opportunities to support the energy market, and we are confident the business is positioned well for future growth.”
Mr MacGregor, who is also chairman of Ross County Football Club, founded GEG in 2005.
Pandemic cut profits in half
The group – built on oil and gas service industry foundations – reported a halving of pre-tax profits during the year to March 31 2021, to £4.9 million, from £9.8m in 2019-20.
Turnover slumped to £181.85m in the latest period, from just under £245m previously, as reduced activity in offshore oil and gas and the knock-on impact of travel restrictions on overseas operations took their toll.
GEG also pointed to Covid-driven supply chain disruption and an “ever-evolving energy policy landscape” as being among the major challenges it faced during 2020-21.
Earnings before interest, tax, depreciation, and amortisation (Ebitda) declined to £16m in the latest period, from £22.7m previously.
Wind energy ‘momentum’
GEG reported a “strong” result of £18.1m for adjusted Ebitda, factoring in the impact of restructuring costs, furloughing and redundancies.
The group said the drop in turnover was largely attributable to its offshore engineering and construction subsidiary, Aberdeen-based Global E&C, where manpower activity offshore reduced by 50% “overnight”.
It added it was forced to “retreat back” from offshore projects overseas, particularly in Norway, with 130 workers “retracted” as a result of the pandemic.
Across the group, headcount was down by nearly 30% to 758 during the year to March 2021 as offshore oil and gas activities dried up.
But GEG said it continued to “gain momentum” in onshore and offshore wind markets.
It added it was enjoying “sustained growth” in its support of major projects such as the Moray East offshore wind farm.
The group also said total turnover in its current trading year to March 2022 had bounced back to “close to pre-pandemic levels and a rapidly evolving customer base”.
Our people, culture, skills, and experience have allowed us to identify opportunities to support the energy market, and we are confident the business is positioned well for future growth.”
Roy MacGregor, chairman, Global Energy Group.
Chief financial officer Gordon Farmer said: “Covid-19 had an immediate effect on the group, with personnel down-manned from a number of offshore operating assets and overseas project locations overnight.
“The board and senior leadership team reacted swiftly to ensure the safety of our people and stabilise the business in respect of both liquidity and leverage.
“This strategy has positioned the group in a strong position for future investment to support our energy transition strategy and deploy capital for future growth”.
GEG said ongoing investment amid “these challenging times” included key strategic hires to support its energy transition strategy, as well as a new office in Edinburgh to “place us at the centre of the renewables markets in the United Kingdom”.
The group also highlighted the “development and improvement” of its flagship facility, Port of Nigg, at the entrance to the Cromarty Firth.