Energy Cranes International enjoyed a leap in profits last year ahead of the sale of the firm by one private equity firm to another, underlining the potential of a sector which continues to attract intense interest from financiers.

Accounts for the offshore lifting and materials handling firm filed at Companies House show Energy Crane grew underlying profits, before exceptionals, by 45% to £6.2m in calendar 2007 amid boom times for oil and gas services firms.

Directors highlighted that Energy Cranes, which owns the Sparrows Offshore operation, achieved growth in the core markets of the North Sea, where strong demand for oil and gas encouraged firms to increase activity. UK sales increased by 6% to £56.9m.

However, that rate of increase paled beside the 30% growth, to £57m, achieved in international sales by Energy Cranes. The company recorded 50% of its total turnover of £114m in overseas markets like the US and Asia, up from 45% in 2006. Total turnover increased by 16.6%.

Growth was boosted by the £3.5m acquisition of Aberdeen Hydraulic Services and the purchase of Midland Marine in the US for £12.8m during the year.

The success came ahead of the recent sale of a controlling stake in the company by LMS Capital to Close Brothers, in a deal which valued Energy Cranes at £142m, including debt.

The sale allowed LMS to net £83m for its 95% stake in Energy Cranes, which it created by combining Aberdeen's Sparrows Offshore with Houston-based crane manufacturer American Aero and Titan Industries in August 2003.

LMS made a return of 4.5 times its investment, indicating Close Brothers paid a full price.

Investors are attracted by the organic growth prospects that services firms enjoy at a time when demand for oil and gas prices is expected to remain high.

A spokesman for Energy Cranes said the company was looking forward to another year of growth on several fronts.

Financiers see scope to boost growth through acquisitions in the service sector, which remains fragmented.

Close Brothers supported the recent purchase of Aberdeen-based Baricon Systems by Energy Cranes. This valued the cable and pipe-laying specialist at £8.7m.


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