STIRLING-based Dron & Dickson has posted its third consecutive year of record turnover for the 12 months ending May 31, but said profits for the period were hit by a one-off provision for a contract dispute.
In a Companies House filing, the business posted turnover of £45.5 million, up by 12 per cent from 12 months previously.
The firm, which designs and supplies electrical systems for use in hazardous areas on oil rigs, highlighted that 90 per cent of its business was generated in the UK, and said overseas sales grew by 40 per cent for the second year in a row.
Pretax profit amounted to £2.1m, down from £2.2m, with operating profit reaching £2.1m and £2.4m respectively. Operating profit was hit by a £332,717 exceptional item, which it said mainly concerns a specific provision for an individual debt that is thought to be "irrecoverable".
The company also said in the filing that it "continued to benefit from high levels of activity in the oil and gas sector" and maintained its "excellent" performance in engineering services in the year.
Looking at outgoings, cost of sales increased from £32.3m to £36.2m, while distribution costs hit £222,531, up from £181,228. Administrative expenses reached £7.0m, up from £6.1m 12 months previously.
Turning to staff costs, these amounted to £9.4m, up from £9.1m, although staff numbers including directors fell by 20 to reach 162. Its number of offshore workers specifically fell by 18 to reach 86.
Dron & Dickson was incorporated in 1927, and originally supplied explosives to the mining and quarry industries before moving into oil and gas in the 1970s.
It said its net assets as of May 31 increased by 23 per cent year on year to reach £4.6m, with dividends paid on equity capital amounting to £604,029, up from £363,828 in the year-ago period.
In terms of strategy, the firm said "The extraction cost of deepwater oil is especially high in Brazil and the board decided in October 2014 to close its operations in Rio and increase focus on the UK and the Middle East."
It said the group structure was "simplified" in April when all of its Middle East operations were concentrated in Abu Dhabi-based Totus Energy Electromechanical Contracting, which it acquired for more than £206,000.
Additionally, Dron & Dickson JLT and Dron & Dickson Services "became superfluous and were non-trading at the year-end" due to staff transfers to other group companies, according to the filing.
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