The most surprising aspect of the collapse in oil prices was the speed in which service companies were affected In the case of Camera Alive, revenue for January and February 1986 was running about 20% ahead of budget and capital spending and expansion plans were being implemented according to budget Everything looked good, and like most other companies we considered the small drop In the price of oil to be a short term fluctuation
In March, April and May, revenue fell to about 15% of that budgeted The panic button had been pressed The offshore oil industry was not spending money If we had been Japanese, we would have been sharpening the ceremonial swords June showed a sudden recovery, with much of the lost revenue recovered, and the recovery extended into August, when the season came to an early halt Looking back on the year, revenue was perhaps 25% down on what had been budgeted
Will the industry ever recover? Will the industry ever be the same again? What can small companies do to protect their future?
In early 1986 the Camera Alive Group was made up of four companies active in four main areas Camera Alive Limited provided photogrammetric services and electronics-based products Camera Alive (Underwater Video) Limited was active in underwater video equipment Camera Alive Marine Equipment Limited manufactured underwater photographic cameras Turner Round Limited was active outside the oil industry From entering the oil industry in 1976, with one company offering consultancy services, the group had expanded into the provision of specialist services and was concentrating on expanding its manufacturing capability
The initial reaction to the reduction in revenue was to stop all unnecessary expenditure, and that was defined as any expenditure which was not a necessity for continued day-to-day trading The secondary action was to review all activities to ascertain which should be allowed to continue and where cost savings could be made Both actions were made especially urgent by the initial reactions of the banks to reduce borrowing limits overnight
Having made a determined effort to keep costs at minimum levels the ‘hatches were then battened down to weather the storm’, which was initially envisaged to be short lived It was soon realized that this was not to be the case, so long term plans were formulated These can be broadly defined within the categories of cooperation, consolidation and investigation
The first action was to negotiate an agreement with Osprey Electronics Limited rather than continue in competition The product lines were compared and rationalized, and it was agreed that Osprey would concentrate on the video products while Camera Alive would concentrate on the photographic products The revised product lines would then be marketed alongside one another as a total British Underwater Visual Imaging package This decision resulted in the winding up of Camera Alive (Underwater Video) Limited.