2018-19 witnessed a relative stabilisation of the oil price, at levels that reinforced customer confidence and supported investment and M&A activity within the Oil & Gas Sector. This fed through to increased demand for project activities in our main operating hubs of Aberdeen, London and Houston.
Combined with further technology refresh projects and new customer wins, this helped deliver near 27% growth across the Group (on a constant currency basis), producing another record year with revenues of just over £64M, once again aided by Sterling’s ongoing weakness against the Dollar.
Group pre-tax profits have improved and remain within our target range, as our rate of growth for 2019 outpaced increases in our corporate overheads.
Once again, we thank our staff for another year of safe performance with no harm to people or the environment. We recognise their focus, dedication and commitment to safe operations which underpins everything we do.
We are privileged to maintain our support and sponsorship of the Gathimba Edwards Foundation, an amazing charity that makes such a difference at an individual and family level, supporting the development and life chances of the neediest children in Africa. For more information, see https://www.prosource.it/gathimba-edwards-foundation/.
With the conclusion of some major projects during the first half of our 2020 financial year, we do expect to see growth flatten through the rest of the year and we are predicting a performance somewhere between flat and low single figure decimal growth.
Principal Risks and Uncertainties
The ongoing global coronavirus pandemic has emerged as a principal risk for the group post year end. We are fortunate that the majority of our workforce can work from home and our business is B2B so we have not seen an immediate Covid-19 impact as being experienced by a number of sectors where revenue is directly linked to footfall.
Our business remains sensitive to oil price reductions and we have reforecast giving cognisance to the impact on the business of the last oil price collapse both in terms of group revenue and EBIT levels. We expect the current oil price collapse will be amplified by the Covid-19 outbreak which has been factored into our worst-case forecasts. We can move quickly due to the use of a flexible workforce to mitigate against any revenue reduction.
The potential impact of the coronavirus pandemic is ultimately unknown and cannot be forecast with any certainty. We do however believe that the group has adequate reserves to withstand any unforeseen events as a result of this pandemic. The financial position will continue to be monitored very closely by the Directors.
Financial risk management objectives and policies
The financial risk management objectives of the group are to mitigate the risks facing the group as much as possible.
The main financial risks facing the group are credit risk, cashflow risk and foreign exchange risk. The group makes use of invoice discounting facilities to mitigate its cash flow risk. Foreign exchange risk is managed by invoicing in the base currency of the companies.