FCRM.L Share News (FCRM)

(Sharecast News) - Multi-utility infrastructure and services provider Fulcrum Utility Services updated the market on its trading on Wednesday, reporting that during the first quarter of the 2021 financial year, it saw an increase in activity month-on-month as lockdown restrictions eased.
The AIM-traded firm said that momentum continued in the second quarter, with activity levels having now returned to pre-Covid levels.

As at 31 August, the company's order book had increased by 5% to £69.4m, from £66.2m on 31 March.

Overall, and despite the impact of Covid-19, the board said it was "pleased" with the firm's "resilient performance" during the period.

Fulcrum said it was still positioning itself to capitalise on the UK's net-zero and smart energy progress, and had invested in its sales force and back office functions.

It added that it was mindful of the short-term Covid-19 uncertainty that remained, and had therefore ensured that it had cost flexibility within its operations.

In the first half of the year, the group continued to secure a variety of new and significant contracts across its market sectors, the board reported, including in housing, where enquiry levels were "particularly strong" as housebuilders looked to meet demand stimulated by the changes to stamp duty.

Project wins there included a £1.1m contract to deliver a full multi-utility solution to a "major development" of 500 new homes.

In industrial and commercial, the company said it had seen "strong levels" of customer enquiries during the period, with project wins including a £0.7m project to design and install electricity infrastructure as part of a "substantial" extension to a well-known UK shopping centre, and a £0.7m contract to deliver a full multi-utility solution to a large new commercial development .

The company also won a £0.6m contract to deliver more than two kilometres of gas infrastructure at a major new renewable energy project for a food waste recycling specialist, with a significant project with a major charge point operator also secured, to design and install electric vehicle charging infrastructure for a national UK retailer.

Fulcrum said that while there was a "notable lengthening" in its sales cycle as a result of the coronavirus pandemic, industrial and commercial remained a "robust" part of the business, with the firm expecting to continue to win a number of significant new industrial and commercial projects.

In smart metering, Fulcrum said it continued to see "significant" interest from gas and electricity suppliers looking to ensure they would be able to fulfil their regulatory obligations to exchange 30 million domestic meters in the UK to smart meters by mid-2025.

In the period, the group secured new agreements with energy suppliers including Square 1 Energy, Colorado Energy, Goto Energy, Whoop Energy and Bryt Energy.

The board said those additional agreements demonstrated the success of its strategy to provide a "customer-focused, flexible and bespoke" service that supported suppliers of all sizes.

Additionally, Fulcrum announced the appointment of Jennifer Cutler as its new chief financial officer from 19 October.

The firm said Cutler was joining Fulcrum from land regenerator and property developer Harworth Group, where she was director of finance.

Looking ahead, Fulcrum said that despite the short-term market uncertainties created by Covid-19, it was confident in its ability to prosper in the longer term.

It said it had a "fundamentally robust" business, proven to operate effectively in the face of the pandemic-based challenges, with a strong order book and a strategy to capitalise on the structural tailwinds provided by the UK's transition to net zero.

"Although 2020 continues to present short-term market challenges, our ability to operate effectively through the Covid-19 pandemic is proven," said chief executive officer Daren Harris.

"There also remains a substantial, long-term, opportunity for the group to significantly grow its revenues across the attractive markets it serves given the UK's net-zero and a smart energy revolution."

Harris said the company was also "very encouraged" by its ability to bounce back from the initial impact of the pandemic in the first quarter of the new financial year, and was "pleased" to confirm that activity levels had returned to pre-Covid levels in the second quarter.

"However, we are not complacent and remain mindful of the current market challenges.

"We continue to carefully manage our costs, considering the short-term uncertainty created by Covid-19, but also recognise the need to ensure we are best positioned to capitalise on the opportunities presented by the need to decarbonise the UK's economy."

At 1226 BST, shares in Fulcrum Utility Services were up 0.82% at 36.8p.