A Dundee manufacturer of specialist valve units used in the oil and gas industry saw its losses narrow last year following moves to “right-size” the business following the oil and gas crash.
Newly published accounts show Pacson Limited, which has its headquarters and manufacturing unit at Claverhouse Industrial Park, suffered a significant reduction in business in the year to September 30.
Revenues fell from more than £11.3 million to £6.67m in the year as the company felt the squeeze caused by the lower oil price environment.
However, pre-tax losses were reduced to £81,514 in the year from in excess of £300,000 in 2015 as Pacson restructured its operations. After tax, the loss for the year came in at £56,403.
“Following the oil price crash in 2014, the uncertainty remained in the market throughout 2016 and continued into 2017,” managing director Keith Crawford said in his strategic report to the accounts.
“Whilst the oil price did recover in 2016 – and has remained around US $50 a barrel – this has not been sufficient recovery to allay the uncertainty and so has continued to impact on the sanctioning of new projects/capex (capital expenditure) and opex (operating expenditure) spends.”
Mr Crawford said Pacson had “actively tracked the market” and taken on board feedback from customers during the period.
He said a further round of redundancies had been necessary to “right-size the business” in light of the order book and prevailing market conditions.
“The significant drop in turnover reflects the delayed impact of the crash, as the previous year’s turnover reflected the unwinding of a sizeable order book which had accumulated prior to the crash,” he added.
“The results for 2016 reflected the reduced order intake during the latter part of 2015 and early 2016.”
The accounts show that head count at the company fell from a monthly average of 110 in 2015 to 90 last year. That figure has since slipped to 78 staff.
Mr Crawford, who also owns the company and its parent group Evotek Limited, said Pacson’s primary focus remained on the oil sector, but the group was also assessing additional markets.
He said: “Despite the continued adverse market conditions, the company has continued to make significant improvements and continued with the research and development, both on the existing product range but also developing a new range of high-specification process valves, and is well positioned to take advantage when the market improves.”