Fife subsea group’s ‘year of two halves’

HCS Control Systems sees sales rise and losses narrow

A “year of two halves” saw a Fife-based manufacturer of subsea equipment record a pre-tax loss of £3.9 million.

Based at Viewfield Industrial Estate in Glenrothes, HCS Control Systems specialises in the design, in-house manufacture, assembly and test and servicing of equipment for the subsea oil and gas industry.

The firm has been affected by the global downturn in the industry, which led to its turnover dropping from £13.3m in 2015 to £3.9m in 2016.

Sales rose last year to £5m and its pretax losses narrowed from £4.5m in 2016 to £3.9m for the year to December 31.

In the strategic report within the company’s accounts, director Neil McGuinness said there were signs of the firm returning to profitability.

“The group faces the economic risks associated with the oil sector, particularly the oil price and level of offshore exploration,” Mr McGuinness said. “These risks have continued into 2018 but the market shows signs of improvement.

“2017 was very much a year of two halves. During the first half of 2017 the group continued to incur losses and had to make further staff redundancies.

“In the second half of the year the group moved back into a modest level of profitability. Given the increased levels of activity in the market, the directors are quietly confident that this profitability will gradually improve through the course of 2018.”

Staffing levels dropped from 60 to 43 last year.

At the end of January, a subsidiary company HCS Aberdeen Limited was incorporated which is 100% owned by the group. In April, the subsidiary opened a new facility at Kirkwood Commercial Park in Inverurie which will act as a service hub providing offshore manpower, equipment rental, subsea equipment maintenance, testing and assembly.

The group faces the economic risks associated with the oil sector, particularly the oil price and level of offshore exploration NEIL MCGUINNESS, HCS CONTROL SYSTEMS