TIDMTGP
RNS Number : 3612D
Tekmar Group PLC
21 June 2023
TEKMAR GROUP PLC
("Tekmar Group", the "Group" or the "Company")
UNAUDITED INTERIM RESULTS
For the 6-month period ending 31 March 2023
Tekmar Group (AIM: TGP), a leading provider of technology and
services for the global offshore energy markets, announces its half
year results for the 6-month period ending 31 March 2023 ("H1 2023"
or the "Period").
Headlines
The Group's financial performance is improving and is in-line
with management expectations for the Period
-- Revenue of GBP17.7m (HY22: GBP13.0m) with strong growth
across both Offshore Energy (37%) and Marine Civils (35%)
divisions, compared with prior year comparator
-- Gross profit margin for the Period increased to 28% (HY22:
22%) , driven by strong variation and commercial management
-- Adjusted EBITDA loss of GBP0.6m (HY22: loss of GBP1.8m),
attributable to non-cash FX movement of GBP0.8m during the Period.
Excluding this FX loss Adjusted EBITDA is GBP0.2m, reflecting
stronger underlying trading performance and enhanced margins.
-- On a like for like basis, excluding FX gain of GBP149k in
HY22 and GBP0.8m loss in HY23, there is a GBP2.2m improvement in
underlying trading EBITDA YoY
-- On a statutory basis Group loss before tax was GBP1.8m (HY22: GBP3.2m loss)
-- Expect business to break even at an Adjusted EBITDA level for
the current financial year, with revenue in the region of GBP40m,
of which over 90% is already secured
Record order book and recent landmark contract awards highlight
the appeal of Tekmar's differentiated and engineering-led
solutions, and an improving market environment for commissioning
offshore energy projects
-- In December 2022, selected to design, manufacture and supply
172 Cable Protection Systems (CPS) for Dogger Bank C Offshore Wind
Farm, following the previously announced Dogger Bank A & B
contracts, which when delivered is expected to be the world's
largest global offshore wind project
-- Awarded US$10m of contract in January 2023 for pipeline
support and protection for a major subsea customer in the Middle
East
-- GBP5m contract awarded in May 2023 to design, manufacture and
supply Cable Protection System Solution ("CPS") for delivery in
2024
-- The above contract awards support growth in the order book to
GBP26m as at the end of May 2023, a record high for the Group
Business stabilised and balance sheet significantly
strengthened
-- In April 2023, the Group successfully completed an equity
fundraise with SCF and other shareholders totalling GBP5.2m, net of
expenses. This significantly strengthened the cash position of the
Group post period end
-- Ongoing strategic partnership with SCF, with Colin Welsh and
Steve Lockard appointed to the Board and additional investment of
GBP18m available through the committed convertible loan note
facility ("CLN")
-- Cash on the balance sheet of GBP3.7m as at 31 March 2023,
with net debt of GBP3.3m as the GBP3m CBILs Loan and the GBP4m
trade Loan were fully drawn. This excludes the fundraising and CLN
facility referenced above. Cash on the balance sheet as at end of
May 23 was GBP2.8m with net debt of GBP1m. The GBP3m CBILs loan
continued to be fully drawn and GBP0.8m of the GBP4m trade loan was
drawn.
H1 2023 financials
6M ending 6M ending 12M ending
Mar-23 Mar-22 Sep-22
Unaudited Unaudited Audited
GBPm GBPm GBPm
Revenue 17.7 13.0 30.2
Adjusted EBITDA(1) (0.6) (1.8) (2.1)
Sales KPIs
6M ending 6M ending 12M ending
Mar-23 Mar-22 Sep-22
Unaudited Unaudited Audited
GBPm GBPm GBPm
Order Book(2) 23.7 20.1 15.6
Order intake(3) 24.5 22.7 33.3
Enquiry Book(4) 423 302 370
Book to Bill(5) 1.4 1.7 1.2
Alasdair MacDonald, CEO, commented:
"We are delighted to have successfully concluded the strategic
review process, welcoming SCF as a highly complementary strategic
partner and significantly strengthening the balance sheet with the
fundraise we completed in April. With our lower risk, lower cost
and differentiated offering resonating strongly with the industry,
the business can look forward now with real confidence to
leveraging our lead position as the market accelerates its
investment in offshore wind through 2030. Our near-term priority
remains restoring profitability to the business, creating a solid
platform to drive further profitable growth as the business scales,
supported by investment, to create a leading offshore energy
products and services business. As we complete this transition, we
continue to expect the business to break even at an Adjusted EBITDA
level for the current financial year, with revenue in the region of
GBP40m, ahead of the business generating positive Adjusted EBITDA
in FY24."
Notes:
(1) Adjusted EBITDA is defined as profit before finance costs,
tax, depreciation, amortisation, share based payments charge,
and exceptional items is a non-GAAP metric used by management
and is not an IFRS disclosure.
(2) Order Book is defined as signed and committed contracts
with clients.
(3) Order intake is the value of contracts awarded in the Period,
regardless of revenue timing.
(4) Enquiry Book is defined as all active lines of enquiry within
the Tekmar Group. When converted expected revenue recognition
within 3 years.
(5) Book to Bill is the ratio of order intake to revenue.
Enquiries:
Tekmar Group plc
Alasdair MacDonald, CEO
Leanne Wilkinson, CFO +44 (0)1325 349 050
Singer Capital Markets (Nominated Adviser and
Joint Broker)
Rick Thompson / George Tzimas / Alex Emslie +44 (0)20 7496 3000
Berenberg (Joint Broker)
Ben Wright / Ciaran Walsh +44 (0)20 3207 7800
Bamburgh Capital Limited (Financial media &
investor relations)
Murdo Montgomery +44 (0) 131 376 0901
About Tekmar Group plc
Tekmar Group plc (LON:TGP) collaborates with its partners to
deliver robust and sustainable engineering led solutions that
enable the world's energy transition.
Through our Offshore Energy and Marine Civils Divisions we
provide a range of engineering services and technologies to support
and protect offshore wind farms and other offshore energy assets
and marine infrastructure. With near 40 years of experience, we
optimise and de-risk projects, solve customer's engineering
challenges, improve safety and lower project costs. Our
capabilities include geotechnical design and analysis, simulation
and engineering analysis, bespoke equipment design and build,
subsea protection technology and subsea stability technology.
We have a clear strategy focused on strengthening Tekmar's value
proposition as an engineering solutions-led business which offers
integrated and differentiated technology, services and products to
our global customer base.
Headquartered in Darlington, UK, Tekmar Group has an extensive
global reach with offices, manufacturing facilities, strategic
supply partnerships and representation in 18 locations across
Europe, Africa, the Middle East, Asia Pacific and North
America.
For more information visit: www.tekmargroup.co.uk .
Subscribe to further news from Tekmar Group at Group News .
INTERIM REPORT FOR THE 6 MONTHS TO 31 MARCH 2023
CEO overview
A key priority for me since assuming the role of CEO has been to
stabilise the business and restore profitability as we transition
the Group to a stronger engineering-led culture that sets the
business up for sustained success, delivering lower installed cost
and lower risk solutions as a leading offshore energy products and
services business. Today we are reporting an Adjusted EBITDA loss
of GBP0.6m, when adjusted for non-cash FX headwinds of GBP0.8m,
this provides an underlying trading performance of GBP0.2m Adjusted
EBITDA profit. For the 12-month period to September 2022 we
reported a loss at the Adjusted EBITDA level of GBP2.1m, being a
loss of GBP1.8m for H1 and GBP0.3m for H2; a GBP2.9m loss was
reported for the 12 month period to September 2021. The financial
performance for the second half of 2022 and the first half of 2023
illustrates the actions we have undertaken to stabilise the
business are working. It is particularly encouraging to see the
improved financial trajectory coming through given the transition
has been undertaken through a period of industry headwinds,
compounded by the impact of legacy contracts on gross margin, and
the Group's relatively weak balance sheet. With the successful
conclusion of the strategic review completed in April 2023, the
strategic partnership with SCF and the related fundraise, the
stability of the business has been secured and we can look forward
with renewed confidence. Now our attention is firmly focused on
driving the profitability of the business through operational
improvements, and winning in the market, leveraging our strong
reputation in the industry and working closely and effectively with
our valued customers and partners.
Review of near-term priorities
Return to Sustained Profitability. We are currently over 18
months into a programme of business wide improvement initiatives in
areas such as engineering discipline, project risk management,
contract negotiations and sales effectiveness, disciplined cash
management, supply chain strategy and operational excellence. With
the benefit of the recent investment, we are taking the opportunity
to target further efficiency gains across the business. We are
developing a number of action plans on this, including greater
integration, and we will update the market further on these plans
in due course. These initiatives are all in support of our defined
wider group strategy to strengthen our integrated, engineering-led
offering and gross margin stabilisation and profit improvement.
Strengthening the core business today, allows the operating
leverage of the business to drive a step-change in profitability as
volume growth accelerates reflecting a strengthening market
outlook.
Building a better quality pipeline and order book. As we focus
on restoring sustainable profitable growth for the business, we are
encouraged by the strength of our enquiry book, which is consistent
with a recovering market, and are seeing signs of improving supply
chain pricing to acceptable margin levels. We are seeing the
strengthening of the market, with larger volumes of enquiries in
the market converting into orders, supporting the record order book
of GBP25.7m as at May 2023.
Consistent with our margin improvement focus, we are focused on
commercial discipline and leveraging our technology leadership to
capture more favourable project economics as we convert the enquiry
book into firm orders. New contracts are being secured at more
favourable project margins at the outset and include more
favourable cost escalation protection and milestone payments to
de-risk the projects for Tekmar. We are encouraged by the progress
here in securing lower risk projects and our opportunity to partner
with the tier 1 contractors and developers to address lower risk,
lower installed cost solutions for complex engineering projects as
the offshore wind market develops and matures.
Cash flow and liquidity. We have strengthened the liquidity
position of the Group but remain focused on a disciplined approach
to cash, working capital management and improved cash generation.
Cash used in operations in the first half of GBP3.8m reflects short
term working capital requirements which are expected to unwind over
the course of the year. We are also in discussion with our
relationship bank relating to the renewal of our existing trade and
CBILs facilities, with these discussions progressing in line with
planned timeframes.
Customer and employee engagement. A consequence of running a
strategic review process is that it creates uncertainty for
customers, employees and partners. Employee engagement remained
high through the period and the successful conclusion has
re-energised confidence across the Group. All employees were
awarded a cash bonus of GBP1,000 in recognition of their
considerable efforts in supporting the business through the period
of strategic review.
Customer engagement has been an area of focus for the senior
leadership group, and we have prioritised making sure customers
understand the positive consequences of securing the strategic
investment from SCF and how this transforms the future prospects of
the Group whilst maintaining Tekmar's identity as an independent
partner in the industry. There is mutual excitement about the
leadership role a stronger Tekmar can play in the industry, an
industry which requires the delivery of larger projects requiring
more complex engineering solutions that we are well set up to
deliver.
As previously reported, we are continuing to support our
industry partners to assess and address some issues relating to
legacy Offshore Wind Systems installed at offshore wind farms. As
we have previously highlighted, the precise cause of the issues are
not clear and could be as a result of a number of factors, such as
the absence of a second layer of rock to stabilise the cables. We
remain committed to working with relevant installers and operators,
including directly with customers who have highlighted any issues,
to investigate the root cause and assist with identifying potential
remedial solutions. Whilst this consumes company resource and
senior management attention, it is consistent with our responsible
approach to supporting the industry to resolve these legacy
issues.
In addition, we have introduced new solutions for customers and
have embedded the industry learnings to support our superior
technical offering for new installations alongside using our
expertise and capability to support clients across the wider
lifecycle of offshore wind projects. This supports our aim to
diversify into the opex market whilst offering our customers a
lower risk solution and a lower installed cost through our industry
leading knowledge.
Leadership. Leanne Wilkinson has been appointed as Group CFO,
having assumed the role of interim CFO in December 2022. Leanne has
been with the business since June 2020, is a highly capable finance
leader with a deep understanding of the business and was recruited
with a view to assuming the role of CFO in time. Additionally, the
team has been further strengthened with Bill Boyle joining the
Group as Chief Commercial Officer, effective April 2023. I have
known Bill for three decades and he brings great industry
experience and a track record as a leader in global energy services
businesses.
We are also benefitting from the high calibre additions of Colin
Welsh and Steve Lockard to the Board, as representatives of SCF.
Colin is a Partner of SCF and brings extensive global energy sector
expertise, including through his role as Head of International
Energy Investment Banking at Simmons & Company International
prior to joining SCF in 2017. Colin's track record in the industry
as an adviser and investor in building valuable companies is a
major asset for us to draw on. Steve brings over 35 years of
experience in global operations leadership and has been an
operating partner of SCF since 2021 where he supports energy
transition investments and company platform building, both highly
relevant to the journey Tekmar is on. He brings great industry
perspective on building valuable businesses in the global wind and
broader energy industry, including through his roles at
NASDAQ-quoted TPI Composites, where he was formerly CEO and is
current Chairman, and where he led the company's transformation
from a New England based boat builder to the largest independent
global wind blade manufacturer. He is also an advisor to Keystone
Tower Systems, an innovative manufacturer of wind turbine
towers.
Recap of the Strategic Investment and Partnership with SCF.
We are excited to be partnering with SCF and look forward to
delivering the value of this partnership on the public market for
the benefit of all investors and stakeholders. SCF and Tekmar have
a shared ambition to build a top tier global offshore wind services
company, through the company's core organic growth strategy and, at
the right time, through acquisitive growth. The investment by SCF
is a major catalyst for creating this growth platform and by any
measure is transformational for the future prospects of the Group.
The Board also recognised the exceptional track record of SCF,
built over 30 plus years, in supporting value creation in offshore
energy companies.
It is also worth highlighting that SCF identified Tekmar as the
business of choice for building a global, offshore wind services
platform. This recognised Tekmar's market leading position in the
industry and also reflects the diligence undertaken by SCF to
validate the growth opportunity and Tekmar's strong standing in the
industry, particularly with its customers.
Alongside the initial equity investment of GBP4.275m through SCF
(investing through SCF-IX L.P.) and Steve Lockard, SCF Partners has
also committed up to a further GBP18m investment through the
creation of the CLN. The CLN is intended to provide the Company
with funding for the primary purpose of financing acquisition-led
growth, although is also available to finance significant organic
growth initiatives that are consistent with the Group's strategic
plan. Accordingly, the CLN is an effective mechanism of providing
medium-term visibility of growth funding for the Company and
creates a "war-chest" to be deployed as and when appropriate to
drive acquisition led growth.
Market overview
The global market for offshore wind, the Group's core market,
continues to strengthen as energy markets are aligned to the
commitment of the United Nation's global coalition for net-zero
emissions by 2050. Most notably:
-- Global capacity is forecast to reach over 269GW (installed or
underway) by 2030, from a commissioned capacity of 59.2GW today,
with current visibility of over 300 projects. (1)
-- Continued energy security concerns triggered by Russia's
invasion of Ukraine, with many countries accelerating their
renewable energy agenda.
-- Over 47% of projects entering construction by 2035 are
forecast to be in the UK, US and China, markets where Tekmar is
already active and well-positioned to benefit from future growth.
(1)
-- The global operation and maintenance (O&M) market
continues to scale up and is now valued at GBP19.5bn per year by
2035, offering significant growth potential for the Group. (1)
-- The emerging floating wind market outlook is now at 13.9GW,
installed or underway by 2030, motivated by a requirement to cut
carbon emissions and reduce dependency on Russian energy. (1)
Adjacent offshore energy markets are strengthening due to
renewed investment in offshore energy markets given the importance
of energy security.
Current trading and outlook support our confidence in meeting
previously set expectations
The financial performance of the business, for the first half of
the current financial year was in-line with expectations. Trading
remains satisfactory so far in the second part of the year, such
that the Board's expectation continues to be for the business to
break even at an Adjusted EBITDA level for the current financial
year, with revenue in the region of GBP40m, of which over 90% is
already secured. The effects of existing legacy contracts on margin
begin to diminish in FY23 and as a result of improved contractual
and commercial discipline, the Board continues to expect the
business to generate positive Adjusted EBITDA in FY24.
Post period-end events
On 20(th) April 2023, the Company announced a GBP4.275m initial
investment by SCF and Steve Lockard and a placing and retail offer
of GBP2.1m with the company shareholders, together with a committed
GBP18m convertible loan note facility from SCF. This concluded the
Formal Sale Process and the Strategic Review which commenced in
June 2022.
On 31 May 2023, the Company announced a contract award with a
total value in excess of GBP5m for the design and supply of Tekmar
Group's flagship Generation 10 cable protection system (CPS)
product and associated ancillaries, helping to consolidate the
Group's strong position in the growing offshore wind market.
On 21(st) June 2023, the Company announced the appointment of
Leanne Wilkinson as Chief Financial Officer (CFO). Leanne had held
the post of Interim CFO since 1(st) December 2022 and has been with
the Group since June 2020.
Alasdair MacDonald
CEO
21 June 2023
Sources:
(1) 4C Offshore, Offshore Wind Farms Project Opportunity
Pipeline Database, Version Q1 2023
Financial review
A summary of the Group's financial performance is as
follows:
6M ending 6M ending 12M ending
Mar-23 Mar-22 Sep-22
Unaudited Unaudited Audited
GBPm GBPm GBPm
-------------------- ----------- ----------- -----------
Revenue 17.7 13.0 30.2
Adjusted EBITDA(1) (0.6) (1.8) (2.1)
LBT (1.8) (3.2) (5.2)
Adjusted EPS(2) (2.87p) (4.63p) (9.0p)
Gross cash 3.7 10.4 8.5
Net cash(3) (3.3) 4.7 1.5
-------------------- ----------- ----------- -----------
(1) Adjusted EBITDA is a key metric used by the directors.
Earnings before interest tax depreciation and amortisation are
adjusted certain non-cash and exceptional items.
(2) Adjusted EPS is a key metric used by the Directors and
measures earnings after adjusting for non-recurring items. Earnings
for EPS calculation are adjusted for amortisation on acquired
intangibles (GBP104k HY23, GBP376k HY22).
(3) Net cash reflects total cash in bank less cash borrowings
(trade loan facility and CBILS). The GBP10.4m cash balance at Mar
22 included an overpayment from a customer of GBP5.2m, resulting in
an inflated cash position.
On a statutory basis Group loss before tax was GBP1.8m (HY22:
GBP3.2m loss).
Overview
The results for the 6 months to 31 March 2023 are in-line with
the Board's expectations as the Group has begun to see the
anticipated recovery from the challenging trading period of the
previous two financial years, along with the continued benefits of
cost saving initiatives. The Group reported revenue for the 6-month
period to March 2023 of GBP17.7m, which is an increase of 36% when
compared to the 6-months to 31 March 2022. Costs have continued to
be monitored closely and the improvements in commercial management
and project execution which were embedded in FY22 have resulted in
a continued gross profit margin per cent improvement from 22% for
the 6-months to 31 March 2022 to 28% for the 6-months to 31 March
2023. An adjusted EBITDA loss of GBP0.6m is reported for the
6-months to 31 March 2023, which includes a GBP0.8m FX loss due to
unfavourable forex movements. Adjusting for this non-cash item, the
group delivered positive Adjusted EBITDA of GBP0.2m for the period.
In comparison, the period to the 6-months to 31 March 2022 reported
an adjusted EBITDA loss of GBP1.8m and an adjusted EBITDA loss of
GBP2.0m when adjusted for a GBP149k FX gain. The Adjusted EBITDA
improvement, when adjusted for the non-cash FX gains and losses,
was a positive variance of GBP2.2m when compared to the comparator
period. This was driven by the GBP4.7m higher revenue at an
improved gross profit margin.
As announced on 20(th) April 2023, the Group successfully raised
GBP6.4m (GBP5.2m net of expenses) through an initial strategic
investment by SCF, alongside a placing and retail offer with
existing shareholders. The proceeds of the investment and placing
have been used to strengthen the balance sheet and will help
support the delivery of the strategic plan as the business embarks
on its transition to sustained profitable growth.
Revenue
Revenue by Division Revenue by market
GBPm 6M 6M 12M GBPm 6M 6M 12M
Mar23 Mar22 Sep22 Mar23 Mar22 Sep22
Offshore Offshore
Energy 10.7 7.8 17.4 Wind 7.8 7.2 14.7
Marine Civils 7.0 5.2 12.8 Other Offshore 9.9 5.8 15.5
------- -------
Total 17.7 13.0 30.2 Total 17.7 13.0 30.2
---------------- ------- ------- ------- --------------- ------- ------- -------
Offshore Energy, incorporating Tekmar Energy, Subsea Innovation,
AgileTek and Ryder Geotechnical, all of which operate largely as a
single unit, has started to see growth due to volume with revenue
in the period increasing to GBP10.7m (HY23) from GBP7.8m
(HY22).
The Marine Civils division has seen an increase in revenue of
GBP1.8m, up from GBP5.2m for the comparative 6-month period to
GBP7.0m for the 6-months to 31 March 2023. This growth is
reflective of the size and volume of contracts the Group is winning
in this important market, particularly in the Middle East
region.
Gross profit
Gross profit by Division Gross Profit by market
GBPm 6M 6M 12M GBPm 6M 6M 12M
Mar23 Mar22 Sep22 Mar23 Mar22 Sep22
------------- ------- ------- -------- --------------- ------- ------- -------
Offshore Offshore
Energy 2.5 1.9 4.4 Wind 2.5 1.5 4.2
Marine
Civils 2.4 1.0 2.6 Other Offshore 3.2 2.2 4.4
Unallocated Unallocated
costs - - - costs (0.8) (0.8) (1.6)
------------- ------- ------- -------- --------------- ------- ------- -------
Total 4.9 2.9 7.0 Total 4.9 2.9 7.0
------------- ------- ------- -------- --------------- ------- ------- -------
Gross profit margin for the group increased from 22% (HY22) to
28% (HY23). This is due primarily to improvements in the Marine
Civils division increasing margins from 19% (HY22) to 34% (HY23).
This was achieved by the Marine Civils team securing new contracts
at higher margins, coupled with strong commercial and contract
management resulting in good traction on variation orders where
project scope change has been encountered.
Within Offshore Energy, gross profit margin remained stable at
24%, although gross profit increased as a direct result of
increased volume in this division. Gross profit improvement plans
continue to be in place to address the required increase in margin
in this division. However, due to the duration of the contracts
within this division, it will take some time to see the
improvements in full until some of the current backlog is completed
in the coming months. Due to quality of the recent order intake and
the business improvements in place, the Board consider the planned
gross profit margin improvement is tracking in line with
expectations.
Operating expenses
Operating expenses for the 6-month period to 31 March 2023 were
GBP6.6m (HY22: GBP6.0m). The negative variance relates to adverse
forex movements from a gain of GBP149k in HY22 to a cost of GBP784k
in HY23. Adjusting for the forex impacts, there has been an
underlying reduction in operating expenses of GBP0.3m between HY22
and HY23, achieved by careful management of the group cost base
whilst transitioning the business back to profitability.
Adjusted EBITDA
Adjusted EBITDA is a primary measure used across the business to
provide a consistent measure of trading performance. The adjustment
to EBITDA removes certain non-cash and exceptional items to provide
a key metric to the users of the financial statements that is
reflective of the performance of the business resulting from
movements in revenue, gross margin and the cash costs of the
business. The Board reviews all exceptional items to ensure
resulting Adjusted EBITDA achieves this. For the 6-month period
ended 31 March 2023 and the comparable 6-month period to 31 March
2022, the adjustment includes depreciation and amortisation
only.
Improvements in EBITDA reflect a growth in revenue and gross
margin in the period, along with cost savings in operating
expenses, offset in part by unfavourable foreign exchange
movements.
Adjusted EBITDA by
division GBPm
GBPm 6M 6M 12M
Mar23 Mar22 Sep22
---------- ------- ------- -------
Offshore
Energy (1.1) (1.4) (1.8)
Marine
Civils 1.1 0.2 1.0
Group
costs (0.6) (0.6) (1.3)
----------- ------- ------- -------
Total (0.6) (1.8) (2.1)
----------- ------- ------- -------
Profit
The result after tax is a loss of GBP1.8m (HY22: Loss GBP3.2m,
FY22: Loss GBP5.1m). The improvement versus the comparator is due
mainly to an increase in revenue and gross margin as set out
above.
Balance Sheet
Balance Sheet
GBPm Mar23 Mar22 Sep22
Fixed Assets 6.5 5.4 5.9
Other non-current
assets 24.6 24.9 24.6
Inventory 5.6 3.1 4.6
Trade & other
receivables 18.8 15.8 13.4
Cash 3.7 10.4 8.5
Current Liabilities 20.0 15.0 16.9
Other non-current
liabilities 1.9 3.8 0.8
Equity 37.2 40.9 39.2
---------------------- ------ ------ ------
Fixed Assets
Fixed asset investments were largely in line with depreciation
levels. Additions in the period included GBP1.0m relating to the
renewal of the Newton Aycliffe Manufacturing facility lease in
Tekmar Energy, otherwise there were no other major capital spends
in the period.
Other non-current assets
Goodwill of GBP22.2m includes the goodwill arising on the
original management buy-out of Tekmar Energy Limited in 2011 of
GBP19.6m. The balance relates to the acquisitions of Subsea
Innovation and Pipeshield.
Inventory
Inventory on the balance sheet grew by GBP2.5m to GBP5.6m
compared to GBP3.1m at HY22 due to an increase in work-in-progress
in Pipeshield relating to the mobilisation of the large Middle East
contracts awarded in HY23.
Trade and other receivables
Trade and other receivables grew to GBP18.8m (HY22: GBP15.8m)
due largely to an increase in accrued income in-line with the
increase in revenue in the period, as discussed earlier in this
review.
Within the above, trade receivables balance remained broadly
in-line with the prior period (GBP11.3m HY23 v GBP11.6m HY22) which
reflects the improvements in the strengthening of our contracting
process and credit control function as despite a growth in revenue,
a reduction in the balance has been achieved.
Accrued income has increased to GBP6.0m (HY22: GBP1.9m). The
majority of the HY23 balance is expected to be invoiced by Jun-23.
As an offset, deferred income balance is GBP5.5m which reflects the
improved commercial terms and project milestone payments the
business has been able to secure.
Cash
Cash balance at the period end to 31 March 2023 was GBP3.7
million offset by bank borrowings of GBP7m resulting in net debt of
GBP3.3m. HY22 cash balance of GBP10.4m included a GBP5.2m
overpayment by a customer and included GBP3.7m net proceeds from
the Firm Placing and Open Offer which completed in March 2022.
Cash continues to be a major focus of the Group as we monitor
and manage the working capital lifecycle across projects. In
addition to establishing a dedicated credit control function,
further work was undertaken in FY22 which strengthened much of the
business systems surrounding contracting, project management and
accounts receivable which has drove greater transparency and
integration amongst functions. An increasingly common client base
across the group also helps leverage credit control processes
particularly in geographies with typically slower payment
cycles.
Cash used in operations in the first half of GBP3.8m reflects
short term working capital requirements which included the
mobilisation of two large Middle East contracts with local supply
chain. These contracts had sizable upfront milestones which were
billed at the half year and represented around GBP3.8m of the
GBP5.5m deferred income balance, however, as at end of March had
not yet crystallised into cash.
On 20 April 2023 the Group successfully completed a strategic
investment which secured an initial investment from SCF and other
shareholders totalling GBP6.4m (GBP5.2m net of transaction
expenses), with a further committed GBP18m of convertible loan note
facility from SCF. This has significantly strengthened the cash
position of the Group post period end.
Current liabilities
Current liabilities increased to GBP20.0m (HY22: GBP15.0m).
Within the GBP20.0m in HY23 is GBP3m of CBILs loan which was
classified as non-current liabilities in HY22. The trade loan
borrowings have also been increased from GBP2.5m in HY22 to GBP4.0m
in HY23. GBP0.8m of the GBP4m trade loan facility was utilised at
the end of May 23, with the reduction due to timing of project
working capital requirements. The trade loan remains a flexible
facility available for ongoing working capital particularly as the
business grows.
Other non-current liabilities
Other non-current liabilities are GBP1.9m (HY22: GBP3.8m). In
HY22 the balance included GBP3m CBILs loan which is now included in
current liabilities as the renewal, currently being progressed with
the relationship bank, Barclays, is technically due in October
2023. Other amounts relate to lease liabilities in relation to
IFRS16, deferred grant and deferred tax liability.
Leanne Wilkinson
CFO
21 June 2023
Consolidated statement of comprehensive income
for the 6M period ended 31 March 2023
6M 6M 12M ended
ended ended 30 Sep
Note 31 Mar 31 Mar 2022
2023 2022 Audited
Unaudited Unaudited
------- ----------- ----------- ----------
GBP000 GBP000 GBP000
Revenue 3 17,715 13,033 30,191
Cost of sales (12,820) (10,144) (23,153)
----------- ----------- ----------
Gross profit 4,895 2,889 7,038
Administrative expenses (6,578) (5,956) (11,623)
Other operating income 17 9 24
Group operating (loss) (1,666) (3,058) (4,561)
Analysed as:
Adjusted EBITDA([1]) (587) (1,761) (2,079)
Depreciation (658) (652) (1,370)
Amortisation (421) (645) (1,112)
Group operating (Loss) (1,666) (3,058) (4,561)
----------------------------------------- ------- ----------- -----------
Finance costs (99) (147) (685)
Finance income 2 - 18
----------- ----------- ----------
Net finance costs (97) (147) (667)
(Loss) before taxation (1,763) (3,205) (5,228)
Taxation 11 5 99
----------- ----------- ----------
(Loss) for the period (1,752) (3,200) (5,129)
=========== =========== ==========
Equity-settle share-based payments (5) 196 (97)
Revaluation of property - - 238
Retranslation of overseas subsidiaries (218) 20 326
Total comprehensive income for the
period (1,975) (2,984) (4,662)
Loss attributable to owners of the
parent (1,752) (3,200) (5,129)
Total Comprehensive income attributable
to owners of the parent (1,975) (2,984) (4,662)
(Loss) per share (pence)
Basic 4 (2.87) (6.11) (9.04)
Diluted 4 (2.87) (6.11) (9.04)
=========== =========== ==========
All results derive from continuing operations.
1: Adjusted EBITDA, which is defined as profit before net
finance costs, tax, depreciation, amortisation, share based
payments charge, and exceptional items is a non-GAAP metric used by
management and is not an IFRS disclosure.
Consolidated balance sheet
as at 31 March 2023
31 Mar 31 Mar 30 Sep
2023 2022 2022
Note Unaudited Unaudited Audited
------- ----------- ----------- ---------
GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment 6,462 5,416 5,883
Goodwill and other intangibles 24,564 24,895 24,564
Total non-current assets 31,026 30,311 30,447
----------- ----------- ---------
Current assets
Inventory 5,568 3,121 4,623
Trade and other receivables 5 18,836 15,837 13,375
Cash and cash equivalents 3,696 10,366 8,496
----------- ----------- ---------
Total current assets 28,100 29,324 26,494
----------- ----------- ---------
Total assets 59,126 59,635 56,941
=========== =========== =========
Equity and liabilities
Share capital 609 610 609
Share premium 67,653 67,664 67,553
Merger relief reserve 1,738 1,738 1,738
Merger reserve (12,685) (12,685) (12,685)
Foreign currency translation reserve (45) (133) 173
Retained losses (20,035) (16,294) (18,278)
----------- ----------- ---------
Total equity 37,235 40,900 39,210
----------- ----------- ---------
Non-current liabilities
Other interest-bearing loans and borrowings 6 957 3,172 194
Trade and other payables 329 333 331
Deferred tax liability 579 263 313
----------- ----------- ---------
Total non-current liabilities 1,865 3,768 3,651
----------- ----------- ---------
Current liabilities
Other interest-bearing loans and borrowings 6 7,291 2,624 7,198
Trade and other payables 12,707 12,075 9,669
Corporation tax payable 28 268 26
----------- ----------- ---------
Total current liabilities 20,026 14,967 16,893
----------- ----------- ---------
Total liabilities 21,891 18,735 17,731
----------- ----------- ---------
Total equity and liabilities 59,126 59,635 56,941
=========== =========== =========
Consolidated statement of changes in equity
for the 6M period ended 31 March 2023
Foreign Total equity
Merger currency attributable
Share relief Merger translation Retained to owners of Total
capital Share premium reserve reserve reserve earnings the parent equity
---------- ------------- -------- ------------- ------------ ------------- ------------ -------
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
October 2021 516 64,097 1,738 (12,685) (153) (13,290) 40,223 40,223
(Loss) for the
Period - - - - - (3,200) (3,200) (3,200)
Share based
payments - - - - - 196 196 196
Exchange
difference on
translation
of overseas
subsidiary - - - - 20 - 20 20
---------- ------------- -------- ------------- ------------ ------------- ------------ -------
Total
comprehensive
income for
the year - - - - 20 (2,163) (2,163) (2,163)
Issue of
shares 94 3,567 - - - 3,661 3,661
Total
transactions
with owners,
recognised
directly in
equity 94 3,567 - - - - 3,661 3,661
Balance at 31
March 2022 610 67,664 1,738 (12,685) (133) (16,294) 40,900 40,900
(Loss) for the
Period - - - - - (1,929) (1,929) (1,929)
Share based
payments - - - - - (293) (293) (293)
Revaluation of
property - - - - - 238 238 238
Exchange
difference on
translation
of overseas
subsidiary - - - - 306 - 306 306
Total
comprehensive
income for
the year - - - - 306 (1,984) (1,678) (1,678)
---------- ------------- -------- ------------- ------------ ------------- ------------ -------
Issue of
shares (1) (11) - - - - (12) (12)
Total
transactions
with owners,
recognised
directly in
equity (1) (11) - - - - (12) (12)
---------- ------------- -------- ------------- ------------ ------------- ------------ -------
Balance at 30
September
2022 609 67,653 1,738 (12,685) 173 (18,278) 39,210 39,210
========== ============= ======== ============= ============ ============= ============ =======
(Loss) for the
Period - - - - - (1,752) (1,752) (1,752)
Share based
payments - - - - - (5) (5) (5)
Exchange
difference on
translation
of overseas
subsidiary - - - - (218) - (218) (218)
---------- ------------- -------- ------------- ------------ ------------- ------------ -------
Total
comprehensive
income for
the year - - - - (218) (1,757) (1,975) (1,975)
---------- ------------- -------- ------------- ------------ ------------- ------------ -------
Issue of
shares - - - - - - -
Total - - - - - - - -
transactions
with owners,
recognised
directly in
equity
---------- ------------- -------- ------------- ------------ ------------- ------------ -------
Balance at 31
March 2023 609 67,653 1,738 (12,685) (45) (20,035) 37,235 37,235
========== ============= ======== ============= ============ ============= ============ =======
Consolidated cash flow statement
for the 6M period ended 31 March 2023
6M ended 6M ended 12M Ended
31 March 31 March 30 Sep
2023 2022 2022
Unaudited Unaudited Audited
----------- ----------- ----------
GBP000 GBP000 GBP000
Cash flows from operating activities
Loss before taxation (1,763) (3,205) (5,228)
Adjustments for:
Depreciation 658 652 1,370
Amortisation of intangible assets 421 645 1,112
Profit on disposal of fixed assets (99) - -
Share based payments charge - 226 (103)
Finance costs 99 147 685
Finance income (2) - (18)
----------- ----------- ----------
(686) (1,535) (2,182)
Changes in working capital:
(Increase) in inventories (945) 844 (658)
Decrease / (increase) in trade and other
receivables (5,476) 2,232 4,561
(Decrease) / increase in trade and other
payables 3,316 2,944 178
Cash (used) / generated from operations (3,791) 4,485 1,899
Tax recovered 11 - -
----------- ----------- ----------
Net cash (outflow) / inflow from operating
activities (3,780) 4,485 1,899
----------- ----------- ----------
Cash flows from investing activities
Purchase of property, plant and equipment (331) (395) (1,274)
Purchase of intangible assets (294) (233) (369)
Proceeds from sale of property, plant 99 - -
and equipment
Interest received 2 - 18
----------- ----------- ----------
Net cash (outflow) from investing activities (524) (628) (1,625)
----------- ----------- ----------
Cash flows from financing activities
Proceeds from capital share issues - 3,661 3,649
Lease Obligation borrowings - (212) 656
Repayment of borrowings under Lease obligations (185) (440) (537)
Facility drawdown - - 991
Interest paid (93) (2) (345)
----------- ----------- ----------
Net cash inflow / (outflow) from financing
activities (278) 3,007 4,414
----------- ----------- ----------
Net increase /(decrease) in cash and
cash equivalents (4,582) 6,864 4,688
Cash and cash equivalents at beginning
of year 8,496 3,482 3,482
Effect of foreign exchange rate changes (218) 20 326
Cash and cash equivalents at end of
year 3,696 10,366 8,496
----------- ----------- ----------
Notes to the Group financial statements
for the 6 month period ended 31 March 2023
1. GENERAL INFORMATION
Tekmar Group plc (the "Company") is a public limited company
incorporated and domiciled in England and Wales. The registered
office of the Company is Innovation House, Centurion Way,
Darlington, DL3 0UP. The registered company number is 11383143.
The principal activity of the Company and its subsidiaries
(together the "Group") is that of design, manufacture and supply of
subsea stability and protection technology, including associated
subsea engineering services, operating across the global offshore
energy markets, predominantly Offshore Wind.
Forward looking statements
Certain statements in this Annual report are forward looking.
The terms "expect", "anticipate", "should be", "will be" and
similar expressions identify forward-looking statements. Although
the Board of Directors believes that the expectations reflected in
these forward-looking statements are reasonable, such statements
are subject to a number of risks and uncertainties and events could
differ materially from those expressed or implied by these
forward-looking statements.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The Group's principal accounting policies have been applied
consistently to all of the years presented, with the exception of
the new standards applied for the first time as set out in
paragraph (c) below where applicable.
(a) Basis of preparation
The unaudited consolidated interim financial information has
been prepared under the historical cost convention and in
accordance with the recognition and measurement requirements of
UK-adopted international accounting standards ("IFRS"). The
condensed consolidated interim financial information does not
constitute financial statements within the meaning of Section 434
of the Companies Act 2006 and does not include all of the
information and disclosures required for full annual financial
statements. It should therefore be read in conjunction with the
Group's Annual Report for the period ended 30 September 2022, which
has been prepared in accordance with IFRSs and is available on the
Group's investor website.
The accounting policies used in the financial information are
consistent with those used in the Group's consolidated financial
statements as at and for the period ended 30 September 2022, as
detailed on pages 86 to 93 of the Group's Annual Report and
Financial Statements for the period ended 30 September 2022, a copy
of which is available on the Group's website,
www.tekmargroup.com.
The comparative financial information contained in the condensed
consolidated financial information in respect of the period ended
30 September 2022 has been extracted from the 2022 Financial
Statements. Those financial statements have been reported on by
Grant Thornton UK LLP and delivered to the Registrar of Companies.
The report was unqualified and did not contain a statement under
Section 498(2) or 498(3) of the Companies Act 2006. The report did
include a reference to a material uncertainty in relation to going
concern which the auditor drew attention to by way of emphasis
without qualifying their report.
Selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the
changes in financial position and performance of the Group since
the last annual consolidated financial statements as at the period
ended 30 September 2022.
The preparation of the interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. Estimates
and judgements are continually evaluated and are based on
historical experience and other factors, such as expectations of
future events and are believed to be reasonable under the
circumstances. Actual results may differ from these estimates. In
preparing these interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those applied to the audited consolidated financial
statements for the period ended 30 September 2022.
There have been no new accounting standards or changes to
existing accounting standards applied for the first time from 1
October 2022 which have a material effect on these interim results.
The Group has chosen not to early adopt any new standards or
amendments to existing standards or interpretations.
(b) Going concern
The Group meets its day-to-day working capital requirements
through its available banking facilities which includes a CBILs
loan of GBP3.0m currently available to 31 October 2023 and a trade
loan facility of up to GBP4.0m that can be drawn against supplier
payments, currently available to 31 July 2023. The latter is
provided with support from UKEF due to the nature of the business
activities both in renewable energies and in driving growth through
export lead opportunities. The Group held GBP3.7m of cash at 31
March 2023 including full draw down of the GBP3.0m CBILS loan and a
further GBP4.0m of the trade loan facility. There are no financial
covenants that the Group must adhere to in either of the bank
facilities.
The Directors have prepared cash flow forecasts to 30 September
2024. The base case forecasts include assumptions for annual
revenue growth supported by current order book, known tender
pipeline, and by publicly available market predictions for the
sector. The forecasts also assume a retention of the costs base of
the business with increases of 5% on salaries and a cautious
recovery of gross margin on contracts. These forecasts show that
the Group is expected to have a sufficient level of financial
resources available to continue to operate on the assumption that
the two facilities described are renewed. Within the base case
model management have not modelled anything in relation to the
matter set out in note 8 Contingent Liabilities, as management have
assessed there to be no present obligation.
The Directors have sensitised their base case forecasts for a
severe but plausible downside impact. This sensitivity includes
reducing revenue by 15% for the period to 30 September 2024,
including the loss or delay of a certain level of contracts in the
pipeline that form the base case forecast, and a 10% increase in
costs across the Group as a whole for the same period. The base
case and sensitised forecast also includes discretionary spend on
capital outlay. In addition, the Directors note there is further
discretionary spend within their control which could be cut, if
necessary, although this has not been modelled in the sensitised
case given the headroom already available. These sensitivities have
been modelled to give the Directors comfort in adopting the going
concern basis of preparation for these financial statements.
Further to this, a 'reverse stress test' was performed to determine
at what point there would be a break in the model, the reverse
stress test included reducing revenue by 20% and increasing
overheads by 15% against the base case. The inputs applied to the
reverse stress are not considered plausible.
Facilities - Within both the base case and severe but plausible
case, management have assumed the renewal of both the CBILS loan
and trade loan facility in October 2023 and July 2023 respectively.
In the unlikely case that the facilities are not renewed, the Group
would aim to take a number of co-ordinated actions designed to
avoid the cash deficit that would arise.
Following the recent strategic investment from SCF a further
avenue of funding could be available to the group in the form of
the Convertible Loan Notes (CLN) facility from the group's largest
shareholder, which is in place. SCF has agreed that the company may
request to draw down against the CLN facility, subject to the
relevant approvals required by the terms of the CLN (including
investment committee approval), to support the working capital of
the Group if the need arises, due to banking facilities not being
renewed. The availability of this funding is contingent on the
approval requirements of the CLN terms and is therefore not
certain.
The Directors are confident, based upon the communications with
the team at Barclays, the historical strong relationship and recent
bank facility renewal in November 2022, that these facilities will
be renewed and will be available for the foreseeable future.
However, as the renewal of the two facilities in October 2023 and
July 2023 are yet to be formally agreed and the Group's forecasts
rely on their renewal, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the
Group's and parent company's ability to continue as a going
concern.
The Directors are satisfied that, taking account of reasonably
foreseeable changes in trading performance and on the basis that
the bank facilities are renewed, these forecasts and projections
show that the Group is expected to have a sufficient level of
financial resources available through current facilities to
continue in operational existence and meet its liabilities as they
fall due for at least the next 12 months from the date of approval
of the financial statements and for this reason they continue to
adopt the going concern basis in preparing the financial
statements.
(c) Basis of consolidation
Subsidiaries are all entities over which the Group has control.
The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group and are deconsolidated
from the date control ceases. Inter-company transactions, balances
and unrealised gains and losses on transactions between group
companies are eliminated.
(d) EBITDA and Adjusted EBITDA
Earnings before Interest, Taxation, Depreciation and
Amortisation ("EBITDA") and Adjusted EBITDA are non-GAAP measures
used by management to assess the operating performance of the
Group. EBITDA is defined as profit before net finance costs, tax,
depreciation and amortisation. Exceptional items and share based
payment charges are excluded from EBITDA to calculate Adjusted
EBITDA.
The Directors primarily use the Adjusted EBITDA measure when
making decisions about the Group's activities. As these are
non-GAAP measures, EBITDA and Adjusted EBITDA measures used by
other entities may not be calculated in the same way and hence are
not directly comparable.
3. SEGMENTAL REPORTING
Management has determined the operating segments based upon the
information provided to the executive Directors which is considered
the chief operation decision maker. The Group is managed and
reports internally by business division and markets.
Major customers
In the period ended 31 March 2023 there was one major customer
within the Marine Civils segment, and one major customer in the
Offshore Energy segment that individually accounted for at least
10% of total revenues (2022 6M: one customer, 2022 one customer).
The revenues relating to these in the period to 31 March 2023 were
GBP7,253,000 (2022 6M: GBP2,236,000, 2022; GBP7,243,000). Included
within this is revenue from multiple projects with different
entities within each customer.
Analysis of revenue by region 6M ending 6M ending 12M ending
31 March 31 Mar 2022 30 Sep 2022
2023 Unaudited Audited
Unaudited
----------- ------------- -------------
GBP000 GBP000 GBP000
UK & Ireland 5,054 834 8,028
Germany 721 - 1,230
Netherlands 57 - -
Norway 377 - -
Turkey - - 499
Greece - - 409
Denmark - - 757
Other Europe 386 7,412 2,721
China 1,491 1,657 3,847
USA & Canada 1,221 235 674
Japan 1,034 - 561
Philippines 134 - 534
Qatar 4,735 - 8,716
KSA 1,665 - 509
Other Middle East 401 270 468
Trinidad & Tobago 274 - -
Rest of the World 165 2,625 1,238
----------- ------------- -------------
17,715 13,033 30,191
=========== ============= =============
Analysis of revenue by market Mar-23 Mar-22 Sep-22
Unaudited Unaudited Audited
----------- ----------- ---------
GBP000 GBP000 GBP000
Offshore Wind 7,812 7,221 14,705
Other offshore 9,903 5,812 15,486
----------- ----------- ---------
17,715 13,033 30,191
=========== =========== =========
Analysis of revenue by product category Mar-23 Mar-22 Sep-22
Unaudited Unaudited Audited
----------- ----------- ---------
GBP000 GBP000 GBP000
Offshore Energy protection systems &
equipment 9,770 6,996 15,497
Marine Civils 7,064 5,166 12,734
Engineering consultancy services 881 872 1,960
----------- ----------- ---------
17,715 13,033 30,191
=========== =========== =========
Profit and cash are measured by division and the Board reviews
this on the following basis.
Offshore Marine Group/ Total
Energy Civils Eliminations Mar-23
Mar-23 Mar-23
Unaudited Unaudited Unaudited Unaudited
----------- ----------- -------------- -----------
GBP000 GBP000 GBP000 GBP000
Revenue 10,651 7,064 - 17,715
Gross profit 2,536 2,359 - 4,895
% Gross profit 24% 33% - 28%
----------- ----------- -------------- -----------
Operating (loss)/ profit (1,949) 982 (699) (1,666)
Analysed as:
Adjusted EBITDA (1,123) 1,126 (590) (587)
Depreciation (509) (144) (5) (658)
Amortisation (317) - (104) (421)
Operating (loss)/ profit (1,949) 982 (699) (1,666)
Interest & similar expenses 89 195 (381) (97)
Tax 1 - 10 11
----------- ----------- -------------- -----------
(Loss) / profit after tax (1,859) 1,177 (1,070) (1,752)
----------- ----------- -------------- -----------
Offshore Marine Group/ Total
Energy Civils Eliminations Mar-23
Mar-23 Mar-23
Unaudited Unaudited Unaudited Unaudited
----------- ----------- -------------- -----------
GBP000 GBP000 GBP000 GBP000
Other information
Reportable segment assets 18,493 13,198 27,435 59,126
Reportable segment liabilities (6,923) (6,885) (8,083) (21,891)
Offshore Marine Group/ Total
Energy Civils Eliminations Mar-22
Mar-22 Mar-22
Unaudited Unaudited Unaudited Unaudited
----------- ----------- -------------- -----------
GBP000 GBP000 GBP000 GBP000
Revenue 7,867 5,166 - 13,033
Gross profit 1,904 985 - 2,889
% Gross profit 24% 19% - 22%
----------- ----------- -------------- -----------
Operating (loss)/ profit (2,233) 99 (924) (3,058)
Analysed as:
Adjusted EBITDA (1,434) 221 (548) (1,761)
Depreciation (530) (122) - (652)
Amortisation (269) - (376) (645)
Operating (loss)/ profit (2,233) 99 (924) (3,058)
Interest & similar expenses (88) - (59) (147)
Tax 5 - - 5
----------- ----------- -------------- -----------
(Loss) / profit after tax (2,316) 99 (983) (3,200)
----------- ----------- -------------- -----------
Offshore Marine Group/ Total
Energy Civils Eliminations Mar-22
Mar-22 Mar-22
Unaudited Unaudited Unaudited Unaudited
----------- ----------- -------------- -----------
GBP000 GBP000 GBP000 GBP000
Other information
Reportable segment assets 24,684 6,979 27,972 59,635
Reportable segment liabilities (9,452) (2,885) (6,398) (18,735)
Offshore Marine Group/ Total
Energy Civils Eliminations Sep-22
Sep-22 Sep-22
Audited Audited Audited Audited
--------- --------- -------------- ---------
GBP000 GBP000 GBP000 GBP000
Revenue 17,455 12,736 - 30,191
Gross profit 4,442 2,596 - 7,038
% Gross profit 25% 20% - 23%
--------- --------- -------------- ---------
Operating profit/(loss) (3,405) 789 (1,945) (4,561)
Analysed as:
Adjusted EBITDA (1,800) 1,060 (1,339) (2,079)
Depreciation (1,099) (271) - (1,370)
Amortisation (506) - (606) (1,112)
Operating profit/(loss) (3,405) 789 (1,945) (4,561)
Interest & similar expenses (318) (185) (164) (667)
Tax (237) 175 161 99
Profit / (loss) after tax (3,960) 779 (1,948) (5,129)
Offshore Marine Group/ Total
Energy Civils Eliminations Sep-22
Sep-22 Sep-22
Audited Audited Audited Audited
--------- --------- -------------- ---------
GBP000 GBP000 GBP000 GBP000
Other information
Reportable segment assets 19,029 9,541 28,175 57,766
Reportable segment liabilities (5,530) (4,483) (7,631) (17,678)
4. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the earnings
attributable to equity shareholders by the weighted average number
of ordinary shares in issue. Diluted earnings per share are
calculated by including the impact of all conditional share
awards.
The calculation of basic and diluted profit per share is based
on the following data:
6M ending 6M ending 12M ending
31 March 31 March 30 Sep 2022
2023 2022 Audited
Unaudited Unaudited
----------- ----------- -------------
Earnings (GBP'000)
Earnings for the purposes of basic and
diluted earnings per
share being profit/(loss) for the year
attributable to equity shareholders (1,752) (3,200) (5,219)
----------- ----------- -------------
Number of shares
Weighted average number of shares for
the purposes of basic earnings per share 60,960,484 52,404,863 56,719,539
Weighted average dilutive effect of
conditional share awards 562,832 678,432 968,399
----------- ----------- -------------
Weighted average number of shares for
the purposes of diluted earnings per
share 61,523,316 53,083,295 57,687,938
----------- ----------- -------------
Profit per ordinary share (pence)
Basic profit per ordinary share (2.87) (6.11) (9.04)
Diluted profit per ordinary share (2.87) (6.11) (9.04)
----------- ----------- -------------
Adjusted earnings per ordinary share
(pence)* (2.7) (4.63) (7.44)
The calculation of adjusted earnings per share is based on
the following data:
Mar-23 Mar-22 Sep-22
Unaudited Unaudited Audited
----------- ------------ ------------
GBP000 GBP000 GBP000
(Loss) / Profit for the period attributable
to equity shareholders (1,752) (3,200) (5,129)
Add back:
Amortisation on acquired intangible assets 104 376 605
Tax effect on above (1) (1) (12)
Adjusted earnings (1,649) (2,825) (4,536)
*Adjusted earnings per share is calculated as profit for the
period adjusted for amortisation as a result of business
combinations, exceptional items and the tax effect of these at the
effective rate of corporation tax, divided by the closing number of
shares in issue at the Balance Sheet date. This is the measure most
commonly used by analysts in evaluating the business' performance
and therefore the Directors have concluded this is a meaningful
adjusted EPS measure to present.
5. TRADE AND OTHER RECEIVABLES
Mar-23 Mar-22 Sep-22
Unaudited Unaudited Audited
----------- ----------- ---------
GBP000 GBP000 GBP000
Amounts falling due within one year:
Trade receivables not past due 5,076 3,620 2,698
Trade receivables past due (1-30 days) 2,271 1,770 1,948
Trade receivables past due (over 30
days) 3,060 6,253 3,279
Trade receivables not yet due (retentions) 877 - 1,620
Trade receivables net 11,284 11,643 9,545
Contract assets 6,035 1,900 3,194
Other receivables 713 1,525 203
Prepayments and accrued income 537 633 433
Deferred Tax Asset 267 139 -
Derivative financial assets - (3) -
18,836 15,837 13,375
=========== =========== =========
Trade and other receivables are initially recorded at
transaction price and thereafter are measured at amortised cost
using the effective interest rate. A loss allowance for expected
credit losses on trade and other receivables and contract assets is
measured at an amount equal to the lifetime expected credit losses.
Lifetime expected credit losses are the expected credit losses that
will result from all possible default events over the expected life
of a financial instrument. This assessment is performed on a
collective basis considering forward-looking information. The Group
considers a financial asset to be in default when the receivable is
unlikely to pay its credit obligations to the Group in full without
recourse by the Group to actions such as realising security (if any
is held).
Trade and other receivables are all current and any fair value
difference is not material.
The derivative financial asset relates to forward foreign
currency contracts.
There have been no provisions for impairment against the trade
and other receivables noted above. The Group has calculated the
expected credit losses to be immaterial.
6. BORROWINGS
Mar-23 Mar-22 Sep-22
Unaudited Unaudited Audited
----------- ----------- ---------
GBP000 GBP000 GBP000
Current
Trade Loan Facility 4,000 2,549 3,990
Lease liability 291 75 208
CBILs Bank Loan 3,000 - 3,000
7,291 2,624 7,198
=========== =========== =========
Non-current
CBILS Bank Loan - 3,088 -
Lease liability 957 84 194
957 3,172 194
----------- ----------- ---------
7. CONTINGENT LIABILITIES
Contingent liabilities are disclosed in the financial statements
when a possible obligation exists, the existence will be confirmed
by uncertain future events that are not wholly within the control
of the entity. Contingent liabilities also include obligations that
are not recognised because their amount cannot be measured reliably
or because settlement is not probable.
As noted by the Group in prior public announcements, there is an
emerging industry-wide issue regarding abrasion of legacy cable
protection systems installed at off-shore windfarms. The precise
cause of the issues are not clear and could be as a result of a
number of factors, such as the absence of a second layer of rock to
stabilise the cables. The decision not to apply this second layer
of rock, which was standard industry practice, was taken by the
windfarm developers independently of Tekmar. Tekmar is committed to
working with relevant installers and operators, including directly
with customers who have highlighted this issue, to investigate
further the root cause and assist with identifying potential
remedial solutions. This is being done without prejudice and on the
basis that Tekmar has consistently denied any responsibility for
these issues. However, given these extensive uncertainties and
level of variabilities at this early stage of investigations no
conclusions can yet be made.
Tekmar have been presented with defect notifications for 8
legacy projects on which it has supplied cable protection systems
("CPS"). These defect notifications have only been received on
projects where there was an absence of the second layer of rock
traditionally used to stabilise the cables.
At this stage management do not consider that there is a present
obligation arising under IAS37 as insufficient evidence is
available to identify the overall root cause of the damage to any
of the CPS. Independent technical experts have been engaged to
determine the root cause of the damage to the CPS, Tekmar have
reviewed these assessments and it is still unclear the cause of the
faults and therefore no present obligation exists.
Given the range of possible outcomes, management considers that
a possible obligation exists which will only be confirmed by
further technical investigation to identify the root cause of
alleged CPS failures. As such management has disclosed a contingent
liability in the financial statements.
Tekmar Group plc has taken exemption under IAS37, Paragraph 92
to not disclose information on the range of financial outcomes,
uncertainties in relation to timing and any potential reimbursement
as this could prejudice seriously the position of the entity in a
dispute with other parties on the subject matter as a result of the
early stage of discussions.
8. POST BALANCE SHEET EVENTS
On 20th April 2023, the Group successfully raised GBP6.4m
(GBP5.2m net of expenses) through an initial strategic investment
by SCF, alongside a placing and retail offer with existing
shareholders. The proceeds of the investment and placing have been
used to strengthen the balance sheet and will help support the
delivery of the strategic plan as the business embarks on its
transition to sustained profitable growth.
Tekmar issued and allotted 22,222,222 Placing Shares, 47,505,458
Subscription Shares and 1,273,164 Retail Shares. The Company has
also issued and allotted 4,075,788 Management Shares to certain
members of the senior management team.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR UROKROUUNUAR
(END) Dow Jones Newswires
June 21, 2023 02:01 ET (06:01 GMT)
Tekmar (LSE:TGP)
Historical Stock Chart
From Mar 2024 to Apr 2024
Tekmar (LSE:TGP)
Historical Stock Chart
From Apr 2023 to Apr 2024
