Cosalt gets a lift from £3m Aker contract

The Grimsby-based group said it had been awarded a three-year contract extension with Aker which is worth around 1m a year.

The contract involves Cosalt Offshore fulfilling all Aker Solutions' tooling and lifting equipment requirements in the North Sea.

The deal is for three years with options to extend for a further two years.

Cosalt chief executive Mark Lejman said: "We are delighted that Aker Solutions has renewed its agreement with Cosalt Offshore. This is the latest in a series of multi-million pound, long-term deals that we have secured and underpins our ongoing growth strategy in the North Sea."

Cosalt is one of the leading safety and workwear companies in the industrial, marine and offshore oil and gas markets.

The company provides vital services and bespoke life saving and industry workwear to people exposed to hostile work environments.

Cosalt Offshore has a pan-North Sea network with 300 personnel based in Aberdeen and a further 110 at its operations in Stavanger and Lowestoft.

It has been awarded a number of long-term, multi-million pound contracts recently with clients such as PSN, BP and Subsea 7.

Cosalt is finding trading conditions challenging while customers continue to defer spending.

Low freight levels and delayed offshore oil well drilling were blamed for a 24 per cent drop in annual profits to 5.5m.

The group, which started life in the 19th Century as The Great Grimsby Coal, Salt and Tanning Company, raised 17m through a highly discounted placing and open offer last year to avoid breaching banking covenants.

In 2008 it also quit the last of its legacy businesses, its caravan manufacturing arm.

Now, with secure finances in place, Mr Lejman said the company is looking forward to a stronger performance in the second half of this year.

"We have put a lot of work into making sure that this company is well positioned going forward," said Mr Lejman.

"We believe we are making that progress on margin and in offshore and we are hoping for an uplift in the second half of 2010."

The group is also focusing heavily on costs, and made 3m annual savings in 2009 which included 55 job cuts.

In the 4.5bn offshore market, Cosalt supplies lifting equipment and inspection services to the oil and gas industries.

There it saw annual operating profits tumble 36 per cent to 5.3m, despite revenues growing about six per cent to 44.2m, as the falling oil price at the start of 2009 led customers to defer spending.