Liverpool headquartered Bibby Line Group ("the Group") saw revenues dip 15 per cent to £1,450m (2014: £1,715m) in the financial year to 31st December 2015, generating profit before tax of £29.5m (2014: £44m). Given the challenging market conditions, particularly in the offshore oil and gas sector, the Group was pleased to finish the year with significant cash balances and net assets of £298m (2014: £280m) which allows it to capitalise on future opportunities.
The diversified Group, which has a wide portfolio of interests spanning retail, shipping, marine services, logistics and financial services, said that historic lows in shipping rates and oil prices, food price deflation, and continued low interest rates all contributed to reduced turnover and operating profits.
At the end of 2015, the Group sold its Australian Financial Services business, and in early 2016 it sold its Ship Management business. Both transactions realised good value for the Group and strengthened the balance sheet to allow it to invest in the current portfolio of businesses with confidence.
Bibby Offshore
The trading performance of Bibby Offshore, which provides sub-sea services to the oil and gas industry, reflects the difficult market conditions and contrasts with the record results of 2014. Revenue decreased by 37% to £241m (2014: £384m) as fleet utilisation and rates fell, resulting in reduced operating profits of £19.6m (2014: £62.0m).
Throughout 2015 the focus was on right-sizing the business including a reduction of 20% in land-based headcount. Bibby Offshore continued to win contracts with new and existing customers, although overall the pipeline of new business reduced. The business is now concentrating on its core North Sea DSV markets and expansion in the US Gulf of Mexico.
Financial services
The Group's Financial Services business, which provides invoice finance, asset-based finance and cash flow funding solutions to small and medium-sized businesses, grew debts factored by 8.1% to £9.3 billion globally, with funds advanced to over 9,200 clients of £714m at the year end (2014: £732m, £639m on a like for like basis), the reduction in the headline figures reflecting the sale of the business' Australian and New Zealand operations.
Turnover decreased marginally to £167m (2014: £168m) and delivered an operating profit of £22m (2014: £25m).
Distribution
Bibby Distribution, the Group's logistics and warehousing services division, delivered revenues of £217m (2014: £235m). The business underwent significant change in 2015, incurring costs of restructuring the business at all levels, resulting in operating losses of £6.1m (2014: £0.6m). The restructuring has resulted in a leaner business, with faster decision making and a lower cost base. There have been several major successes during the year with the retention of contracts and new business wins.
Retail
The Group's retail division, Costcutter Supermarkets Group, the convenience retail symbol group, saw turnover return to year-on-year growth in the second half of 2015 and EBITDA improving by around £10.5m for the full year with a total turnover of £707m (2014: £776m).
The business is now seeing sales growth month-on-month with stable overheads. The performance through the second half of the year and early 2016 underpins confidence in the business which expects to play a leading part in any future sector consolidation.
Marine
The Group's marine division - whose services span ship ownership, floating accommodation, and hydrographic survey - saw a mixed trading performance resulting in a 16% reduction in turnover to £88m (2014: £105m).
The floating accommodation business saw macro-economic factors in the energy and raw materials sectors lead to many of the projects requiring its vessels being postponed or cancelled. Despite this, the business recorded a good year with costs being managed tightly to reflect the changing environment.
The hydrographic survey business, Bibby Hydromap, suffered from the continued industry downturns in both offshore wind and oil and gas. The unique survey system (d'ROP) was commissioned on-board the newly delivered vessel, Bibby Athena, and has significantly cut the time necessary to undertake cable and pipeline depth of burial surveys.
The ship owning business experienced very low rates in the dry bulk sector and reasonable rates in the product tanker market allowing further vessels to be sold.
Post year end the new vessel Bibby WaveMaster 1 was ordered from Damen shipyard to accommodate maintenance crews for the offshore wind farms further from shore.
Other businesses
Significant progress was made in building the asset base and national coverage in the plant hire business (Garic) and developing the unique returnable packaging solutions business (PLS) during the year. The woodland cemetery business opened its fifth site at Heatherley Wood.
Commenting on the Group's performance, Sir Michael Bibby, Managing Director of Bibby Line Group, said: "Low oil prices, reductions in key global trade flows, and low interest rates have combined to create challenging operating conditions.
"As a business we have responded to these challenges and have again focused on developing unique products and services, productivity improvements and reviewing where we can consolidate the market segments we operate in.
"Looking ahead, we're in a strong position. We have the appropriate financing in place to handle unexpected events whilst taking up exceptional investment opportunities to deliver an even better business as the next upturn approaches."
Paul Drechsler, Chairman of Bibby Line Group, said: "Throughout 2015 we saw challenges in many parts of our sectors and geographies. However, the macro-economic pressures have not altered our strategy for achieving diversified growth and long term shareholder value.
"The year ahead seems set to be at least as challenging as a result of global and economic uncertainties, compounded by risks and unknowns associated with the EU Referendum, which will impact supply, demand and pricing in many of our businesses. The Group will continue to execute its strategy, accelerating pace where necessary and capitalising on the opportunities that will inevitably arise in such circumstances."
Bibby Line Group, which employs over 6,000 people, also continued its commitment to charities and good causes. During the year, £884,000 was donated to 461 charities around the world, including £649,000 under its 'Giving Something Back' employee fundraising programme. Since the company's bicentenary in 2007, the initiative has raised £8.7m for over 1,000 charities.