Contract renegotiations, increased fleet utilisation and an efficiency drive saw Offshore Helicopter Services UK (OHS) deliver an improved performance in its latest financial year.
Operating profit – excluding exceptional items – rose to £1.8 million ($2.3 million) in the 12 months ended 31 March 2024, up from a £3.2 million loss in the same period a year earlier.
The swing back into the black at an operating level came despite turnover falling to £114 million from £128 million the previous year.
OHS, which was acquired from CHC Group by South Africa’s Ultimate Aviation Group on 3 April 2023, attributes the fall in revenue to a “decrease in intercompany activity” of around £16 million, offset by an increase in standing charges of £4.3 million.
But the firm has also been striving to increase the profitability of its operations: over the past two years OHS has “developed and executed” a business transformation project, focused on “improving commercial terms of its loss-making contracts” and restructuring its cost base.
This has put the company on a “stable and sustainable footing”, it states, adding: “[The] focus remains on growing its UK offshore energy market share, organically but also through partnerships and sensible M&A activities.”
Exceptional items, related to onerous contract provision, fell to £1.7 million in the year, down from £4.6 million previously.
Including those payments, pre-tax profit stood at £3.4 million, against £416,000 in 2023.
Interesting-bearing loans totaling £1.84 million from Ultimate Air FX were received in the period, of which £1.58 million was outstanding at the end of the financial year.
Speaking to FlightGlobal at last month’s European Rotors trade show, OHS and Ultimate owner Shaun Roseveare said the operator was planning to add more capacity, including an Airbus Helicopters H175 due to arrive next year and an additional Sikorsky S-92.
It currently operates seven S-92s and six H175s from bases in Aberdeen and Sumburgh in the Shetland Isles.
A pair of leased Leonardo Helicopters AW139s will be added in the second quarter of 2026, providing search and rescue (SAR) cover for oil and gas customers from Aberdeen following a contract renewal. Ultimate, or its forerunners, have held the industry SAR contract for the last 30 years, Roseveare points out.
With Ultimate’s takeover only completed on 3 April 2023, the latest accounts are for the first full year under new ownership and should mark the end of a period of turbulence for the business.
CHC Group acquired the then Babcock Mission Critical Services Offshore in 2021, changing its name to OHS and holding it at arm’s length while the UK Competition & Markets Authority (CMA) probed the deal.
That review concluded in June 2022, with the CMA requiring CHC Group to sell the company to maintain competition in the UK oil and gas segment; Ultimate Aviation agreed to the purchase in December that year.
Last year’s accounts also contained a ‘going concern’ warning related to an unexpected £10 million tax bill from its time under Babcock’s ownership. That issue has since been resolved following an appeal.
Roseveare says he has no regrets over the OHS acquisition, noting that despite the “uncertainty” caused by the protracted sale process, the company “did not lose any customers”.
“We have done a lot of work to turn the business around – we are in a really good position now,” he says.
