Profits hike for energy firm Wood Mackenzie

Group Business Correspondent

Friday 28 September 2012

WOOD Mackenzie, the Edinburgh-based energy oil and gas information specialist, is in line for another year of strong growth after increasing profits by 36% in 2011.

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MARK WILLIAMSON

Acquired by a US private equity business for £1 billion in July, Wood Mackenzie is one of Scotland's most successful businesses. It grew earnings before interest, tax, depreciation and amortisation to £70.7 million in 2011, from £56.4m in 2010.

The latest success is likely to mean more good news for employees, whose average salary surged to £78,200 in 2011, compared with £68,500 the year before.The company has 279 staff in Edinburgh and a total of 820 worldwide.Many employees have made fortunes on the back of Wood Mackenzie's success in recent years.Around 340 staff members are believed to have shared windfalls averaging £250,000 when Hellman & Friedman bought a controlling stake in the business in July from Charterhouse.Chief executive Stephen Halliday likely made considerably more.Management and staff own around 24% of the shares in the firm, putting them in line for more bumper payouts if Hellman & Friedman sells or floats the company in line with the usual private equity investment strategy.Commenting on the 2011 results, Mr Halliday said the deal with Hellman & Friedman "provides the financial platform for Wood Mackenzie to pursue its goals of further geographical and product expansion".While the outlook for the global economy is cloudy, firms in growth industries such as oil and gas and metals are prepared to pay big sums to access the kind of specialised information Wood Mackenzie holds in its huge databases.The emergence of alternative fuels, such as coal bed methane, combined with the trend to outsource functions like research, has boosted demand for Wood Mackenzie's services.The group is hiring an additional 30 staff to cope with the workload. It has offices in 21 cities around the world.In the 2011 accounts, directors said the firm has been developing research products that will "make a strong contribution to revenue, profit and operating cash flow growth in 2012".They added: "We will also consider making niche, in-fill acquisitions in information-rich businesses which complement our existing offerings, extend our customer base and supplement our plans for consistent, sustainable and profitable organic growth."The group is thought to have made a strong start to the current year. It has used acquisitions to build expertise in areas like coal and metals.In the year to December 31 Wood Mackenzie increased revenues by 24% to £158.3m.Originally a stockbroker, Wood Mackenzie started researching the North Sea oil industry in 1973. Management bought the company out of Deutsche Bank for £26m in 2001, with backing from Bank of Scotland.Charterhouse bought a controlling stake in Wood Mackenzie from Candover for £550m in 2009. That deal is believed to have resulted in employees sharing windfalls totalling £100m. It retains a 13% stake.The average number of employees rose by 8% in 2011, to 703 from 649. The group paid £54.5m salaries in 2011 up from £44.5m in 2010. The highest paid director earned emoluments and pension contributions totalling £398,438 in 2011, up 9% from £366,000 in 2010.

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Profits hike for energy firm Wood Mackenzie

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