Tekmar Share Discussion Threads

[jonwig] 28/8/2020 15:17

@ 1tommyt - thanks for your contribution!

[1tommyt] 28/8/2020 14:22

Sorry hi. This is my first time posting on ADVFN but long term viewer so thought I would get stuck into this one. I like this story of Tekmar, very healthy balance sheet, operating in exciting market within offshore renewables, even with James (Ex Founder and CEO) gone looks like a good board. Balance sheet of 65m£ with no real debt or leverage, even with share options a market cap of less that 55£m. M&A target or bargain purchase surely?

[1tommyt] 28/8/2020 14:17

Unless I am missing something this would be a very good thing for shareholders?


Page 30 AR as per share options "Looking forward
We have developed a framework of incentives for
management and staff to continue to drive the desired
behaviour across the Group. The framework comprises
a mix of the existing share option incentives (LTIP) and
cash incentives (bonuses) alongside two short period
share based awards (SIP). These short period awards
will cover the two year gap between IPO options vesting
in 2020 and LTIP awards vesting in 2023. The anticipated
award under each of these schemes represents between
10% and 100% of salary for participants, totalling a
maximum of 1.3m shares over the three years.
The performance criteria for awards under the LTIP will
be as envisaged in the Groups listing criteria, EPS and
TSR growth; specifically a minimum of 100% and 33%
respectively over the three year period. The performance
criteria for the two short period awards mirror these
objectives.
I do trust that this clearly explains our approach to
remuneration and enables you to appreciate how it
underpins the Group’s strategy. If you have any questions
on this report I will be available at the Group’s Annual
General Meeting to discuss them.
Chris Gill
Chair of the Remuneration Committee"

[leedslad001] 28/8/2020 13:45

Thanks for that goodbye.

[geovest] 28/8/2020 13:39

I have sold out most of my holding a few weeks back. Not because I am overly concerned about the company prospects.
The Board voted themselves about 1.5 million share options in total during August. Its supposedly mainly LTIP, which is rubbish as it pays out in 2021, 2022,and 2023. Nothing long term about that. It is also nil cost options. Given that the company only forecasts to earn around £11m after tax over the next 3 years, that is a cost to us as shareholders of between 15 and 20% of net profits depending on the share price at date of exercise.
You can bet that once a new CEO is recruited, a lot more Nil cost options will be awarded to "attract, retain and incentivise".
Nil cost options are gifts, not incentives.
The focus of the Board is therefore more aligned to their pockets than shareholders.

[leedslad001] 28/8/2020 13:20

Looking back it could be L&G selling some more?

[leedslad001] 28/8/2020 13:14

Decided to join the group bought in this am. Must be a large sell order in that's all I can see for the drop. Gla

[thomshrike] 28/8/2020 12:16

After gathering several pieces of info, my view at this point is:
- I don't think that anything changed in terms of competitive moat for the critical Teklink product.
- I believe the explanations given for the departure of the CEO. He is an entrepreneurial guy and was not happy his current daily routine. I don't expect him to sell his stake.
- I don't have any reason to believe that at this moment the business is performing differently from what the market expects.
Given the potential LT growth of the business, both organically and through M&A, and also given recent share price weakness, it looks very attractive to me now.

[jonwig] 28/8/2020 09:53

@ Garbet - I know it can be frustrating sharing knowledge when supporters / holders don't want to be disillusioned.

If you read the exchange, you will realise that was not the problem. The problem was that public forums are subject to a large volume of disinformation from people with an agenda speaking anonymously. It suits such people to pretend to have insider knowledge or position.

We know nothing about 'Soulcold': he could well be genuine. A different view of TGP is provided by 'thomshrike' who is an investment professional. (You may not believe me, of course.)

At present, we have little information about TGP, as the final results were to 31/03. The AGM on 30/09 should provide a statement. It's worth remembering that if the departing CEO was indeed not up to the job, that gives scope for improvement!

[garbetklb] 28/8/2020 09:18

I have held a few TGP shares for a while. Recent price drop aroused my interest - maybe a buying opportunity? But can't find any specific reason - no trading announcements, no holdings RNS etc.
Always interested in comments like Soulcold's - which appear to be from a position of industry knowledge - any updates??? On board, or by PM.
I know it can be frustrating sharing knowledge when supporters / holders don't want to be disillusioned. For any who remember Gable Insurance, I made several criticised posts as I knew, from industry experience, that it was all going horribly wrong.......

[thomshrike] 05/8/2020 14:48

80-100% is/was on a global basis.

Understood. I will try to investigate your concerns with my channel checks.

[soulcold] 05/8/2020 14:45

Thomshrike - 80-100% market in 2019 on European projects perhaps but the OWF is global. As my original post they are now losing share to new entrants competing against the Teklink product.

I am fully aware of what Tekmar supply and their position within the supply chain but I refer back to my initial post ... they are no longer getting things their own way and my feeling is that the board changes may be a result of this.

Yes your assessment of 35% may well be correct but my points above are still valid.

[thomshrike] 05/8/2020 14:04

Tekmar has had historically 80%+ market share on its OW cable protection system (Teklink). Since the IPO in 2018, I have seen numerous brokers and fund managers cross-checking and validating this information. In fact this market share increased during calendar year 2019 to 100%. Earlier this year the company said there was no change on the competitive environment.

Soulcold, there might be some misconception there: Tekmar is not an installer or a contractor (i.e. you might see for instance Boskalis or CFE announcing contracts, but they will install Tekmar products); and the market share is calculated on the very specific Teklink application that the company provides to OW (e.g. Tekmar's market share could be very different in, say, telecom cable protection, which is a quasi-irrelevant product for Tekmar).

On the other hand, given the continued increase of their product portfolio, the Teklink product only represents c. 35% of Tekmar sales.

[soulcold] 05/8/2020 12:01

Jonwig - Totally agree Tekmar make more announcements often recycling old news to keep the PR bandwagon moving. On a quick search other suppliers have agreements in place with Orsted also. There are many other developers & installation contractors who make place these contract awards.
Rambutan2 - A quick google search will tell you but there are at least 4 good sized experienced Subsea / marine suppliers in the UK that operate in this space.

[rambutan2] 05/8/2020 11:40

Soulcold, it would be useful if you could name the new competition.

[jonwig] 05/8/2020 11:39

Soulcold - I agree there are a good number of firms in the cable protection business: I found eight more GB/Eur ones after a brief search. The fact that Tekmar makes more announcements of contracts than others is easily explained by the fact that it's a quoted company where PR is more important.

Some of the others are subsidiaries, or Nor/Swe/NL firms. Companies House isn't all that helpful. What is important, I think, is the close relationship with Orsted: eg. on Hornsea 2 and a West Virginia project recently. If they lost that connection, it would validate your point.

Of course, your main criticism is now in the past, and the new CEO will be key to the future. How long to wait?

[soulcold] 05/8/2020 09:09

Historic trading has been good admittedly however competition for OWF project has been limited. As the market has grown new entrants have emerged and are now a thorn in the their flesh. As my original post these new entrantS offer equal
or better solutions and a more professional approach. This combined with the current dynamics affecting the market may have resulted in the departure of the CEO. It is easy to be successful with no competition however it is more difficult when the going gets tough. This is where experienced CEOs show their worth.

[mwainw1973] 05/8/2020 07:59

Their sales director is even younger and has known him from uni, seen and met them both and know people who have and still do work there, the culture is poor and while age is no guarantee of success the experience part counts for a lot so I agree with you

[jonwig] 05/8/2020 07:45

ADVFN is a bit like the wild west - it's full of people who make unfounded assertions, claims to special insights, etc.
So when you claim first-hand experience, etc. you are following well-trodden paths. And since you're hiding behind a moniker, you already have anonymity.

Let's put it another way, though. The shares trade on an historic diluted PER of 28x, which is not a bad rating for a company with an incompetent CEO! If they attract a person of the right calibre how would you expect them to be re-rated? And, given Richie's shareholding isn't large, how have the prospects for takeover changed, if at all?
You ought to be able to give some reasoned answers to those two points.

[soulcold] 05/8/2020 07:30

Trust me ... Plenty first hand experience. Clearly can’t compromise my position by providing additional evidence.

[jonwig] 05/8/2020 06:34

Soulcold - you joined ADVFN yesterday and this is your first and only comment on the boards. In itself that doesn't render your point worthless, but some evidence and explanation for your assertions might be in order!

(It's also possible, of course, that you're disguising an existing identity.)

[soulcold] 04/8/2020 22:12

My feeling is that he has been found out. His age & general lack of experience in a tough market has resulted in some very unprofessional behaviour that has most probably caught up with him. Other suppliers in the OWF market are conducting themselves more professionally and have better solutions which has resulted in them losing market share.

[imperial3] 04/8/2020 17:02

The market has been unimpressed with these results with a consequent decline in the share price.When we shall see a recovery I do not know.

[thomshrike] 04/8/2020 16:07

A few things:
- be careful with FY growth metrics, because they include the consolidation of Pipeshield for 6 months (c. 3m revenue). On the other hand, expect at least 6-7% growth in FY21 just by consolidating it for the full year.
- amongst the broad range of metrics that the company usually presents, the most positive was Preferred Bidder, which was c. flat yoy, but rebounding strongly from a low 1H20 number and indicating good level of tender activity.
- Seasonality is high in this business and will always be, given timing of deliveries.
- That said, I think that management prudence could indicate some high level of costs in 1Q21, probably due to supply chain issues (with China and then Italy).
- Green energy continues to be on top of every government's agenda. Market outlook should continue to be bright.
- The outlook for O&G is less attractive, but the potential to grab share with their suite of products is high.
- Ally McDonald is a very seasoned professional. He was formerly CEO and COO of Wellstream and spent a lot of time with Technip.

[hpcg] 04/8/2020 09:18

jonwig as you say starting, building, growing and running a business takes different skills and few people can do it all. This is a case where I have little concern, and for Macdonald I imagine there are numerous superior opportunities right now. I can't think of a better time to be starting out on new ventures.

I thought the group outlook statement was fine. 'Confident in achieving targets' is positive language and the order book is in good condition for that growth.