Crane hire firm goes into administration amid oil and gas market challenges

A crane hire firm with bases in Aberdeen and Grangemouth has fallen into administration with the loss of 11 jobs amid tough conditions in the key oil and gas and construction sectors.

Directors of Whyte Crane Hire Limited appointed administrators from KPMG after the company suffered cash flow problems following a drop in sales.

Joint administrator Blair Nimmo said that despite the extensive efforts of the Whyte family the company had been unable to continue trading “in light of significant liabilities and cashflow difficulties”.

He said the company had been affected by challenging market conditions in the Scottish construction and oil and gas sectors.

 KMPG noted that directors of the firm had injected personal funds into the business in order to meet critical payments but had been unable to reverse the decline in its performance.

All 11 employees of the firm were made redundant as a result of the firm appointing administrators.

The experience of Whyte Crane Hire provides further evidence that the fall out from the crude price plunge that started in 2014 is still impacting on firms that provide support services for North Sea oil and gas companies.

 Cuts in North Sea activity have posed challenges for firms in the supply chain that have high fixed costs to cover. These include companies that hire out expensive plant such as cranes and rigs.

While the partial recovery in crude prices since late 2016 has encouraged firms to invest in North Sea projects the resulting increase in activity has not been strong enough to ease the pressure on some companies.

KPMG noted that Whyte Crane Hire had been profitable historically. It had faced increased competition in recent years and challenges in securing work at a sufficient margin to cover the high fixed costs of its crane fleet.

The latest accounts for Whyte Crane Hire filed at Companies House show its turnover fell to £10.7 million in the year to June 30 2108, from £11.5m. Profits fell to £0.3m from £0.4m. In the accounts directors said matching the availability of cranes to the market remained a challenge.

KPMG said a separate company operated by the Whyte family, Whyte Crane Services Limited, will continue to operate. It is unaffected by the administration of Whyte Crane Hire

Source: The Herald