REG - Tekmar Group PLC - Trading Update

TekmarAnnouncement

02/09/2025 07:00

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RNS Number : 5460X  Tekmar Group PLC  02 September 2025

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. Upon the publication of this announcement via a Regulatory Information
Service, this inside information is considered to be in the public domain.

Tekmar Group plc

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

 

Trading Update

 

Tekmar Group plc (AIM: TGP), a leading provider of asset protection technology
and offshore energy services globally, provides a trading update for the year
ending 30 September 2025 ("FY2025").

 

Current Trading and FY2025 Outlook

In the interim results announced on 26 June 2025, Tekmar highlighted the
increasing strength of its visible pipeline, with in excess of £50m of
projects scheduled for award in the second half of the calendar year to
December 2025. Subject to these anticipated awards being converted and the
timing of these awards, the Board expected "EBITDA generation to be improved
in the second half such that a reasonable expectation is for adjusted EBITDA
for FY2025 to be broadly consistent with FY2024."(1)

 

The bidding pipeline has remained strong in the second half of FY2025 and the
fourth quarter, in particular, has been strong for new awards. However, the
conversion to orders has been slower than anticipated with customers'
procurement decisions taking longer than expected. These delays have had a
corresponding impact on the expected financial outturn for the second half of
FY2025 with some forecasted revenue moving into FY2026. The Board continues to
expect improved revenue and EBITDA generation in the second half of the year,
albeit at a lower level than previously anticipated. Accordingly, the Board's
expectation is that the Group will achieve an adjusted EBITDA2 break-even
position for the full year. This represents a material improvement in second
half trading from the £0.7m EBITDA loss for the first half of the year with
higher margins being delivered.

 

Strategic Progress

Under the leadership of Richard Turner as CEO, who joined in September 2024,
the business has been aligned to deliver on Project Aurora - the Board's
medium-term value creation strategy to deliver true scale and record financial
performance for the Group. Successful execution of the plan will achieve a
fundamental change in the scale and mix of revenue and deliver significant
profitability gains driven by the benefit of operational gearing.

 

Despite short term trading challenges, Tekmar continues to make good progress
on the key initiatives within Project Aurora:

 * Increase order intake. This has been a primary objective for FY2025,
establishing the platform for sustained growth in FY2026 and beyond. The
healthy current pipeline and order intake in Q42025 supports an anticipated
strong starting backlog for FY2026, with these projects well balanced between
sectors and geography. Tekmar has also strengthened and realigned its Sales
organisation within 2025 in order to increase collaboration with customers,
and providing them with efficient access to the full breadth of the Group's
asset protection technology and offshore energy services. The focus remains on
Tekmar outperforming an improving market with continued long-term growth
forecast across all sectors.

 * Maintain tight control over cash. FY2025 run-rate capex is expected to be less
than £0.5m. There has also been significant progress over the last 12 months
in improving the Company's aged debt position, including the agreed payment
plan for £2.1m of China aged debt, with £0.6m received in June 2025.

 * Launch new business verticals. Tekmar is now organised across two verticals -
Asset Protection Technology and Offshore Energy Services. This creates a
leaner cost base with greater level of operational efficiency.

 * Grow offshore Energy Services division. This vertical is achieving a
materially higher sales run-rate in FY2025 than in FY2024, consistent with the
mid-term objective to scale this division to 25% of Group revenue (from 6% in
FY2024).

 * Resolve legacy warranty claims. Commercial settlement agreements have been
announced this year with two customers.  Both with no admission of liability
and no conclusion of defect with the Company's products and were fully covered
by the insurance monies already received by Tekmar with nil cash impact for
the Group.

 * Execute M&A. There is an active acquisition pipeline in place with
discussions ongoing with selected targets. The Board continues to adopt a
disciplined approach to assessing acquisition opportunities to ensure value
for shareholders.

Net debt3 as at 30 June 2025 was £2.6m and the Group's existing loan
facilities provide adequate cash resources to support the Group's working
capital requirements and the repayment of the CBILs loan which is due on 31
October 2025. In addition, the Group holds the former Subsea Innovation
Limited freehold premises as an asset held for sale with a book value of
£2.8m.

Richard Turner, CEO of Tekmar Group, commented:

"We continue to see strength in our inquiry pipeline, which supports a very
healthy near-term bidding pipeline for the remainder of 2025 and into 2026. As
we flagged with our interim results, the outturn for the current financial
year was predicated on the timing of securing significant tender
opportunities. Whilst the timing of these awards has been pushed out,
impacting the current financial year, the shape of the near-term pipeline
remains encouraging and supports our efforts to build a sustainably stronger
backlog for FY2026 and beyond. FY2025 has been a transitionary year for the
business - a year where we started with a below par pipeline of opportunities
and a business that had significant free capacity; and a year where we have
aligned the business to deliver our strategic plan - Project Aurora. We remain
confident we will translate the healthy pipeline into good quality orders,
addressing the underutilisation in the business, and building the platform for
sustained growth for 2026 and beyond."

 

 

Footnotes:

(1) Group Adjusted EBITDA for FY2024 was £1.7m.

(2) Adjusted EBITDA is a key metric used by Directors. Earnings before
interest, tax, depreciation and amortisation are adjusted for material items
of a one-off nature and significant items which allow comparable business
performance.

(3) Net debt is defined as total cash held by the Group less bank borrowings.

 

Enquiries:

 

 Tekmar Group plc                                              c/o Gracechurch Group
 Richard Turner, CEO

 Phil Lanigan, CFO

 Cavendish Capital Markets Limited (Nomad and Broker)          +44 (0)131 220 9772
 Peter Lynch

                                                             +44 (0)131 220 9771
 Neil McDonald

                                                             +44 (0)131 220 9775
 Pearl Kellie

 Gracechurch Group (Financial Media & Investor Relations)      +44 (0)20 4582 3500

 Murdo Montgomery

 Heather Armstrong

 

About Tekmar Group plc

 

Tekmar Group plc collaborates with its partners to deliver robust and
sustainable engineering led solutions that enable the world's energy
transition.

 

Through our Offshore Energy and Marine Civils Divisions we provide a range of
engineering services and technologies to support and protect offshore wind
farms and other offshore energy assets and marine infrastructure. With near 40
years of experience, we optimise and de-risk projects, solve customer's
engineering challenges, improve safety and lower project costs. Our
capabilities include geotechnical design and analysis, simulation and
engineering analysis, bespoke equipment design and build, subsea protection
technology and subsea stability technology.

 

We have a clear strategy focused on strengthening Tekmar's value proposition
as an engineering solutions-led business which offers integrated and
differentiated technology, services and products to our global customer base.

 

Headquartered in Newton Aycliffe, UK, Tekmar Group has an extensive global
reach with offices, manufacturing facilities, strategic supply partnerships
and representation in 18 locations across Europe, Africa, the Middle East,
Asia Pacific and North America.

 

For more information visit: www.tekmargroup.com (http://www.tekmargroup.com/)

Subscribe to further news from Tekmar Group at Group News
(https://investors.tekmar.co.uk/investors/rns-email-alerts/)

 

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