Ra Internation. Regulatory News (RAI)

11 March 2024

RA INTERNATIONAL GROUP PLC

("RA International", "RA" or the "Group")

Trading Update

Resumption of profitability and a positive net cash position

RA International Group PLC (AIM: RAI), a specialist provider of complex and integrated remote site services to organisations globally, is pleased to provide a trading update for the 12 months ended 31 December 2023 (the "Period"). The Group expects to publish its full year results for the Period in early May 2024.

2023 Financial Highlights (Unaudited, subject to confirmation through the 2023 audit)

During the Period, the Group achieved revenue of approximately USD 58.3m (2022: USD 62.9m). Despite the reduction in revenue, the Group expects to report a profit before tax of approximately USD 0.2m (2022: loss of USD 13.0m), making the Period the first profitable financial year since 2020. EBITDA is expected to be approximately USD 6.3m (2022: loss of USD 4.1m).

Cash at the end of the Period was USD 16.8m (2022: USD 7.5m), with loan notes of USD 15.8m (2022: USD 14.0m). This marks a return to net cash for the first year since 2020.

A refinancing exercise was completed during the Period, extending the maturity of a significant portion of existing notes as well as raising an additional USD 1.8m. Of the USD 15.8m debt recorded at year end, USD 2.3m is to be repaid in November 2024, with the remaining USD 13.5m due for repayment in January 2027.

Operational / Financial Highlights

During the Period, RA's primary objective has been to implement a strategic approach that would promote stability and recovery from the many challenges that the Group has faced in recent years which have negatively impacted profit margins. The Group's focus has been directed towards enhancing operational efficiencies over long term contracts, re-evaluating and renegotiating material costs that were adversely affected by inflation, while actively pursuing measures to minimise delays on contract implementation. This combined with successful renegotiations with shipping companies and enhanced last-mile logistics performance, positions the Group well to identify sustained market growth opportunities in the future, underscoring its commitment to long-term success.

The recent restructuring of the RA Federal Services (RA FS) board, with Mr David Dacquino appointed as Chair, has led to a significant improvement in that company's performance, resulting in accelerated growth. The strategic changes made at the board level have effectively positioned RA FS for success, as evidenced by the recent awards of strategically important contracts in Suriname and Thailand with the US Government. This notable achievement not only demonstrates the strategic expertise of the board, but also showcases their ability to propel the company towards new levels of success and increased market share. The Group has also made significant progress in recovering value from the cancelled Palma Project, with USD 5.2m net income realised in H2 2023. USD 3.5m of net cash inflows relating to these profits were received in 2023, with the remaining balance of USD 1.7m being received in January 2024. The sale of the impaired assets not only provides significant cash inflows, together with adding to the Company's net income, but also removes the cost of storage going forward and opens up opportunities with new clients for additional work.

Outlook for 2024

· The core focus is to continue to build on the improvements made in 2023. To this effect, the Group is committed to increasing revenue and improving margins across all service sectors through an enhanced strategic focus on cost reduction and efficient overhead management.

· Our 2024 strategy is also focused on country diversification through new project implementation in Suriname, Thailand and the Maldives. With new RA FS projects delivering construction and refurbishment work, we will pursue further IFM work within these locations through the upselling of further services.

· Although financial prosperity is a key deliverable, we will not lose sight of our social impact and environmental vision of developing and offering ESG solutions to clients as part of our offering.

· Through the successful sale of assets, we have made significant advancements within the commercial mining and minerals sector, expanding our reach to new customers and territories. By effectively upselling our expertise to potential clients, we aim to increase revenue and solidify our presence in the marketplace during 2024.

· The appointment of Mr. Roberto Bruni as Chief Commercial Officer effective 1st of March 2024 marks a significant enhancement to our organization's strategic outlook for the coming year. With his expertise, we are poised to bolster our ability to cultivate a qualified pipeline, ultimately driving an enhanced conversion ratio and elevating our customer relationship management practices.

Soraya Narfeldt, CEO of RA International, commented:

"The Group's focus on stability and cash has delivered a strong and profitable result. The commitment by my colleagues, Board and shareholders has enabled the Group to regain its footing with a return to profitability and stability. We remain committed to delivering immediate results and lasting change giving customers the confidence that we are a company they can rely on who can do the job well and provide the right kind of support."

The information communicated in this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended.

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About RA International

RA International is a leading provider of services to remote locations. The Group offers its services through three channels: construction, integrated facilities management and supply chain, and services two main client groups: humanitarian and aid agencies and western government organisations focusing on overseas projects. It has a strong customer base, largely comprising UN agencies, UK and US government departments and global corporations.

The Group provides comprehensive, flexible, mission critical support to its clients enabling them to focus on the delivery of their respective businesses and services. Focusing on integrity and values alongside making on-going investment in its people, locations and operations has over time created a reliable and trusted brand within its sector.