Interim Results-TEKMAR GROUP PLC

Interim Results-TEKMAR GROUP PLC

UNAUDITED INTERIM RESULTS

For the 6-month period ending 31 March 2023

Tekmar Group, 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.

Headlines

The Group's financial performance is improving and is in-line with management expectations for the Period

·      Revenue of £17.7m (HY22: £13.0m) 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 £0.6m (HY22: loss of £1.8m), attributable to non-cash FX movement of £0.8m during the Period. Excluding this FX loss Adjusted EBITDA is £0.2m, reflecting stronger underlying trading performance and enhanced margins.  

·      On a like for like basis, excluding FX gain of £149k in HY22 and £0.8m loss in HY23, there is a £2.2m improvement in underlying trading EBITDA YoY

·      On a statutory basis Group loss before tax was £1.8m (HY22: £3.2m loss)

·      Expect business to break even at an Adjusted EBITDA level for the current financial year, with revenue in the region of £40m, 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

·      £5m 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 £26m 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 £5.2m, 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 £18m available through the committed convertible loan note facility ("CLN")

·      Cash on the balance sheet of £3.7m as at 31 March 2023, with net debt of £3.3m as the £3m CBILs Loan and the £4m 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 £2.8m with net debt of £1m.  The £3m CBILs loan continued to be fully drawn and £0.8m of the £4m trade loan was drawn. 

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