Updated: 1st August 2016
A Scottish maker of offshore containers used by operators in the oil and gas industry has been entered into administration after succumbing to a cash flow crisis in recent weeks.
PressureFab generated turnover worth in excess of £5 million for the full financial year 2014/15 but has been unable to maintain a viable financial position in more recent quarters.
Administrators called in to manage the Dundee business have blamed the ongoing downturn in activity within the oil and gas sector as the key reason behind the company’s difficulties.
Bosses at the business had already been forced to trim their workforce from a figure in excess of 100 down to around 40 over the course of the past 18 months, with the past couple of years having been acutely difficult from a trading perspective for energy sector companies in Scotland and throughout much of Europe and the world.
“PressureFab Ltd is the latest firm to fall victim to challenging trading conditions in the oil and gas sector,” said the company’s newly-appointed administrators in a statement.
“As client orders were cancelled or postponed, the number of new business enquiries reduced significantly, leaving the company with no option other than to cease trading.
“We are currently reviewing the company’s financial position as we seek to complete certain orders and realise stock.”
A total of 42 former PressureFab employees were told in recent days that they were to lose their jobs but administrators are hopeful that there will be buyers for various assets belonging to the company.
“The company is widely considered to be a leading manufacturer for the sector and we anticipate there will be interest in the company’s infrastructure including its property, plant and intellectual property,” appointed administrators from KPMG explained.
News of energy sector companies based in Scotland entering administration has become unfortunately commonplace over the past two years.
The oil and gas industry in the UK is estimated to have shed as many as 84,000 jobs over the course of 2015, with forecasts given in June suggesting that there could be a further 40,000 jobs lost in the industry this year. We have an extensive network of 78 offices offering confidential director support across the UK.