We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Tekmar Group Plc | LSE:TGP | London | Ordinary Share | GB00BDFGGK53 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 9.25 | 9.00 | 9.50 | 9.25 | 9.25 | 9.25 | 110,247 | 08:00:06 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Water,sewer,pipeline Constr | 39.91M | -10.12M | -0.0744 | -1.24 | 12.59M |
From Apr 2019 to Apr 2024
TIDMTGP
RNS Number : 4083V
Tekmar Group PLC
03 December 2019
3 December 2019
TEKMAR GROUP PLC
("Tekmar Group", the "Group" or the "Company")
HALF YEAR RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2019
Tekmar Group (AIM: TGP), a leading technology provider of subsea protection systems for the global offshore energy markets, announces its half year results for the six months ended 30 September 2019 ("HY20" or the "Period").
Highlights:
Hot Features
Premium
-- Strong revenue growth across all divisions and results in line
with management expectations
-- Record Order Book(3) of GBP15.9m - up 23.26% YOY with several
contract wins across divisions throughout the Period
-- Enquiry Book(5) increased YOY and sales conversion on track
-- Diversification strategy on track with acquisitions making valuable
strategic contribution - Subsea Innovation and Ryder Geotechnical
delivering strong results
-- Tekmar Energy revenues up by 73% YOY, strengthening its position
overseas securing work in APAC and USA
-- Awarded the London Stock Exchange's Green Economy Mark
-- Business remains debt free with a positive cash balance of GBP3.9m
-- Long term global outlook in the Group's key markets improving,
with forecasts for future offshore wind generation up by 43.5%
YOY and the oil price anticipated to remain above the investment
floor of $50pbl
Key financials:
HY20 HY19 FY19
-- Revenue GBP17.1m GBP7.1m GBP28.1m
-- Adjusted EBITDA(1) GBP2.0m (GBP0.8m) GBP4.8m
-- Cash GBP3.9m GBP7.6m GBP4.2m
-- Market Visibility(2) GBP40.5m GBP38.1m GBP50.2m
Sales KPIs:
HY20 HY19 FY19
-- Order Book(3) GBP15.9m GBP12.9m GBP7.2m
-- Preferred Bidder(4) GBP7.5m GBP18.1m GBP15.0m
-- Enquiry Book(5) GBP186m GBP170m GBP195m
-- LTM sales conversion(6) 56% 50% 62%
Outlook:
-- Group firmly on track to meet market expectations for FY20
-- Anticipated seasonality in product mix and associated margins
continues with Group's revenue expected to be H2 weighted
-- Revenue split expected to remain at current levels of c.60%
Offshore Wind and c.40% Subsea
-- Group acquired Pipeshield International Limited ("Pipeshield")
on 9 October 2019(7) and integration progressing well, with
an additional GBP45 million contribution to the Enquiry Book(5)
(not reflected in HY20 numbers)(7)
Alasdair MacDonald, Non-executive Chairman of Tekmar Group, said:
"We have made great progress in the first half of the year, delivering record revenue growth and securing the Company's largest ever Order Book. All our businesses performed well, the outlook remains very positive with our core market, offshore wind, forecast to grow substantially in the long term and the integration of our acquisitions and long-term strategy have progressed well. We believe that the Group is firmly on track to meet our expectations in the current year with positive market indications for the future."
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) Market Visibility is defined as: Revenue + Order Book + Preferred
Bidder.
(3) Order Book is defined as signed contracts with clients. Expected
revenue recognition within 6 months.
(4) Preferred Bidder defined as being out of competitive tender process
and selected as sole bidder in active contract negotiations.
Expected revenue recognition within 12 months.
(5) All active lines of enquiry within the Tekmar Group. Expected
revenue recognition within 3 years.
(6) Last Twelve Months conversion rate; Total Enquiry (Bid) to Win
ratio.
(7) The acquisition of Pipeshield, which occurred post-Period end,
is not reflected in these results.
Enquiries:
Tekmar Group plc James Ritchie-Bland, Chief Executive Officer Sue Hurst, Chief Financial Officer +44 (0)1325 379 520 Grant Thornton UK LLP (Nominated Adviser) Philip Secrett / Samantha Harrison +44 (0)20 7383 5100 Berenberg (Broker) Chris Bowman / Ben Wright / Richard Salmond +44 (0)20 3207 7800 Belvedere Communications (Financial PR) +44 (0) 20 3687 2750 Cat Valentine (cvalentine@belvederepr.com) +44 (0) 7715 769 078 Keeley Clarke (kclarke@belvederepr.co.uk) +44 (0) 7967 816 525 Llew Angus (langus@belvederepr.com) +44 (0) 7407 023 147
About Tekmar Group plc - https://investors.tekmar.co.uk/
Tekmar's vision is to be the partner of choice for the supply and installation support of subsea protection equipment to the global offshore energy markets. The Group has five primary operating companies; these are Tekmar Energy Limited, Subsea Innovation Limited, AgileTek Engineering Limited, Ryder Geotechnical Limited and Pipeshield International limited.
Tekmar Energy is a global market leader in protection systems for subsea cable, umbilical and flexible pipe. Tekmar has been trusted to protect billions of Euros worth of assets in the offshore wind, oil and gas, wave, tidal and interconnector markets since 1985: https://www.tekmar.co.uk/
Subsea Innovation is a global leader in the design, manufacture and supply of complex engineered equipment and technology used in the offshore energy market. Its products include large equipment handling systems which operate on the back of pipelay installation vessels; emergency pipeline repair clamps (EPRC) which protect major oil and gas pipelines, and bespoke equipment for use in the construction of offshore energy projects: https://www.subsea.co.uk/
AgileTek Engineering is an award-winning subsea engineering consultancy for offshore energy projects. AgileTek helps its clients de-risk projects through advanced computer simulation and analysis. https://agiletek.co.uk/. AgileDat, a division of AgileTek, provides software development, cloud architecture and data analytics services. https://agiledat.co.uk/
Ryder Geotechnical provides expert geotechnical design and consulting services to the offshore wind and subsea oil and gas sectors. Services include offshore structure foundation design, geohazard assessment and subsea cable routing and burial assessment. https://www.rydergeotechnical.com/
Pipeshield International is a market leading provider of specialised subsea protection solutions, in the form of concrete mattresses. These mattresses are used for the stabilisation and impact protection of subsea equipment, in areas where they cannot be buried, and to limit the development of scour (seabed erosion), particularly local to that of a foundation, pipeline or in marine ports. http://www.pipeshield.com/.
The Group and Tekmar Energy are headquartered in Newton Aycliffe; AgileTek and Ryder operate from offices in London and Newcastle; Subsea Innovation has its head office and manufacturing centre in Darlington. Pipeshield's headquarters are in Lowestoft with manufacturing in Blyth, Northumberland. Tekmar also has representation in South Korea, USA, China and across the Middle East.
CHIEF EXECUTIVE'S REVIEW
I am pleased to report that the Group has continued to deliver on its diversification strategy to expand its product and service offering, whilst also achieving record H1 revenues. All of the Group's businesses performed well during the Period, including Ryder Geotechnical, a small but strategically important acquisition which was integrated within the Group shortly before the FY19 year end.
Our markets have continued to strengthen during the Period, as described in the market section below, showing positive signs for future growth. In the short-term, as the offshore wind market becomes more economically competitive with less reliance on subsidies, the European market is unwinding slower than we have experienced previously but, at the same time, we are seeing increases in the size of projects in the medium to long-term. Tekmar Energy continues to maintain its dominant market share for its core product TEKLINK(R) cable protection and we are also seeing increasing volumes and prospects in the Asian market for our other cable protection/non TEKLINK(R) products.
The Group's strategy to diversify away from its reliance on a single product continues to progress well. Our sales volumes in the Subsea market are increasing, as the Group is able to offer a unique value proposition for its clients, combining multiple products and services for the provision of subsea protection and installation equipment for the global offshore oil and gas market. This proposition will be further enhanced by Pipeshield, which we acquired shortly after the half year end.
Market Visibility(2) - our primary measure for Group outlook, which is calculated from the sum of the turnover for the Period plus pending contracts under negotiation on which we have Preferred Bidder Status and the Group's Secured Order Book - has improved slightly on HY19. When comparing this measure to FY19, the reduction reflects the level of pending work successfully converted into contracts during Period. We have delivered GBP7.2m of the secured order backlog from FY19 and converted an additional GBP10m of orders into revenue. The doubling of the order book to GBP15m (FY19 GBP7.2m) shows strong progress and the majority of this work is expected to be delivered within the second half. We anticipate the Enquiry Book and preferred bidder position to increase towards the year end.
The acquisitions that we have completed since the Group's IPO in June 2018, as part of our diversification strategy, have moved us closer to achieving our vision of being the partner of choice for the supply and installation support of subsea protection equipment to global offshore energy markets. We are pleased with how our portfolio of complementary businesses is beginning to interact and work together. As the new businesses are bedded in, our focus will turn to synergies, like the remedial contract award in February 2019 (RNS 0752R), on which all Group companies contributed to the project. We look forward to reporting further on our progress at the full year. The Board continues to explore further potential acquisitions to strengthen and expand our product offering over the full lifecycle of subsea projects further.
As detailed in the financial review, seasonality in the product mix and its associated effect continues. The Board expects the Group's revenue to be weighted to the second half of the financial year with the market split remaining at current levels of c.60% Offshore Wind and c.40% Subsea. Tekmar Energy is expected to contribute 65% to FY20. Of this, we expect our core offshore wind product, TekLink(R), to contribute c.35% to Group revenue, as product diversification and the short-term delays in projects (detailed above) continue. Subsea Innovation is expected to contribute 20% with Pipeshield and AgileTek at 10% and 5% respectively. Margins across the Group's product portfolio have been broadly maintained YOY and overall Group margin is reflective of changes in product mix.
Operational review
The Group has performed strongly during the Period across all divisions and we are encouraged by the long-term growth drivers, which underpin an improving future performance. The benefit of the Group's focus on diversification to additional Subsea products has enabled us to offset delays in revenue from European offshore wind contracts. As a result, we expect to report record revenues in FY20, in excess of current management expectations and to report profit for the financial year in line with current management expectations.
Tekmar Energy, which comprised 68% of Group HY20 revenues, made substantial progress on its planned expansion into Asia. During the Period, it won several contracts, most notably the supply of its cable protection system ("CPS") on Taiwan's second wind farm installation. This followed earlier successes on Formosa Phase 1 and Phase 2 projects. In Europe, the business was awarded its largest contract to date for the supply of its flagship cable protection system product, TEKLINK(R), to one of the world's largest offshore wind farm developments, the Hornsea Two project for Orsted. Revenues in the business increased by 73% to GBP11.6m in the Period (HY19: GBP6.7m).
Subsea Innovation has performed strongly since we acquired the business in September 2018, with the business benefitting from being part of the Group. The business continued to improve in HY20, delivering 29% of Group revenue at GBP4.9m for the Period (HY19: GBP0.2m). Subsea Innovation is working on several high-profile design and build back-deck equipment projects for pipe-laying, which are expected to be completed in the current financial year. In addition, Subsea Innovation has also been working alongside other Group businesses to produce bespoke subsea tool designs for several remedial cable protection solutions, including a prototype cleaning tool to be used in next year's summer campaign. Since it joined Tekmar Group in 2018, the business has received an increasing number of enquiries, demonstrating the benefits of our strategy to provide complementary technologies and the wider Group's marketing and business development activities.
AgileTek Engineering, which includes Ryder Geotechnical, supports the geotechnical assessments for foundation design and cable burial risk assessment. The combined businesses contributed 6% to Group revenue and make a valuable strategic contribution to the wider Group, bringing opportunities onto the Group's radar at the earlier stages of a project's lifecycle. Agiletek differentiates the Group's offering, providing advanced engineering simulation using cloud computing to handle large, complex calculations. Revenue in the Period more than doubled to GBP1.1m (HY19 GBP0.4m).
In October 2019, post the Period end, we acquired Pipeshield, a global market leader in the provision of patented subsea concrete mattress protection systems, for a total consideration of GBP6.5m. Pipeshield has broadened our portfolio of complementary technologies and takes us one step closer to our vision of being the partner of choice for the supply and installation of subsea protection equipment to global offshore energy markets. The integration of Pipeshield is progressing to plan and this acquisition has added a further GBP45m to the Enquiry Book (in addition to reported half year KPI's) and we expect the business to make a small contribution to the full year results and a positive higher contribution in the following year.
I am also pleased to note that Tekmar Group was awarded the Green Economy Mark from the London Stock Exchange, shortly after the half year end. The mark identifies companies and listed funds that generate between 50% and 100% of total annual revenues from products and services that contribute to the global green economy.
Markets
The offshore wind market is expanding and is an exciting and substantial opportunity for the Group. The staggering growth forecast in this market is being expedited by the improving economics of renewable energy. The latest UK contract for difference ("CFD") auction price of GBP39.65/MW/h is below the wholesale price of electricity for the first time in the UK. This important milestone demonstrates offshore wind's profitability, even without subsidies, which the Board believes is a catalyst for significant growth in the medium to long term. A recent report from the International Energy Agency ("IEA") forecasts that global offshore wind power capacity will increase 15-fold over the next two decades, becoming a $1 trillion business. IEA reports that current total global capacity, of which 80% is European, is just 23GW, representing only 0.3% of global electricity generation. Offshore wind has the potential to become a mainstay of the world's power supply, providing a prodigious market growth opportunity. Analysts at 4C Offshore appear to support this view, having recently upgraded the global outlook for offshore wind from 170GW to 244GW by 2030.
Global demand in other subsea sectors - including offshore oil and gas, telecoms and power interconnectors, along with other renewables projects - remains stable. With our broadening product and services portfolio, these sectors represent an increasing opportunity for the Group. According to Westwood's forecasts, the oil price is expected to stay above the key trigger price for investment of $50pbl for the foreseeable future.
Financial review
Key financials HY20 HY19 FY19 GBPm Revenue 17.1 7.1 28.1 Gross profit 5.4 1.6 9.9 Adjusted EBITDA 2.0 (0.8) 4.8 Profit before taxation 0.8 (2.6) 2.0 Profit after taxation 0.7 (2.5) 2.4 ----------------------- ----- ------ ----- Adjusted EPS (pence)* 2.2 (4.0) 6.2 ----------------------- ----- ------ -----
*Adjusted EPS is a key metric used by the Directors since IPO as it aligns to the analysts' method of calculation (see Note 6).
Revenue
Revenue increased significantly across all businesses in HY20, compared to the prior half year. Subsea Innovation, acquired in September 2018, contributed over the full Period for the first time, generating revenue of GBP4.9m (HY19: GBP0.2m), which included two large design and build projects. Tekmar Energy's revenue of GBP11.6m (HY19: GBP6.7m) comprised three large offshore projects, including one in China. AgileTek Engineering benefited from the acquisition of Ryder Geotechnical at the end of FY19, contributing GBP1.1m (HY19: GBP0.4m) to Group revenue.
Gross profit
The improvement in gross profit resulted from a more favourable product mix, with a stronger weighting in HY20 on higher margin offshore wind projects. We do still experience a level of seasonality in project timings, with a higher weighting in H2 due to a preference for projects to be delivered in advance of installation campaigns in the summer months.
EBITDA
EBITDA is one of our primary KPI's and we present an adjusted measure, removing certain non-cash and exceptional items to provide a more accurate reflection of underlying earnings. As well as adding back depreciation and amortisation to operating profit, we also add back share-based payments costs and exceptional costs. In the Period, exceptional costs of GBP69k primarily comprised professional costs relating to the acquisition of Pipeshield, which was completed in October 2019.
Profit before tax
Depreciation and amortisation in HY20 included charges for Subsea Innovation for the whole period. Finance costs related to interest on bank guarantees, which are a common requirement for offshore wind contracts. Finance income relates to revaluation of forward foreign currency contracts.
Foreign currency
During the Period, we continued to hold forward foreign currency contracts to mitigate against movements in the Euro/GBP rate for those contracts that are paid in Euros. We extended this coverage for two new projects awarded in the Period, again payable in Euros. The closing rate for revaluation of Euro balances at the 30 September 2019 was 1.1302 (31 March 2019: 1.1605).
Results by business and market
BY BUSINESS BY MARKET
GBPm HY20 HY19 FY19 GBPm HY20 HY19 FY19
----- ----- ----- ----- ----- -----
REVENUE REVENUE
Tekmar Energy 11.6 6.7 24.1 Offshore wind 9.8 5.4 19.7
Subsea Innovation 4.9 0.2 3.5 Subsea 7.3 1.7 8.4
AgileTek 1.1 0.4 1.0
Intercompany elimination (0.5) (0.2) (0.5)
----- ----- ----- ----- ----- -----
Total 17.1 7.1 28.1 Total 17.1 7.1 28.1
----- ----- ----- ----- ----- -----
GROSS PROFIT GROSS PROFIT
Tekmar Energy 3.4 1.3 8.2 Offshore wind 4.3 2.3 9.6
Subsea Innovation 1.3 0.0 1.1 Subsea 2.1 0.3 2.8
Unallocated
AgileTek 0.7 0.3 0.6 costs (1.0) (1.0) (2.5)
----- ----- ----- ----- ----- -----
Total 5.4 1.6 9.9 Total 5.4 1.6 9.9
----- ----- ----- ----- ----- -----
ADJUSTED EBITDA
Tekmar Energy 1.5 (0.5) 4.6
Subsea Innovation 0.5 (0.1) 0.5
AgileTek 0.2 0.1 0.1
Group (0.2) (0.3) (0.4)
----- ----- -----
Total 2.0 (0.8) 4.8
----- ----- -----
Results include Subsea Innovation and Ryder Geotechnical for the full six months. The latter is a subsidiary of AgileTek Engineering and financials are reported through this business. Unallocated costs (gross profit by market) relate to production costs in Tekmar Energy which we do not allocate by sector.
Balance sheet
GBPm HY20 HY19 FY19 Property, plant & equipment 5.2 3.7 5.5 Other non-current assets 21.7 21.8 21.8 Stock 2.1 1.7 1.9 Trade & other receivables 20.0 7.0 20.0 Cash 3.9 7.6 4.2 Trade & other payables (8.4) (2.8) (9.8) Other non-current liabilities (0.7) (1.0) (0.8) ------------------------------ ----- ----- -----
Property, plant & equipment
Property, plant and equipment has remained at similar levels to the year end and the movement from HY19 relates to the assets acquired under the Subsea Innovation acquisition.
Other non-current assets
This relates to the goodwill arising on the original management buy-out in 2011 (GBP19.6m), the intangibles arising on the acquisition of Subsea Innovation less amortisation on these (GBP1.0m) and investment in product development (GBP1.0m).
Trade and other receivables
Trade and other receivables comprise GBP3.4m trade debtors, GBP15.5m accrued income and GBP1.1m other debtors. Whilst the accrued income balance remains high, a significant proportion of this relates to payment milestones under normal project billing cycles and reflects the increase in revenue during the Period.
Tekmar Energy had GBP13m of accrued income at the Period end, with GBP7.4m for HY20 projects and GBP5.6m relating to delayed invoicing on three offshore wind projects from FY19. Of the latter, we have invoiced GBP2.7m since the Period end on escalated payment terms. The customers in question are very large, financially robust organisations and we have no concerns over non payment.
Within Subsea Innovation there was GBP2.3m of accrued income with GBP1.7m across two large design and build projects being built over the Period end. This will be invoiced within the next few months on completion of the projects.
Cash
Despite the delays in invoicing mentioned above, cash management is a major area of focus across the Group and we closed the period with GBP3.9m of free cash. On 9 October 2019 we completed the acquisition of Pipeshield with a cash payment of GBP3.0m, offset by GBP1.1m of cash and GBP1.7m of working capital within this business.
Trade and other payables
Trade and other payables include the deferred earn-out consideration (GBP1m) under the Subsea Innovation acquisition which we expect to pay within 12 months.
Other non-current liabilities
Other non-current liabilities relate to the lease liabilities in relation to IFRS16 and deferred grant income.
Outlook
Given the Order Book and the long-term positive global outlook for offshore wind and stability in the oil and gas market, the Board believes that the Group is firmly on track to meet its expectations for the full year ending 31 March 2020 and remains confident in the future success of the business.
James Ritchie
Chief Executive Officer
3 December 2019
Consolidated Statement of Comprehensive Income
Half year Half year Year ended
ended 30 ended 30 31 March
Note September September 2019
2019 2018
------- ----------- ----------- -----------
GBP'000 GBP'000 GBP'000
Revenue 4 17,093 7,121 28,082
Cost of sales (11,653) (5,488) (18,190)
----------- ----------- -----------
Gross profit 5,440 1,633 9,892
Operating expenses (4,645) (3,252) (6,987)
Other operating income - 12 -
----------- ----------- -----------
Group operating profit/(loss) 795 (1,607) 2,905
Analysed as:
Adjusted EBITDA([1]) 1,975 (763) 4,833
Depreciation (545) (236) (808)
Amortisation 8 (306) (175) (476)
Share based payments charge (260) (186) (418)
Exceptional items (69) (247) (226)
--------------------------------------- ------- ----------- ----------- -----------
Group operating profit/(loss) 795 (1,607) 2,905
--------------------------------------- ------- ----------- ----------- -----------
Finance costs 5 (47) (1,006) (1,006)
Finance income 5 78 1 147
----------- ----------- -----------
Net finance costs 31 (1,005) (919)
Profit/(loss) before taxation 826 (2,612) 1,986
Taxation 7 (102) 161 407
----------- ----------- -----------
Profit/(loss) for the period and
total comprehensive income/(expense) 724 (2,451) 2,393
=========== =========== ===========
Earnings/(loss) per share (pence)
Basic 6 1.43 (4.90) 4.75
Diluted 6 1.38 (4.90) 4.63
=========== =========== ===========
There are no items of Other Comprehensive Income.
Note 1: Adjusted EBITDA, which 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.
All results derive from continuing operations.
Consolidated Balance Sheet
Half year Half year Year ended
Note ended 30 ended 30 31 March
September September 2019
2019 2018
------- ------------ ------------ -------------
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 5,198 3,681 5,501
Goodwill and other intangibles 8 21,600 21,575 21,837
Deferred tax asset 79 211 -
------------ ------------ -------------
Total non-current assets 26,877 25,467 27,338
------------ ------------ -------------
Current assets
Inventory 2,137 1,741 1,914
Trade and other receivables 9 19,886 6,695 19,537
Corporation tax recoverable 90 263 459
Cash and cash equivalents 3,867 7,605 4,190
------------ ------------ -------------
Total current assets 25,980 16,304 26,100
------------ ------------ -------------
Total assets 52,857 41,771 53,438
============ ============ =============
Equity and liabilities
Share capital 507 507 507
Share premium 64,100 65,093 64,100
Merger relief reserve 993 - 993
Merger reserve (12,685) (12,685) (12,685)
Retained losses (9,121) (14,989) (10,098)
------------ ------------ -------------
Total equity 43,794 37,926 42,817
Non-current liabilities
Borrowings 314 - 487
Trade and other payables 359 1,000 358
Deferred tax liability - - 3
Total non-current liabilities 673 1,000 848
------------ ------------ -------------
Current liabilities
Trade and other payables 8,004 2,711 9,395
Provisions - 134 -
Other interest-bearing loans and
borrowings 386 - 378
------------ ------------ -------------
Total current liabilities 8,390 2,845 9,773
------------ ------------ -------------
Total liabilities 9,063 3,845 10,621
------------ ------------ -------------
Total equity and liabilities 52,857 41,771 53,438
============ ============ =============
Consolidated Statement of Changes in Equity
Merger relief
Share capital Share premium reserve Merger reserve* Retained earnings Total equity
--------------- ------------- ----------------- --------------- ----------------- ------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
April 2018 - - - 2,886 (12,704) (9,818)
=============== ============= ================= =============== ================= ============
Adjustment on
adoption of IFRS
16 - - - - (163) (163)
Adjusted balance
at 1 April 2018 - - - 2,886 (12,867) (9,981)
=============== ============= ================= =============== ================= ============
Loss for the
period - - - - (2,451) (2,451)
Total
comprehensive
expense for the
period - - - - (2,451) (2,451)
Group
reorganisation - - - (15,571) - (15,571)
Issue of shares
on IPO 500 64,500 - - - 65,000
Expenses of the
IPO - (400) - - - (400)
Issue of shares
post IPO 7 993 - - - 1,000
Share based
payments - - - - 166 166
Total
transactions
with owners,
recognised
directly in
equity 507 65,093 - (15,571) 166 50,195
Balance at 30
September 2018 507 65,093 - (12,685) (14,989) 37,926
=============== ============= ================= =============== ================= ============
Reserves
reclassification - (993) 993 - - -
Profit for the
period - - - - 4,891 4,891
Total
comprehensive
income for the
period - - - - 4,891 4,891
Balance at 31
March 2019 507 64,100 993 (12,685) (10,098) 42,817
=============== ============= ================= =============== ================= ============
Profit for the
period - - - - 724 724
--------------- ------------- ----------------- --------------- ----------------- ------------
Total
comprehensive
income for the
period - - - - 724 724
--------------- ------------- ----------------- --------------- ----------------- ------------
Share based
payments - - - - 253 253
--------------- ------------- ----------------- --------------- ----------------- ------------
Total
transactions
with owners,
recognised
directly in
equity - - - - 253 253
Balance at 30
September 2019 507 64,100 993 (12,685) (9,121) 43,794
=============== ============= ================= =============== ================= ============
*In the previous year's half year report the Merger reserve was referred to as the Consolidation reserve. The change is in description of the balance only.
Consolidated Cash Flow Statement
Half year Half year
ended 30 ended 30 Year ended
September September 31 March
2019 2018 2019
------------ ----------- -----------
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit/(loss) before taxation 826 (2,612) 1,986
Adjustments for:
Depreciation 546 236 808
Amortisation of intangible assets 306 175 476
Share based payments charge 228 186 345
Gain on bargain purchase - - (95)
Finance costs 47 1,006 1,066
Finance income (78) (1) (147)
------------ ----------- -----------
1,875 (1,010) 4,439
Changes in working capital:
(Increase)/decrease in inventories (223) 349 176
(Increase)/decrease in trade and
other receivables (349) 2,112 (10,493)
(Decrease)/increase in trade and
other payables (1,390) (2,607) 2,876
Increase/(decrease) in provisions - 3 (131)
------------ ----------- -----------
Cash used in from operations (87) (1,153) (3,133)
Tax recovered 211 134 180
------------ ----------- -----------
Net cash inflow/(outflow) from operating
activities 124 (1,019) (2,953)
------------ ----------- -----------
Cash flows from investing activities
Purchase of property, plant and
equipment (243) (176) (996)
Purchase of intangible assets (69) (266) (865)
Proceeds on sale of property, plant
and equipment - - 3
Acquisition of subsidiary net of
cash acquired - (181) (168)
Interest received 78 1 147
------------ ----------- -----------
Net cash outflow from investing
activities (234) (622) (1,879)
------------ ----------- -----------
Cash flows from financing activities
Repayment of borrowings (166) (33,058) (33,282)
Repayment relating to acquisition - (1,771) (1,771)
Proceeds from issues of shares - 49,429 49,429
Expenses of the IPO - (400) (400)
Interest paid (47) (7,571) (7,571)
------------ ----------- -----------
Net cash (outflow)/inflow from financing
activities (213) 6,629 6,405
------------ ----------- -----------
Net (decrease)/increase in cash
and cash equivalents (323) 4,988 1,573
Cash and cash equivalents at beginning
of period 4,190 2,617 2,617
Cash and cash equivalents at end
of period 3,867 7,605 4,190
------------ ----------- -----------
Consolidated Cash Flow Statement
Analysis of changes in net debt
As at
As at Capitalisation 30 September
1 April 2019 Cash flows of interest 2019
-------------- ----------- --------------- --------------
GBP'000 GBP'000 GBP'000 GBP'000
Cash 4,190 (323) - 3,867
As at As at
1 October Capitalisation 31 March
2018 Cash flows of interest 2019
-------------- ----------- --------------- --------------
GBP'000 GBP'000 GBP'000 GBP'000
Cash 7,605 (3,415) - 4,190
As at As at
1 April Capitalisation 30 September
2018 Cash flows of interest 2018
-------------- ----------- --------------- --------------
GBP'000 GBP'000 GBP'000 GBP'000
Cash 2,617 4,988 - 7,605
Accrued interest 7,168 (7,571) 403 -
Borrowings 32,521 (33,058) 537 -
============== =========== =============== ==============
Notes to the Condensed consolidated interim financial information
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 Unit 1, Park 2000, Millennium Way, Aycliffe Business Park, Newton Aycliffe, County Durham, DL5 6AR. 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 cable, umbilical and flexible protection systems operating across the Offshore Wind, Oil & Gas and other energy sectors, including associated subsea engineering services.
These condensed interim financial statements ("interim financial statements") have not been audited or reviewed by the Company's auditor.
Forward looking statements
Certain statements in this results announcement 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 these expressed or implied by these forward-looking statements.
2. ACCOUNTING POLICIES
(a) Basis of preparation
The interim financial statements for the six months ended 30 September 2019 have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting". They should be read in conjunction with the Annual Report for the year ended 31 March 2019 which was prepared in accordance with International Financial Reporting Standards as endorsed by the European Union ('IFRS'), International Financial Reporting Standards Interpretation Committee ('IFRS IC') interpretations and those provisions of the Companies Act 2006 applicable to companies reporting under IFRS. The interim financial statements have been prepared on the going concern basis and on the historical cost convention modified for the revaluation of certain financial instruments.
These interim financial statements do not constitute the Group's statutory accounts within the meaning of section 434 of the Companies Act 2006. The comparatives for the full year ended 31 March 2019 are not the Company's full statutory accounts for that year. They have been extracted from the 2019 Annual Report. The accounting policies applied to these financial statements are in line with those disclosed in the 2019 Annual Report.
(b) Going concern
The Group meets its day-to-day working capital requirements through its available banking facilities. The Directors have prepared cash flow forecasts and projections for the periods ending 31 March 2021. Taking account of reasonably foreseeable changes in trading performance, these forecasts and projections show that the Group is expected to have a sufficient level of financial resources available through current and future facilities. Furthermore, the Directors have assessed the future funding requirements of the Group and compared them with the level of available borrowing facilities. Based on this work, the Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the interim financial statements.
(c) New standards, amendments and interpretations
At the date of authorisation of these interim financial statements there are no standards in issue which are expected to have a material impact on the Group.
Judgements made by the Directors in the application of these accounting policies that have a significant effect on the interim financial statements together with estimates with a significant risk of material adjustment in the next year are discussed in note 3 to the interim financial statements.
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
(a) Accounting estimates
Impairment of goodwill
The carrying amount of goodwill is GBP19,596,000 as at 30 September 2019 (30 September 2018: GBP20,841,000; 31 March 2019: GBP19,362,000). The Directors have carried out an impairment review within the last year in accordance with the accounting policies. The forecast cash generation for each Cash Generating Unit ("CGU") and the Weighted Average Cost of Capital ("WACC") represent significant assumptions.
The cash flows are based on a three-year forecast with growth between 13.2% and 14.9%. Subsequent years are based on a reduced growth rate of 2.0% into perpetuity.
The discount rate used was the Group's pre-tax WACC of 10.0%.
The value in use calculations performed for the impairment review, together with sensitivity analysis using reasonable assumptions, indicate ample headroom and therefore do not give rise to impairment concerns. Having completed the impairment reviews no impairments have been identified. Management does not consider that there is any reasonable downside scenario which would result in an impairment.
(b) Accounting judgements
Judgements in applying accounting policies and key sources of estimation uncertainty
In the preparation of the interim financial statements the Directors, in applying the accounting policies of the Group, make some judgements and estimates that effect the reported amounts in the interim financial statements. The following are the areas requiring the use of judgement and estimates that may significantly impact the financial statements.
Revenue recognition
The recognition of revenue on contracts requires judgement and estimates on the overall contract margin. This judgement is based on contract value, historical experience and forecasts of future outcomes. Judgement is applied in determining the most appropriate method to apply in respect of recognising revenue over time as the service is performed using either the input or output methods.
Share based payments
The weighted average fair value of equity options granted is determined using various fair value models, including Black-Scholes-Merton and Monte Carlo models. The Group makes assumptions in identifying the appropriate inputs significant. The assumptions are subject to estimation and are considered for reasonableness at each balance sheet date.
4. SEGMENTAL ANALYSIS
The trading operations of the Group are only in the subsea industry and are all continuing. The central activities, comprising services and assets provided to Group companies, are considered incidental to the activities of the Group and have therefore not been shown as a separate operating segment but have been subsumed within the subsea industry. All assets of the Group reside in the UK.
Major customers
In the half year ended 30 September 2019 there were three major customers that individually accounted for at least 10% of total revenues (half year ended 30 September 2018: three customers; year ended 31 March 2019: three customers). The revenues relating to these in the half year 30 September 2019 were GBP8,047,000 (half year ended 30 September 2018: GBP3,219,000; year ended 31 March 2019: GBP11,217,000). Included within this is revenue from multiple projects with different entities within each customer.
Analysis of revenue
Half year Half year Year ended
ended 30 ended 30 31 March
September September 2019
2019 2018
----------- ----------- -----------
GBP'000 GBP'000 GBP'000
UK & Ireland 10,386 1,677 10,483
Rest of the World 6,707 5,444 17,599
----------- ----------- -----------
17,093 7,121 28,082
=========== =========== ===========
5. NET FINANCE COSTS
Half year Half year Year ended
ended 30 ended 30 31 March
September September 2019
2019 2018
----------- ----------- -----------
GBP'000 GBP'000 GBP'000
Interest payable and similar charges
On loan notes - 144 144
On other loans 47 585 664
On preference shares classed as liabilities - 258 258
Fair value movement on forward foreign - 19 -
exchange contracts
----------- ----------- -----------
Total interest payable and similar
charges 47 1,006 1,066
Interest receivable and similar income
Interest receivable (1) (1) (5)
Fair value movement on forward foreign
exchange contracts (77) - (142)
Total interest receivable and similar
income (78) (1) (147)
----------- ----------- -----------
Net finance costs (31) 1,005 919
=========== =========== ===========
6. EARNINGS PER SHARE
Basic and diluted earnings per share are calculated by dividing the earnings attributable to equity shareholders by the weighted average number of ordinary shares in issue.
The calculation of basic and diluted loss per share is based on the following data:
Half year Half year Year ended
ended 30 ended 30 31 March
September September 2019
2019 2018
----------- ----------- -----------
Earnings (GBP'000)
Earnings for the purposes of basic
and diluted earnings per share being
loss for the year attributable to
equity shareholders 724 (2,451) 2,393
----------- ----------- -----------
Number of shares
Weighted average number of shares
for the purposes of basic earnings
per share 50,687,852 50,055,942 50,351,745
Weighted average dilutive effect
of conditional share awards 1,625,000 - 1,336,986
----------- ----------- -----------
Weighted average number of shares
for the purposes of diluted earnings
per share 52,312,852 50,055,942 51,688,731
----------- ----------- -----------
Earnings/(loss) per ordinary share
(pence)
Basic earnings/(loss) per ordinary
share 1.43 (4.90) 4.75
Diluted earnings/(loss) per ordinary
share 1.38 (4.90) 4.63
----------- ----------- -----------
Adjusted earnings per ordinary share (pence)*
The calculation of adjusted earnings per share is based on the following data:
Earnings (GBP'000)
Profit/(loss) for the period attributable
to equity shareholders 724 (2,451) 2,393
------ -------- ------
Add back/(deduct):
Amortisation as a result of business
combinations 111 - 109
Exceptional items 69 247 226
Share based payments 260 186 418
Tax effect of the above (54) - -
------ -------- ------
Adjusted earnings 1,110 (2,018) 3,146
====== ======== ======
Number of shares
Number of shares in issue at the
period end 50,687,852 50,687,852 50,687,852
Adjusted earnings per ordinary share
(pence) 2.19 (3.98) 6.21
*Adjusted earnings per share is calculated as profit for the period adjusted for amortisation as a result of business combinations, exceptional items, share based payments 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.
7. TAXATION
The taxation charge represents the profit before tax for the period with an effective tax rate based on that which we expect for the full year.
Our expectation is that the Group will continue to benefit from incentives, such as Patent Box, and this will lead to an effective tax rate that is lower than the main rate of corporation tax for both the current and future years.
8. GOODWILL AND OTHER INTANGIBLES
Product Trade Customer
Goodwill Software development name relationships Total
--------- --------- ------------- -------- --------------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
COST
As at 1 April 2018 23,471 151 1,229 - - 24,851
Additions 1,479 - 266 - - 1,745
As at 30 September
2018 24,950 151 1,495 - - 26,596
Additions - 93 506 - - 599
Disposals - (88) - - - (88)
Purchase price
allocation reclassification (1,245) 25 - 738 446 (36)
As at 31 March
2019 23,705 181 2,001 738 446 27,071
Additions - 26 43 - - 69
As at 30 September
2019 23,705 207 2,044 738 446 27,140
--------- --------- ------------- -------- --------------- --------
AMORTISATION AND
IMPAIRMENT
As at 1 April 2018 4,109 130 607 - - 4,846
Charge for the
period - 21 154 - - 175
--------- --------- ------------- -------- --------------- --------
As at 30 September
2018 4,109 151 761 - - 5,021
Charge for the
period - 15 177 36 73 301
Eliminated on disposal - (88) - - - (88)
--------- --------- ------------- -------- --------------- --------
As at 31 March
2019 4,109 78 938 36 73 5,234
--------- --------- ------------- -------- --------------- --------
Charge for the
period - 9 186 37 74 306
As at 30 September
2019 4,109 87 1,124 73 147 5,540
--------- --------- ------------- -------- --------------- --------
NET BOOK VALUE
As at 1 April 2018 19,362 21 622 - - 20,005
========= ========= ============= ======== =============== ========
As at 30 September
2018 20,841 - 734 - - 21,575
========= ========= ============= ======== =============== ========
As at 31 March
2019 19,596 103 1,063 702 373 21,837
========= ========= ============= ======== =============== ========
As at 30 September
2019 19,596 120 920 665 299 21,600
========= ========= ============= ======== =============== ========
The remaining amortisation periods for software and product development are six months to 36 months (half year ended 30 September 2018: six months to 36 months; year ended 31 March 2019: six months to 36 months).
Goodwill has been tested for impairment. The method, key assumptions and results of the impairment review are detailed below:
Goodwill is attributed to the only CGU within the Group, services to the subsea Offshore Wind and Oil and Gas sectors. Goodwill has been tested for impairment by assessing the value in use of the cash generating unit. The value in use calculations were based on projected cash flows in perpetuity. Budgeted cash flows for 2019 to 2021 were used. These were based on a three year forecast with growth rates of 13.2% to 14.9% applied for the following years. Subsequent years were based on a reduced rate of growth of 2.0% into perpetuity.
These growth rates are based on past experience and market conditions and discount rates are consistent with external information. The growth rates shown are the average applied to the cash flows of the individual cash generating units and do not form a basis for estimating the consolidated profits of the Group in the future.
The discount rate used to test the cash generating units was the Group's post-tax WACC of 10.0%.
The value in use calculations described above, together with sensitivity analysis using reasonable assumptions, indicate ample headroom and therefore do not give rise to impairment concerns. Having completed the impairment reviews no impairments have been identified. Management does not consider that there is any reasonable downside scenario which would result in an impairment.
9. TRADE AND OTHER RECEIVABLES
Half year Half year Year ended
ended 30 ended 30 31 March
September September 2019
2019 2018
----------- ----------- -----------
GBP'000 GBP'000 GBP'000
Trade receivables not past due 2,729 3,095 3,279
Trade receivables past due 709 211 1,462
----------- ----------- -----------
Trade receivables, net 3,438 3,306 4,741
Contract assets 15,492 2,954 13,515
Other debtors 327 78 693
Prepayments 418 357 441
Derivative financial assets 211 - 147
19,886 6,695 19,537
=========== =========== ===========
10. POST BALANCE SHEET EVENTS
On 9 October 2019 the Company acquired the entire share capital of Pipeshield International Ltd for an initial cash payment of GBP3,000,000, shares in the Group of GBP750,000 and deferred consideration of GBP2,750,000 - GBP1,500,000 payable on 9 April 2020 and GBP1,250,000 payable on 9 October 2020.
Pipeshield is a world leading technology provider of subsea concrete mattresses. These mattresses are used in the protection of subsea equipment such as pipelines and power cables within all marine environments, including offshore wind, marine renewables, oil and gas and marine civil engineering.
A full purchase price allocation exercise is in progress and will be finalised in the annual report.
Consideration as at 9 October 2019:
Consideration
--------------
GBP'000
Cash 3,000
Shares 750
Deferred consideration 2,750
--------------
6,500
==============
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.
END
IR FSSFWEFUSEIE
(END) Dow Jones Newswires
December 03, 2019 02:00 ET (07:00 GMT)
1 Year Tekmar Chart |
1 Month Tekmar Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
