Tekmar Group P. Regulatory News (TGP)

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

TEKMAR GROUP PLC

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

Trading Update for the 18-month period to 30 September 2021

Tekmar Group (AIM: TGP), a leading provider of technology and services for the global offshore energy markets, announces an update on trading for the extended 18-month financial period to 30 September 2021. 

Strategic update

The Group continues to make encouraging progress in delivering on the plans to support the strategic ambition to double organic revenue growth over the next five years, and to deliver a sustainable mid-to high teen EBITDA margin in the later years of the five-year plan. Recent highlights supporting our strategic execution include:

· contract award with Van Oord to supply Tekmar's Cable Protection System ("CPS") for the Baltic Eagle offshore wind farm in the Baltic Sea, Germany 

· partnership agreement with DeepWater Buoyancy announced in August 2021, which supports Tekmar's ambition for the global floating wind market and the US fixed offshore wind market

· contract award from EPC contractor to design, build and supply an Emergency Pipeline Repair System for a subsea project in Qatar

· contract award from EPC contractor to manufacture and supply concrete mattresses for a subsea project in the UK

· various contract awards in support of Offshore Wind Operations and Maintenance projects.

This activity has helped to support growth in the current enquiry book to £359 million, an increase of 31% on that reported on 1 June 2021 of £273 million, in addition to an increase in preferred bidder tenders from £4.5 million to £10.4 million in the same period.

Current trading

As has been widely experienced in many sectors, the dislocation to global trade flows has impacted Tekmar's operations including challenges with shipping goods for delivery, supply chain constraints and cost control pressures. These headwinds impacted Tekmar's financial performance, particularly through cost pressure and reduced volume, such that the Company expects to report revenue of £46 million and an adjusted EBITDA loss in the region of £1.2 million for the extended financial period to 30 September 2021. The Board expects the profitability from the size and nature of contract mix to improve in the current financial year to September 2022, albeit the financial impact of continued disruption to global trade remains harder to quantify at this time.

Financial position

Cash balance at the period end to 30 September 2021 was £3.5 million. The Group has extended its CBILs facility of £3.0 million for a further 12 months to October 2022 and has also worked with its relationship bank Barclays, together with UK Export Finance, to introduce an additional trade loan facility of £4.0 million, which is available at least to November 2022. This provides the Group with capacity to fund growth and the flexibility to support the working capital requirements typical in delivering the type of contracts that it undertakes in this industry.

Alasdair MacDonald, CEO of Tekmar Group said: "From a trading perspective the Company has not been immune from the dislocation to global trade flows and its impact on global economic activity. Whilst this has impacted our financial performance in the near term, our cash position is sound and we continue to be greatly encouraged with the operational progress we are making in delivering on our strategic goals and by the increase in enquiry book to £359 million, reflecting increased confidence in activity levels in our markets. 

We are securing landmark contracts with major global partners and this helps underscore our confidence in our customer-led growth strategy. We remain very energised about the opportunities we have ahead which is further reinforced by the recent pledge of £9.7 billion announced earlier this week at the Global Investment Summit in sectors including wind energy. The industry is at a major inflection point in terms of significant acceleration in offshore wind capacity investment. This combined with the broader energy transition aligned with the net zero by 2050 imperative and our initiatives to deepen and extend our capability across energy projects' life cycles provide clear drivers for sustained future growth."

Enquiries:

About Tekmar Group plc - www.tekmargroup.com

Tekmar Group plc's vision is to be the leading provider of technology and services for 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 Energy has been trusted to protect billions of Euros worth of assets in the offshore wind, oil & gas, wave, tidal and interconnector markets since 1985.

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.

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. AgileDat, a division of AgileTek, provides software development, cloud architecture and data analytics services.

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.

Pipeshield International is a market leading provider of specialised subsea protection solutions in the form of concrete mattresses used for the stabilisation and impact protection of subsea equipment in areas where they cannot be buried and further to limit the development of scour (seabed erosion) particularly local to that of a foundation, pipeline or in marine ports.

Tekmar Energy is headquartered in Newton Aycliffe in the United Kingdom; AgileTek operates from an office in London; Subsea Innovation has its head office and manufacturing centre in Darlington, United Kingdom. Ryder operates in Newcastle and within AgileTek London, Pipeshield headquarters are in Lowestoft with manufacturing in Montrose and Blyth. Tekmar Group plc also has strategic supply bases and representation across Europe, Africa, the Middle East and Asia Pacific.

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