South Humber engineering giant On Line Group Ltd has posted healthy growth figures – despite losing a major client to liquidation.
The Immingham company, currently bringing forward an iconic new headquarters, saw turnover hit £41.2 million, a 3.1 per cent increase. And despite a slow down in spending by its national blue chip clients in a tough economic climate, the group believes the positive performance will continue.
On Line attributes the success largely to an upturn in revenue from the design consultancy and project management elements, serving oil and gas, petrochemical, power and other heavy industry processors.
Gross profits were up £1.1 million to £7.1 million too in the year to March 31, following an “excellent recovery” after a difficult year for its Grimsby-based Anglia Engineering Solutions, now rebranded in line with On Line.
In the annual report, group finance director Stephen Laird said: “The directors are pleased to report an excellent year of trading despite some challenging economic factors with success and increased profits evident throughout all key areas of the group in 2019.”
Reflecting on a restructuring to create two main trading entities, with design, consultancy and project management led by former Catch chairman Brendan Conlan and a recruitment division, Mr Laird said: “The outstanding operating profit achieved this year has vindicated this decision made by the directors and the benefits are expected to continue into future years.”
The 37-year-old business revealed bad debt of £824,000, but posted an operating profit increase of nearly £1 million.
Mr Laird said: “These impressive results in the face of a large bad debt highlight the strength of the Group’s trading performance and the strength of the balance sheet has only improved during the year to £11.3 million from £9.9 million in 2018.
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“The directors fully expect that the recent excellent trading results will continue into the future and the group’s strong position in the market can be maintained and strengthened in the coming years.”
Head count was down by nearly 100 year on year, from 463 to 368, however, it is poised to ramp up again, with Mr Conlan having laid out ambitions to underline its credentials as a national engineering and design business. It has gone from having 99 per cent of works on the Humber to 50 per cent, with oil diluted from 95 per cent to less than 50.
On Line recently featured in The Parliamentary Review of Construction and Engineering, with involvement in $1 billion of capital infrastructure projects.
Mr Laird added: “Because of the continued difficult economic climate leading to a reduction in capital expenditure by major clients, the market has become increasingly competitive. There is a constant requirement to communicate both with the client and the current workforce in order to ensure both client satisfaction and workforce stability. This is achieved by the group’s engineering professionalism and maintaining the flexibility to react to the clients’ requirements. This approach sets the group above the competition and hence maintains market share.
“As the economic climate improves and clients’ requirements increase, the Group needs to be responsive and increase personnel levels at short notice.”