AGM Statement

RNS Number : 9867N

Velosi Limited

22 June 2010

 



  Velosi Limited ("Velosi" or "the Group")

AGM STATEMENT BY THE CHAIRMAN

John Hogan, Chairman of Velosi, the provider of Testing, Inspection and Certification services to major national and multinational oil and gas companies, will make the following statement at Velosi's Annual General Meeting being held today at 11.00 a.m.:

"As anticipated, Velosi continues to perform well despite the more challenging market environment. Building on a strong base, with 60% of forecasted revenues already under contract for 2010 at the outset of the year, the Group is continuing to trade in line with market expectations.

Volatility in oil and gas prices has led to a more cautious approach by the major oil & gas companies towards new projects and a subsequent reduction in capital expenditure across the sector over the last 18 months. There is however an over-riding need to ensure that all new and existing projects meet the required safety standards and this is a core driver for our business. The recent large oil spillage in the Gulf of Mexico has further served to highlight the importance of safety and the significant potential downside that exists for operators.

So far in 2010, the Group has continued its excellent retention record for existing contracts and won further new contracts particularly in the Middle East and Africa.  Such wins include an inspection contract with Qatar Petroleum estimated to be worth approximately $5m over 3 years from August 2010, and a third party inspection contract with Abu Dhabi Ports Company estimated to be worth $6m to Velosi over 4 years from January 2010, with potential for this to increase over the life of the contract.

While activity levels are relatively subdued, there are some areas or 'hot spots' where there is continuing significant investment such as Brazil, Kazakhstan, Australia and West Africa. We are investing in developing our presence in these regions alongside the major operators, either through establishing an office in the region, expanding existing resources or by creating local partnerships to enhance our services. 

Since the early part of last year, the Group has focused on maintaining a strong cash position to support ongoing activities and invest in developing the business through new office openings and support infrastructure. In 2010, new offices have opened in Thailand, Pakistan and Poland.  A local presence is fundamental to our ability to deliver the level of services our customers require and this model is well proven by the Group's track record to date.  These investments in developing the business are adding to the Group's cost base in the short term, in return for which we expect these new areas to contribute to growing the Group's revenue and profitability and diversifying the Group's geographical offering.

In addition, we continue to focus on ensuring the business operates on a streamlined cost base, whilst also keeping the potential to acquire companies with geographic or technical abilities that would enhance the Group's ability to service existing or potential clients.

We look forward to reporting on the performance for the first six months of the year in more detail at our half year results in September".

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For further information, please contact:

Velosi	Dr Nabil Abdul Jalil Joe Vincent	020 7930 0777
Strand Hanson	James Harris Richard Tulloch	020 7409 3494
Charles Stanley Securities	Mark Taylor	020 7149 6000
Cardew Group	Tim Robertson Catherine Maitland	020 7930 0777

 

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