THE owners of Denholm Oilfield Services hope to float the business on the stock market next year although it has suffered a sharp drop in North Sea business amid the crude price plunge.
The chairman of the company, John Denholm, said directors felt the firm would be ready to float on the AIM market in the second quarter next year. He expects the company will seek to raise up to £50m from investors to support growth.
However, noting that investor sentiment had turned against the oil and gas sector following the fall in the crude price since June last year, Mr Denholm said: “We are not sure the market’s necessarily ready for us.” He added: “We are watching and waiting.”
The oil services group was demerged from the historic Glasgow-based J&J Denholm shipping to seafood combine in the summer, in an exercise that was seen as the prelude to a flotation.
While no timeframe was set for the flotation at the time, the outlook has worsened for the sector following the renewed fall in the oil price since then.
However, Mr Denholm said the oil services business has continued to perform well overall.
“In spite of what’s happened to the oil price over the last two years our business has moved forward with more turnover, more profit. We anticipate 2015 will be a strong year,” he said.
Denholm Oilfield Services made £15.9m operating profit on £172m sales last year.
The chief executive of the firm, Michael Beveridge, said its North Sea division had suffered a significant fall in turnover this year reflecting a big drop in spending on new projects in the area.
He said trading conditions could get harder off Scotland, noting: “I think quarter one and quarter two will be as difficult it gets.” It could be 2017 before any recovery is seen in the North Sea.
However, while oil and gas producers and services firms have shed more than 5,500 jobs in the UK this year, Denholm Oilfield Services has made only limited cuts in staffing.
“You can count on one hand the redundancies we have made,” said Mr Beveridge. “We are a people business and that would be the last resort for the business.”
With big operations in Aberdeenshire, Denholm Oilfield Services employs 500 people in the UK, and around 4,000 globally.
Mr Beveridge said Denholm Oilfield Services has performed well in the Caspian and Middle East markets, where it now does around 90 per cent of its business.
Work levels have held up in these areas. Operating costs are lower than in the North Sea.
Denholm Oilfield Services is in the second year of a sponsorship deal with Glasgow Warriors rugby team, worth £55,000 annually. This is expected to help raise the firm’s profile.
Former Warriors star Ali Kellock, who is commercial operations manager for the club, said Denholm Oilfield Services could help it build links with other clubs and potential supporters in the oil and gas heartlands of northern Scotland.
Mr Denholm said conditions in the shipping market are difficult but J&J Denholm group is on course for another good year. The group was founded in 1869 as a shipping business by his forebears John and James Denholm.
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