GYG PLC Half Year Trading Update (7635W)

TIDMGYG

RNS Number : 7635W

GYG PLC

21 August 2020

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

21 August 2020

GYG plc

("GYG", the "Company" or the "Group")

Half Year Trading Update

GYG (AIM: GYG), the market leading superyacht painting, supply and maintenance company, provides the following update on trading for the six months to 30 June 2020 ("H1").

Following a positive first half of the year and the activity scheduled for H2 and into 2021, the Board remains confident that the Group is on track to meet market expectations for the full year, which have remained unchanged since before the disruption caused by the COVID-19 pandemic.

Despite the disruption caused by COVID-19 in H1, due to management's continued focus on driving margin improvements and enhancing the quality of earnings, the Group expects to report increased Adjusted EBITDA of EUR1.6m (H1 2019: EUR1.5m). This would equate to a 22% increase in the Adjusted EBITDA margin. The Board is confident that this improvement in margin is sustainable and there is potential for this to be increased further.

The Group expects to report H1 revenues of c.EUR29.1m, (H1 2019: EUR33.1m). During the pandemic, no contracts were cancelled and, as a result, most of the associated revenue originally forecast for H1 was delayed into H2.

During the period, the Group also improved the size and visibility of the Order Book and agreed new bank facilities with its lenders to further strengthen the balance sheet and provide resilience against COVID-19 uncertainties.

As previously announced, the Group signed a major New Build contract in H1 for an 80+ metre yacht, scheduled to start in Q4 2020 and is in advanced negotiations for further New Build projects for 2021 and 2022. Four of the six New Build contracts signed in 2019 have either started or are due to start in Q3 which will increase New Build revenues through H2.

As outlined in the Final Results on 22 July 2020, the Group experienced strong sales momentum in H1 with the signing of several major Refit contracts for immediate start, increasing Refit revenues during the traditionally quieter summer months. This included two contracts, with a combined value of over EUR6m, with MB92 Group in Barcelona, Spain and La Ciotat, France, and a 70+ metre yacht in Palma, and work on these vessels has already begun. In addition, a further contract has recently been signed with MB92 Group for a 100+ metre yacht. Work on this project will commence in the latter part of Q3.

The Group's Supply division, Pinmar Yacht Supply, has had a solid first half, winning several new contracts as a result of the targeting of larger yachts for global supply.

As a result of the above and as announced on 22 July 2020, the Group's Order Book at 30 June 2020 was:

 
 Order Book      Total Order   Current Year   Current Year   Forward Order 
  at:                Book                          +1             Book 
 30 June 2018     EUR29.9m       EUR11.2m         EUR13.1m      EUR5.6m 
                ------------  -------------  -------------  -------------- 
 30 June 2019     EUR38.6m       EUR15.3m         EUR18.2m      EUR5.1m 
                ------------  -------------  -------------  -------------- 
 30 June 2020     EUR42.7m       EUR16.4m         EUR20.7m      EUR5.6m 
                ------------  -------------  -------------  -------------- 
 

GYG will report Interim Results for the six months to 30 June 2020 on 24 September 2020 and will update the Order Book again then.

Remy Millott, Chief Executive of GYG plc, commented:

"Despite the challenges that the COVID-19 pandemic has presented, the Group has had a good first half with no projects cancelled and a significant increase in Refit work over the summer months, which tends to be a quieter time due to normal Mediterranean cruising patterns. Most importantly, despite lower revenues in H1 compared to 2019 and the disruptions encountered in March and April, we have taken the opportunity to continue further restructuring of the Group, which has resulted in significantly improved margins. It demonstrates that the team's focus on improving margins is starting to flow through and will continue in H2. This has enabled us to be confident that we are on track to achieve what we had expected to at the start of the year, despite the disruption caused by the COVID-19 pandemic."

"The second half has started well with the positive momentum from H1 being maintained through the summer and into Q3 and Q4. The Order Book remains strong and the team are working on a number of potential leads that will further strengthen this through the second half while maintaining our keen focus on gross margin improvement. The Board remains confident that the Group is on track to meet market expectations for the full year and continues to look to the future with confidence."

For further information:

 
 GYG plc                               via FTI Consulting 
  Remy Millott, Chief Executive         Tel: [phone] 
  Officer 
  Kevin McNair, Chief Financial 
  Officer 
 Zeus Capital Limited (NOMAD &         Tel: [phone] 
  Broker) 
  John Goold, Dominic King 
  Dan Bate, Nick Cowles, Ben Burnett 
 FTI Consulting (Financial PR)         Tel: [phone] 
  Alex Beagley 
  Fiona Walker 
  Rafaella de Freitas 
 

Notes to Editors:

GYG is the market leading superyacht painting, supply and maintenance company, offering services globally through operations in the Mediterranean, Northern Europe and the United States. The Company's brands include Pinmar, Pinmar Yacht Supply and Technocraft. GYG's operations can be divided into three key sales channels:

-- Refit: repainting and finishing of superyachts, normally as part of a refit programme. Revenues also include scaffolding and containment work;

   --    New Build: fairing and painting of new vessels as part of the build process; and 

-- Supply: selling and delivery of maintenance materials, consumables, spare parts and equipment primarily to trade customers.

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August 21, 2020 02:00 ET (06:00 GMT)