RPS shares drop as oil-market woes hit energy division

Shares in RPS Group dropped sharply on Thursday after the industrial consultancy outfit said it was feeling the impact of the continuing volatility in the oil and gas sector.

The company also announced the £22.3m purchase of Norwegian project management and training company Metier Holding.

RPS, which helps clients develop energy resources across the complete asset life cycle, said this side of the business has had a slower-than-expected start to the year.

"The market stabilisation which seemed to be developing in February proved fragile," it said.

However, the company pointed out that there has recently been an "encouraging increase" in the asset valuation workload, related to transactions and financing.

As for RPS's other businesses, such as built and natural environment consultancy, they have all grown year-on-year helped by recent acquisitions and improving macro conditions in the UK and US.

"Further acquisitions are under consideration," the company said.

RPS revealed it has spent NOK267m on Oslo-based Metier, which works mainly on public- and private-sector infrastructure projects. It will be integrated with OEC, the Norwegian project management consultancy acquired by RPS in October 2013, with less focus on the oil and gas sector.

By 08:21 on Thursday, the stock had declined 8.7% to 215.59p.