17th Mar 2015 11:09
LONDON (Alliance News) - KBC Advanced Technologies PLC Tuesday reported a drop in annual pretax profit as higher costs more than offset an increase in revenue, but said it has made a good start to 2015.
KBC, which offers consultancy and software services to the hydrocarbon processing industry, said it made a GBP6.7 million pretax profit in 2014, compared with GBP7.1 million in the prior year. Revenue increased to GBP76.0 million from GBP65.1 million, as consulting revenue increased by 17% to GBP55.0 million and technology revenue increased by 17% to GBP21.0 million.
Direct costs, staff and associate costs, depreciation and amortisation, as well as other operating charges, all increased in 2014, eating into the higher revenue and resulting in a fall in operating profit to GBP7.2 million from GBP7.4 million. Finance revenue fell to GBP86,000 from GBP208,000, while finance cost rose to GBP578,000 from GBP476,000, which also contributed to the fall in pretax profit.
"2014 was another good year for KBC, with strong financial performance and continued progress across the group in all aspects of our strategy: to grow our technology business, expand our upstream offering, improve consulting margins and invest for success in growth regions," Chairman Ian Godden said in a statement.
Godden also said that KBC entered 2015 with a "record" pipeline of contracted work amounting to GBP88.0 million and a healthy balance sheet to help it grow. The chairman also said the group will not be complacent considering the fall in the price of oil since last year.
"We are not complacent in the face of continuing uncertainty in the oil and gas markets, and we are taking sensible action to reshape and reposition our business in response to these conditions and to drive profit and quality of earnings. Together these give the board confidence for 2015," Godden said.
"During the second half of 2014 the oil and gas industry experienced a major upheaval, with a significant increase in production in North America and Iraq, an unexpected slowdown in growth regions such as China and a subsequent oil price fall as a result of OPEC choosing not to control the market price. The longer-term implications for the market are still not fully clear, but KBC is assuming a scenario of low oil prices for at least 18 months and some further belt-tightening by our clients. KBC is not affected directly by the US domestic oil exploration downturn since a large proportion of its business is in the downstream part of that market which will be less adversely affected," the chairman added.
KBC increased its final dividend to 1.1 pence from 1.0p. The company didn't pay an interim dividend in 2014 or in 2013.
KBC shares were flat at 85.50 pence Tuesday morning.
By Samuel Agini; [email protected]; @samuelagini
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