After three consecutive years of low oil prices and challenging operating conditions for our customer base in the Oil & Gas sector, 2017-18 benefitted from a modest and gradual oil price recovery with a resultant increase in confidence feeding through to a general economic upturn in two of our major operating locations, Aberdeen & Houston and the release of some pent-up demand, leading to investment in infrastructure upgrades and further M&A activity.
This additional activity along with two major new customers contributed to material growth of 15% (in constant currency) for the Group, which achieved record revenue of £50.6M. Also helping were Sterling’s ongoing weakness against the Dollar and additional revenue from a small acquisition. Breaking through £50M revenue for the first time was a fitting milestone for the company to achieve as it celebrated the 15th anniversary of its creation via the merger of promac Aberdeen and Outsource IT in June 2003.
The company also benefited from the reduction in US Corporation Tax at the beginning of 2018, which reduced its US tax bill. Unfortunately, this was somewhat offset by the impact of Hurricane Harvey in August & September 2017 which so horrendously devastated so many parts of Houston and caused untold misery to many of our staff and customers. The downtime and other associated costs for that period are estimated to have reduced our US profit by a low six-figure sum.
Group pre-tax profits improved slightly to 14.8% as we continued to manage our cost base to maintain our competitive edge.
We are very grateful to our staff for another year of safe performance with no harm to people or the environment. This requires ongoing dedication and diligence and can’t be taken for granted and we thank them for their focus and performance. A commitment to a safe operating environment underpins everything we do.
We remain honoured to continue our support and sponsorship of the Gathimba Edwards Foundation, an incredible charity that supports the lives, development and life chances of the neediest children in Africa. For more information, see www.prosource.it/gathimba-edwards-foundation.
As BREXIT grows nearer, we remain unscathed from any direct impact and do not expect any direct impact, even from a disorderly conclusion, other than the general uncertainty that clouds the business world and the ramifications on general investment and the UK economy.
We enter the new financial year with anticipation and more confidence than we have for four or five years. Our order book is at its strongest for half a decade and we have some exciting new customer prospects that we are optimistic will contribute to another record year for the Group, with growth once again expected to be in the mid-teen percentages.