Engineering group expects no pick-up in oil and gas but aims to withstand the pressure

The Sheffield-based group told shareholders at its AGM that operations that are dependent on the oil and gas industry are showing resilience in extremely difficult markets.

The price of oil has fallen 70 per cent since its peak in the summer of 2014.

The group said it will take whatever measures are needed to maintain its resilience.

Chief executive John Hayward said: “Our view, along with others in the sector, is that there will be no significant pick-up in the oil and gas market during 2016.

“Whilst we are monitoring our cost base closely and taking action where necessary to ensure the resilience of our businesses, we continue to invest in the future of the group and implement the strategic objectives to broaden our customer, technology and industrial base.”

At a time of falling oil prices, the group’s alternative energy division has brought much-needed diversification.

The firm has said its has a pipeline of £38m in potential orders for biogas upgraders.

Biogas is produced by the anaerobic digestion of organic waste which comes from sources such as landfill sites.

60 per cent of biogas is methane and the rest is largely carbon dioxide.

Mr Hayward said: “The upgrader takes out the biogas and strips out the bits you don’t want. We are selling upgraders to food waste firms, distilleries, landfill sites and farms for them to deal with their organic waste.”

The firm said it now has 99 plants installed worldwide and high hopes for more orders.

“Two recent contract wins, one in the UK, a repeat order, and one in North America, together with a significant pipeline of potential orders across Europe, North America and China are very encouraging,” said Mr Hayward.

“Timing of contract awards has a major bearing on results, as revenue recognition milestones can easily cross between financial years.”

Last year revenue from oil and gas made up 73 per cent of the group’s sales but this has been reduced to 59 per cent.