A “conscious move” into renewable energy is paying off for an Aberdeen firm established more than 40 years ago to support the North Sea oil and gas industry.
Balmoral Group was founded by Jim Milne, 81, in 1980 when it got its start selling goods and services to the likes of BP and Shell.
On the release of its 40th year annual report, the Balmoral Group chairman and chief executive said the firm’s success in renewable energy markets is being driven by investment in technology innovation across its manufacturing divisions, including composite materials and tanks for liquid storage.
The company, which also owns the Balmoral Business Park at Loirston where it is based, said it won the first orders for its patented cable protection system (CPS) for the offshore wind sector in the year to end of March 2021. Balmoral said the CPS has now been successfully installed at a windfarm in the North Sea.
The firm said it has also sold subsea buoyancy products since the year end to floating offshore wind customers.
The offshore wind sector in Scotland is expected to take off in coming weeks as the Crown Estate, which owns the UK’s territorial seabed, announces the next stage of a process leading to the development of wind farms in 15 areas in Scottish waters. Crown Estate Scotland is expected to announce the winners of its Scotwind leasing process in January.
Renewable is the future
Mr Milne said the recent deals were key to Balmoral’s future development.
The orders “allow us to transition our vast experience in oil & gas into the renewables sector,” he said, adding: “We are developing further products for this exciting sector that will see significant investment in the decade ahead.”
The company, which also builds tanks at manufacturing facilities in Llantrisant, South Wales, and Thurnscoe, South Yorkshire said growth in this division was being driven by global demand for energy from waste. Although Balmoral said the tanks business’ turnover fell as construction sites were closed in the first half year due to the pandemic, “operating losses were reduced”.
Mr Milne added: “Energy from waste is also a fast growing sector and our glass fused to steel anaerobic digestion tanks are seeing huge interest around the globe, from the Far East to South America.
“Significant investment in research and development as well as manufacturing technology at our Aberdeen and South Yorkshire facilities has seen the company position itself well for the green energy transition.”
As challenging a year as any
Nevertheless, the year to end of March 2021 “proved to be as challenging a year as any we have experienced,” Mr Milne said.
One of the challenges involved the conclusion of a dispute with shareholders of a business in which Balmoral had invested significantly since 2017, building a majority stake.
The firm’s relationship with Ace Winches’ founders Alfie and Valerie Cheyne had soured dramatically and the couple bought back the business from Balmoral as part of an investment agreement following legal action in November.
The accounts revealed Ace Winches, which was a subsidiary of the group during the financial year, “delivered excellent results despite the difficulties caused by a dispute with minority shareholders of the business”.
It added: “The business has traded profitably since we acquired a majority stake in 2019.”
Following the Cheynes taking back control of the business, Ace Winches announced plans to make more than a dozen of its staff based in Turriff redundant.
Revenues and profits affected
Balmoral revenues in the year ending March 2021m dropped by seven per cent on the previous year to £127.1m, while the group said it maintained “healthy” profitability before taxation of £7.1m, down from £10.3m.
Export sales dominated with 72% of revenues being realised overseas. The Americas remained the firm’s largest market despite falling to £44.9m from £74.5m the prior year.
Nevertheless, employee numbers rose from 687 to 758 in the year.
The group reported an increase in the levels of activity across all divisions in the second half of 2021 but, said it faced challenges with logistics as well as the increasing cost of raw materials in common with most businesses.
This has continued to impact profits on work already contracted, the company said.
Mr Milne paid tribute to the firm’s hundreds of staff: “During the year we faced many difficult challenges and much of the time this had to be dealt with remotely as the office‐based staff worked from home.
“In our factories we had to adjust our working practices to stay Covid-free.
“As ever I would like to thank all staff for the superb effort that they have been putting
in.
“We are now learning how to live with the pandemic; since March 2020 all
staff have done a fantastic job in adapting the way they work to both stay safe
and deliver their input to the business.”
He concluded: “2020/21 was our 40th anniversary as a business and it proved to be as challenging a year as any I have experienced.
“With a strong balance sheet, good levels of liquidity and great management and staff we dealt with the challenges successfully.”
