17 Sep 2010 07:00
Cosalt plc
("Cosalt" or the "Group")
Interim Management Statement
Cosalt (www.cosalt.com), the specialist provider of critical safety equipment and services for the Offshore Oil & Gas and Marine industries, announces its Interim Management Statement in respect of the period from 3 May 2010 to 17 September 2010.
Although activity in certain areas of the North Sea has increased and there has been renewed focus on investment in oil exploration since we reported results to 2 May 2010, key customers in the North Sea remain cautious. In addition, sales of work wear equipment within the Marine Division have continued at a lower level than the previous year with the consequence that Group revenues for the period 3rd May to 29th August were lower than for the comparable period last year at £32.5 million (2009: £35.7 million).
However, despite the challenging trading conditions in our principal areas of activity, the Group has made good progress in a number of key areas during the period. Particularly noteworthy was the creation of a new company, Cosalt Wind Energy Limited, a joint venture with APRO, which was announced in July. Cosalt Wind Energy has entered into a framework agreement with Siemens, and has already supplied a number of specialist engineers under these arrangements for various projects.
The Group has also won a new framework contract worth in excess of £30 million over 8 years for the supply of Personal Protective Equipment and associated services to 12 Fire and Rescue Services in South East England. As a result of this contract, Cosalt will provide services to approximately 46% of all the Fire and Rescue Services in the UK, giving the group clear market leadership in this sector.
Although revenues have been depressed by the difficult trading conditions, the cost base has also been reduced to a level more commensurate with current activity levels. Net debt has remained within our budgeted range and at the end of the third quarter on 31 July 2010 was £21.5m.
Following the announcement earlier this month concerning the management changes in the Offshore Division, Mark Lejman, Group CEO, has assumed the role of interim CEO of the division in addition to his Group responsibilities. All key members of the division's management team remain in place led by Sandy Gowing, interim General Manager, a leading technical expert in the offshore lifting and testing industry who has been with the current Aberdeen operation over the last 16 years. The internal review into operating practices referred to in our previous announcement is expected to be completed by mid October. We are confident that the business and accounting procedures are robust and the management continues to provide the same level of support and service to all of our customers.
The Board remains confident of the long term prospects for the Group and believes that the increased activity that we are beginning to see in the North Sea with the consequent renewed focus on investment will lead to increased demand for our services and products as we move into 2011.
17 September 2010
ENQUIRIES:
Cosalt plc (www.cosalt.com) Tel: +44 (0)1472 725100
Mark Lejman, Chief Executive
Mike Reynolds, Finance Director
Evolution Securities Tel: +44 (0)20 7071 4300
Tim Worlledge
Matthew Tyler
Cardew Group Tel: +44 (0)20 7930 0777
Tim Robertson
James Milton