Cosalt confident despite caution from customers

OFFSHORE safety experts Cosalt said today that despite caution from its customers it remains confident of its long term prospects, a view boosted by a major contract win.

The Grimsby-based group said that although activity in certain areas of the North Sea has increased and there has been renewed focus on investment in oil exploration, key customers in the North Sea remain cautious.

Sales of work wear equipment within the marine division have continued at a lower level, resulting in a group revenue of £32.5m compared to £35.7m for the period May 3 to August 29 last year, Cosalt said.

However, the group announced that it has won a new framework contract worth more than £30m over eight years for the supply of personal protective equipment to 12 fire and rescue services in the South East.

As a result, Cosalt will provide services to around 46% of all the fire and rescue services in the UK.

Cosalt said that despite the challenging trading conditions it has made good progress in a number of areas, including the creation of a new company, Cosalt Wind Energy Limited, a joint venture with APRO.

Cosalt Wind Energy has entered into a framework agreement with Siemens and has already supplied a number of specialist engineers for various projects.

Cosalt said: “Although revenues have been depressed by the difficult trading conditions, the cost base has also been reduced to a level more commensurate with current activity levels. Net debt has remained within our budgeted range and at the end of the third quarter on July 31 was £21.5m.

“The board remains confident of the long term prospects for the group and believes that the increased activity that we are beginning to see in the North Sea with the consequent renewed focus on investment will lead to increased demand for our services and products as we move into 2011.”