Diversification pays dividends as PE-backed Silixa delivers 96% year-on-year growth

Source: press release, 22 October 2020

Silixa’s CEO, Glynn Williams
Silixa’s CEO, Glynn Williams (photo: Silixa)

Silixa, the specialist service company delivering distributed fibre optic monitoring solutions for the world’s most demanding data acquisition challenges, has announced 2019 as a breakthrough year for the firm’s financial and strategic performance.

Backed by Lime Rock Partners, Chevron Technology Ventures, and Equinor Ventures, the company’s global turnover grew by 96% to GBP 20.35 million. In the same period, profit margins also increased from 48% to 51% and EBITDA grew to GBP 2.75 million despite significant reinvestment into the business.

CEO, Glynn Williams, credits the company’s diversification strategy with its success: “Since 2007 Silixa has focused on serving the oil and gas sector, deploying and developing the highest quality distributed fibre-optic sensing-based monitoring solutions on the market. In 2019, we doubled down on our diversification strategy, entering sectors in need of accurate monitoring solutions like ours, but which were historically underserved. The speed and extent to which that strategy has paid off points to just how much benefit these markets get from technology like ours.”

The firm now operates across five sectors outside oil and gas: alternative energy, mining, environment and earth sciences, infrastructure, and defence. Key elements of Silixa’s success included the adoption of the innovative FibreWrap™ process flow metering system by the mining sector, and the transfer of oil and gas micro-seismic solutions to improve the efficiency of geothermal power production. The Carina® Sensing System has been introduced as an innovative and cost-effective solution for long-term monitoring in the rapidly emerging carbon capture and underground storage (CCUS) market.

With greater diversification in 2019, 44% of revenues came from non-oil and gas operations, with the environmental and infrastructure division alone growing by 136%. Silixa’s heritage in oil and gas continued to deliver however, with 109% sales growth, driven by the award-winning Carina® XwellXpress™ hydraulic fracking diagnostic service and Carina® Subsea 4D solution for offshore and deepwater sectors.

Williams continues, “2019 was a landmark year for Silixa, but we haven’t faded in 2020. The Silixa team has done a tremendous job in responding quickly to create a Covid-Secure working environment for our manufacturing activities and uninterrupted service to our customers. The pandemic has had an impact on the unconventional oil and gas sector; however, our orders have already returned strongly as customers recognise the quality of actionable frac diagnostic data from our XwellXpress logging service. In our other sectors, we are still growing and delivering large, long-term projects, so fortunately we have been protected from the COVID-19 fallout. In fact our operational footprint has now extended to all seven continents. Our customers tend to be sticky: once they start working with us, they rarely interrupt that.”

The business has taken steps to ensure that 2019’s success is replicable in the long-term, investing heavily in new products, R&D and organisational development. Improved working capital management has also delivered a GBP 2.8 million increase in net assets over the same period.

Alison Goligher, Silixa’s Executive Chairman, adds, “The current complex macro environment is accelerating the energy transition, and data driven solutions will be essential for our customers. For example, the base metal miners, dam owners and CCUS asset owners all need to be able to justify safe, compliant operations as well as minimising operating costs. Silixa is a prime example of a company that has pivoted into the ‘new’ energy world without losing sight of its heritage. Performance like this is testament to the technology, the management team, and their strategic vision.”