Cosalt's profits rise after cutting costs

In the 26 weeks ended May 2 2010, group sales were 48.3m, down from 52.8m recorded in the same period last year, reflecting caution across the UK oil and gas sector. Profit before tax was 1m, compared to 500,000 in the same period last year.

The Grimsby-based company said its "gold standard" approach to all aspects of critical safety equipment had been underpinned by new contract wins and the retention of existing contracts.

The company has been awarded new framework contract worth more than 30m over eight years for the supply of personal protective equipment and associated services to 12 fire and rescue services in the South East. The company's trading is traditionally stronger in the second half.

Mark Lejman, the chief executive, said: "In 2009 the company was refinanced and restructured to focus on being a specialist provider of critical safety equipment and services for the offshore oil and gas and marine industries.

"This has resulted in a more streamlined business, operating off a lower cost base with an improved balance sheet. The offshore division particularly in the North Sea continued to see reduced spend by its clients on capital projects affecting volumes.

"In marine the increase in profitability and margins shows the benefits of actions taken last year to reduce the cost base. For workwear the securing of the long term major south east contract with the fire and rescue brigades assures Cosalt's position as the clear market leader in this sector.

"The events in the Gulf of Mexico over the last few months highlight the ever increasing importance of HS&E (health and safety) services we offer in our market sectors".