REG - Tekmar Group PLC - Unaudited Interim Results
26/06/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250626:nRSZ4658Oa&default-theme=true
RNS Number : 4658O Tekmar Group PLC 26 June 2025
TEKMAR GROUP PLC
("Tekmar Group", the "Group" or the "Company")
UNAUDITED INTERIM RESULTS
For the 6-month period ended 31 March 2025
Tekmar Group (AIM: TGP), a leading provider of technology and services for the
global offshore energy markets, announces its interim results for the 6-month
period ended 31 March 2025 ("HY25" or the "Period").
Headlines for the Period
· Revenue of £12.3m (HY24: £16.2m) at 29% gross margin and
adjusted EBITDA of £(0.7)m (HY24: £1.8m)
· Trading for the Period reflects the anticipated lower activity
levels in H1. As previously guided, profit delivery is expected to be weighted
towards the second half of FY25
· Order intake during the Period of £10m (HY24: £21m) at a
blended gross margin of 32%. Whilst awards were slower than anticipated,
effective cost control helped offset the impact of lower revenue
· The visible pipeline remains strong with in excess of £50m of
projects scheduled for award in the second half of this calendar year
· Net debt of £1.8m as at 31 March 2025 (£3.6m as at 31 March
2024). Ongoing disciplined cashflow management including agreed payment plan
to reduce aged debt in China with £0.6m received during June 2025
Solid progress made on key initiatives within Project Aurora - our strategic
plan to deliver true scale
· Organisational restructure and focus on costs have achieved over
£1m of annualised cost savings, representing an overhead reduction of 11%,
providing a leaner cost base for FY26 and opportunities to invest in growth
· Recent simplification of business and now reorganised across two
verticals: Asset Protection Technology and Offshore Energy Services
· Significant progress made in closing out legacy warranty claims
in relation to alleged CPS defects
· New talent acquired to support the front end of the business in
capturing growing market opportunities
· Annual review process of banking facilities concluded including
the renewal of the £4m trade loan facility. In addition, the Group has taken
out a 3-year £2m Growth Guarantee Scheme term loan, supported by the British
Business Bank
· Together with the trade loan facility, the Group will utilise
these facilities to support ongoing working capital and repay the CBILs loan
which is due for repayment on 31 October 2025
· The Board continues to actively assess and progress accretive
M&A opportunities
HY25 financials
6M ending Mar-25 6M ending Mar-24 12M ending
Unaudited Unaudited(5) Sep-24
£m £m Audited(5)
£m
Revenue 12.3 16.2 32.8
Gross Margin 29% 33% 32%
Adjusted EBITDA(1) (0.7) 1.8 1.7
Net Cash / (Debt) (2) (1.8) (3.6) (1.6)
Sales KPIs
6M ending Mar-25 6M ending Mar-24 12M ending
Unaudited Unaudited Sep-24
£m £m Unaudited
£m
Order Book(3) 12.6 21.9 16.4
Order Intake(4) 10.0 21.1 32.4
Richard Turner, CEO, commented: "We remain confident in the strength of our
bidding pipeline and expect H2 order intake to be strong, however the build of
order book has been slower than we anticipated. Whilst this impacted H1
activity levels it strengthens our visible pipeline for the remainder of the
calendar year.
We have performed very well operationally in the first half of this year with
excellent QHSE performance and On Time Delivery. We have also made solid
progress on our strategic plan - strengthening the business and building the
platform for sustained growth for 2026 and beyond - alongside maintaining a
tight control of cash and cost. However, we still have significant free
capacity, and our results reflect this underutilisation.
Our priorities for the second half of the year are to drive the business to
meet our financial commitments for FY25 and win good quality orders that lead
to a strong starting backlog for FY26. We continue to engage with potential
acquisition targets and will remain disciplined in our approach as we execute
on our strategy to deliver true scale and diversification for Tekmar and value
for shareholders."
Notes:
(1) Adjusted EBITDA is a key metric used by the 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. Details of the adjustments can be found in the adjusted EBITDA
section below. Adjusted EBITDA might not be comparable to other companies.
(2) Net cash is defined as total cash held by the Group less bank borrowings.
(3) Order Book is defined as signed and committed contracts with clients.
(4) Order Intake is the value of contracts awarded in the Period, regardless of
revenue timing.
(5) Figures for FY24 and HY24 exclude Subsea Innovation Limited due to divestment
in May 2024. These figures are treated as discontinued operation.
Enquiries:
Tekmar Group plc c/o +44 (0)20 4582 3500
Richard Turner, CEO
Leanne Wilkinson, CFO
Cavendish (Nominated Adviser and Broker)
Peter Lynch / Neil McDonald / Pearl Kellie +44 (0)131 220 9771
Gracechurch PR (Financial media & investor relations) +44 (0)20 4582 3500
Murdo Montgomery / Heather Armstrong
About Tekmar Group plc
Tekmar Group plc (AIM:TGP) collaborates with its partners to deliver robust
and sustainable engineering led solutions that enable the world's energy
transition.
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, 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.co.uk
(http://www.tekmargroup.co.uk) .
Subscribe to further news from Tekmar Group at Group News
(https://investors.tekmar.co.uk/group-news/) .
INTERIM REPORT FOR THE 6 MONTHS TO 31 MARCH 2025
First half performance and full year outlook
The first half trading performance reflects our expectation for a stronger
weighting of profit delivery in the second half of FY25. In terms of our two
end markets, £8m of revenue was within the offshore wind market and £4m in
other offshore markets, in particular Oil & Gas. Revenues for the offshore
wind market in particular were lower than the prior year period, reflective of
timing of project awards as the sector recovers from its well-publicised
challenges. Offshore energy markets have now hit an inflection point and
demand is starting to increase as expected in the second half of 2025 and is
expected to continue to increase into 2026. During the period we remained
disciplined in our commercial approach and maintained tight controls on
overhead costs and cash as we position the business to capture the growing
momentum in our markets.
Looking ahead to the rest of the financial year, the addressable order volume
and value across our markets is significant with a visible pipeline of over
£400m, of which in excess of £50m of projects are scheduled for award in the
second half of this calendar year. We have a number of significant tender
opportunities across all revenue lines as well as a material volume of "in and
out" work. Whilst the timing of these awards can be subject to change, the
shape of the pipeline supports our dual objective of delivering on our
financial commitments for the current financial year whilst building a strong
backlog for FY26. Accordingly, subject to these anticipated awards, the
Board expects EBITDA generation to be improved in the second half such that a
reasonable expectation is for adjusted EBITDA for FY25 to be broadly
consistent with FY24.
Order Intake
We have secured a number of important contract wins since the start of the
calendar year which highlight the differentiated technology we offer to the
market:
• A high profile UK offshore wind contract award with a total value
in the region of £5 million for a UK-based offshore wind farm project.
• A contract to provide grouting services for the Inch Cape Offshore
Wind Farm, located off the east coast of Scotland, reinforcing our strategic
focus on expanding our presence in this critical service area.
• A three-year framework agreement with Nexans S.A. to provide a
wide scope of critical engineering support to Nexans' offshore wind projects
worldwide, including cable burial risk assessments, installation analysis and
specialist subsea engineering consultancy.
Being able to deliver this breadth of protection technology and complementary
services sets us apart in the market and puts us ahead of the competition in
being able to support the full lifecycle of offshore energy projects.
Update on Project Aurora - our strategic plan to deliver true scale
In December 2024, we communicated to the market a summary of our 3-5 year
strategic plan - "Project Aurora". The plan is rooted in driving significant
organic growth across the Group's existing portfolio of products and services,
along with complementary M&A. This addresses the importance of Tekmar
achieving greater scale and in doing so benefiting from significant
profitability gains through operational gearing.
Since our last results update to the market, we have made progress in a number
of areas that help to strengthen our growth platform:
(i) Implemented a simplified business structure and
reorganisation aligned with Project Aurora
Reflecting the core capabilities of the Tekmar Group today we are refocusing
the business across two scalable value streams:
Asset Protection Technology: this includes our end-to-end engineering and
analysis capability, from feasibility, through to installation, commissioning
and operations, augmented with our advanced technology in polyurethane and
concrete protection systems. These capabilities have been the primary profit
generators for Tekmar historically and we expect this revenue stream to
continue to grow as we deliver the organic growth potential of the Group under
Project Aurora.
Offshore Energy Services: this includes our grouting and equipment rental
services, where we have an established fleet of assets which delivered revenue
of £1.5m in FY24. Demand for these services is strong, and we have increased
our asset base, which is ultimately expected to support circa £6m annual run
rate revenue going forward. Our intention is to continue to invest in further
capability and to broaden our range of services which will enhance the Group's
blended margin and strengthen cash flow.
We will increasingly align our resources with these revenue streams to drive
order intake and deliver revenue. Our M&A roadmap is also aligned and
complementary to this structure.
We are embedding this structure organisationally to drive growth across these
revenue streams and in this respect we are reviewing our basis of segmental
reporting with a plan to align for FY25 results.
(ii) Strengthening the platform - growth financing
Post the period-end we have renewed the £4m trade loan facility with Barclays
and put in place a new £2m 3-year term loan with the British Business Bank.
Together with the trade loan facility, the Group will utilise these facilities
to support ongoing working capital and repay the CBILs loan which is due for
repayment on 31 October 2025. We are in discussions to establish our first
asset backed lending facility with the proceeds to be used in acquiring
additional grouting equipment with an attractive payback period of less than 2
years on investment. This builds on our recent growth in this area and the
increased asset base will be used to drive growth across both offshore wind
and oil and gas markets and supports our planned expansion into other regions,
particularly Europe. This investment in our grouting asset base supports our
strategic objective to increase services revenues and strengthen Group
margins.
(iii) Good progress in relation to warranty claims regarding
alleged CPS defects
Tekmar has continued its commitment in working with relevant installers and
operators to investigate further, the root cause of ongoing legacy defect
notifications relating to the industry-wide issue regarding abrasion of legacy
cable protection systems installed at offshore windfarms. This has been
undertaken without prejudice and on the basis that Tekmar has consistently
denied any responsibility for these issues. The Root Cause Analysis (RCA)
investigations have not concluded that Tekmar products are defective.
As covered in our FY24 Annual Report, Tekmar has been working in collaboration
with the two relevant customers, to explore the insurance available for such
matters notwithstanding Tekmar's position regarding responsibility and
liability. The Group has negotiated a commercial settlement with its Extended
Product Liability (EXPL) insurance provider of £5.2m in relation to the
relevant claims. These insurance proceeds are available for use at the
discretion of the Group in settlement of the relevant claims, with any unused
cash repayable to the insurer.
In March 2025, we announced we had reached a commercial settlement with one of
the customers relating to one of the ongoing legacy defect notifications. The
balance of the settlement agreement was fully covered by the insurance monies
already received by the Company with nil cash impact on the Company. The
settlement does not impact the Company's ongoing commercial relationships in
the industry. Commercial discussions are ongoing regarding resolution of the
remaining disputes related to the legacy defect notifications.
(iv) M&A - engagement with selected targets is ongoing
The organic growth plan is complemented by the Group's M&A strategy to
deliver additional scale and diversification. This plan is supported by the
£18m of funding available, subject to conditions including SCF Investment
Committee approval, through the SCF convertible loan note instrument and the
relevant experience and relationships across the Board and the broader
business.
Accelerating the level of EBITDA and cash generation of the Group is key in
our assessment of opportunities as we look to build scale, strengthen the
technology and services we offer customers, and expand our reach in targeted
geographies. A robust acquisition pipeline has been developed, and the Board
is actively engaged with accretive acquisition targets. We continue to adopt a
disciplined approach to assessing value in order to bring affordable scale to
the group.
(v) A continued focus on costs and cash
Cash collection continues to be a key priority and good progress has been made
with regards to £2.1m of overdue debt in China, where a payment plan has
recently been formally agreed. Approximately £0.6m has been received in
June 2025 with the remainder anticipated over the remaining calendar year.
Additionally, during the financial year, we have managed costs prudently and
delivered over £1m of annualised cost savings. This has been achieved
primarily through the management of headcount and other areas such as IT and
equates to an 11% reduction in overhead. These savings provide a leaner cost
base to go into FY26 and some headroom to offset general inflationary
increases and for targeted investment in our sales capability.
We continue to maintain tight controls on managing the cash requirements of
the business to support growth and working capital, including disciplined
capex and targeted investment in products and services that represent the
greatest opportunity for near-term growth. Capex for the current financial
year is expected to be in the region of £0.5m, excluding any additional asset
financed grouting investment.
Increasingly Favourable Markets Support Sustained Demand for Tekmar's
Technology((1))
The key indicators across offshore energy markets are consistent with an
improving market environment.
In offshore wind, there is now a higher volume of projects being sanctioned
than ever before as the market moves into recovery and builds momentum after
the challenges of recent years. The lead indicators support this improving
trajectory - 2023 and 2024 combined saw a record-high Final Investment
Decision ("FID") of 19.4GW, reversing the pause in 2022 when 0.8GW of offshore
wind capacity was consented((1)). Linked to this, industry analysts forecast
1,000 turbines per year will be installed through 2028, increasing to 2,000 by
2030((2)). Demand is expanding globally, with Europe remaining the anchor
growth market, particularly the UK ((3)). In addition, turbine OEMs are
reporting improved financial performance ((4)) and cable manufacturers are
reporting stronger backlogs ((5)). Activity levels across the oil and gas
industry highlight the continued high and sustained levels of CAPEX and OPEX,
with this investment increasingly recognised as essential to support energy
transition ((5)). These factors in turn indicate supply chain capacity will be
stretched and supports sustained demand for Tekmar's technology and
engineering services.
Richard Turner
Chief Executive Officer
26 June 2025
Sources:
(1) 4C Offshore, Offshore Wind Farms Project Opportunity Pipeline Database,
Version Q1 2025
(2) GWEC, "Strong 2023 offshore wind growth as industry sets course for
record-breaking decade" Article
(3) Julius Baer, "Offshore wind: growth outlook across different parts of the
world" Article
(4) offshoreWIND.biz: Vestas: "We Returned to Profitability"
(5) Offshore-Mag, "Shortage of submarine power cables poses threat to offshore
wind market" Article
Group financial performance
Overview
The Group reported revenue of £12.3 million for the 6-month period ended
March 2025, representing a decrease of £3.9 million compared to the £16.2
million reported for the 6-month period to 31 March 2024. This was due to
lower demand within offshore wind and aggressive pricing pressure in one
region relating to the supply of concrete products. £8.1 million of revenue
was generated within the offshore wind market and £4.2million in other
offshore markets, in particular Oil & Gas. Gross margin on the revenue
delivered in the half year was 29%. Whilst revenues are down on the prior year
comparators, demand is starting to increase in line with the improving
environment across offshore energy markets.
6M ending 6M ending Mar-24 12M ending
Mar-25 Unaudited Sep-24
Unaudited £m Audited
£m £m
Revenue 12.3 16.2 32.8
Gross Profit 3.5 5.4 10.5
Adjusted EBITDA((1)) (0.7) 1.8 1.7
(LBT) from continuing operations (2.7) (0.4) (4.5)
EPS from continuing operations (1.93p) (0.26p) 0.23
Adjusted EPS((2)(3)) from continuing operations (1.50p) (3.74p) (1.00p)
Subsea Innovation Limited was divested in May-24 and therefore figures for
FY24 and HY24 exclude Subsea Innovation Limited. The figures are treated as
treated as discontinued operation.
(1) Adjusted EBITDA is a key metric used by the 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. Details of the adjustments can be found in the adjusted EBITDA
section below. Adjusted EBITDA might not be comparable to other companies.
(2) Adjusted EPS is a key metric used by the Directors and measures earnings
after adjusting for material items of a one-off nature and significant items
which allow comparable business performance.
(3) Earnings for EPS calculation are adjusted for exceptional items as shown
in note 5 below.
Asset Protection Technology
Demand for our cable protection technology and engineering services has been
lower the last year in both Offshore Wind and Oil & Gas. In wind this
slowdown is symptomatic of the challenges created by increased interest rates
and material price inflation in parallel with lower strike prices that
stretched project economics and significantly delayed approvals. These
macro-economic effects have progressively been overcome, and the industry is
regaining momentum. This is demonstrated by record levels of Final Investment
Decisions (FIDs) in 2023/24, a robust indication of sustainably increasing
demand moving towards us and the wider supply chain. This anticipated
resurgence is further reflected by our inquiry pipeline that has increased
considerably over the last year with some significant awards expected this
summer for deliver in 2026 and beyond.
Our concrete stabilisation and protection technology is used globally in all
segments of offshore energy. Our primary geographical market within Oil &
Gas is the Middle East. Pricing has been particularly aggressive in this
region and we elected not to take on some large contracts with unfavourable
cash flows. As part of our operational excellence programme under the Project
Aurora strategic framework, we have identified opportunities for greater
supply chain efficiencies which will ensure we can compete effectively in the
Middle East market. We have also strengthened our sales resource effectiveness
through replacement hires and re-organisation, and the identified broader
opportunities to focus our concrete products on more value-add projects.
Furthermore, market dynamics are now shifting towards a surplus of aggregated
demand from Oil & Gas and Marine Civils port infrastructure.
Offshore Energy Services
Since our initial investment into offshore grouting assets in 2022, we have
been successful in both winning and executing projects and have established a
strong track record supported by excellent customer feedback. In FY24 we
delivered £1.5m of revenue from grouting services. These assets have a proven
strong return on investment and a positive growth outlook supported by
industry demand across all of our end markets. Towards the end of FY24 we
added two further units to the fleet giving us a capability to ultimately
generate revenue of c.£6m per year. During FY25 to date we have secured
revenue of £1.8m and have an active pipeline of opportunities of c.£5m for
grouting projects that will be executed in the remainder of FY25 and into
FY26. Similarly, our equipment rental services have been in high demand, in
particular our bespoke lifting and deployment frames. In HY25 these assets
delivered a gross margin in excess of 90%.
Results are analysed below by market, and it is planned that FY25 segmental
reporting will align to our key revenue streams and growth plan as detailed
above.
Revenue
Revenue by market
£m 6M 6M 12M
Mar25 Mar24 Sep24
Offshore Wind 8.1 11.3 17.1
Other Offshore 4.2 4.9 15.7
Total 12.3 16.2 32.8
Blended gross profit margin for the Group was 29% for the 6-month period.
Gross profit margin in Offshore Wind was 25% in HY25. This was impacted by a
remaining lower margin legacy project which were completed in the period,
therefore gross profit margin for this division for the full year is expected
to progressively improve. Projects within the Other Offshore market,
including Oil & Gas and Marine Civils infrastructure, delivered a strong
gross profit margin of 35%, reflecting solid commercial performance during the
period.
Gross Margin
Gross Profit by market
£m 6M 6M 12M
Mar25 Mar24 Sep24
Offshore Wind 2.0 2.9 5.5
Other Offshore 1.5 3.7 6.0
Unallocated costs - (1.2) (1.0)
Total 3.5 5.4 10.5
Unallocated costs in the 6-months to Mar 24 and 12-months to Sep 24 related to
manufacturing facility production costs which are absorbed within each market
segment gross margin for the 6-months to Mar 25.
Operating expenses
The cost base continues to be carefully managed and cost-saving measures have
been implemented during the year to date which will take effect in the second
half of the year. This provides an annualised benefit of over £1m for FY26
and provides some flexibility for headcount investment and general
inflationary pressures.
Adjusted EBITDA
Adjusted EBITDA is a primary measure used by management to monitor and provide
a consistent measure of trading performance from one period to the next. The
adjustments to EBITDA remove material items of a one-off nature or of such
significance that they are considered relevant to the user of the financial
statements as it represents a useful measure that is reflective of the
comparable performance of the business. The Board reviews all exceptional
items to ensure resulting Adjusted EBITDA achieves this.
The £(0.7)m Adjusted EBITDA loss for the 6 months ended 31 March 2025 (HY24:
£1.8m) reflects a decrease of £2.5m as a result of the trading performance
described above.
The below table shows the adjustments that have been made to calculate
Adjusted EBITDA.
EBITDA Reconciliation (£m) 6 months 6 months 12 months Sep-24
Mar-25 Mar-24
Reported operating loss (2.3) (0.0) (3.8)
Amortisation of acquired intangible assets 0.0 0.1 0.1
Amortisation of other intangible assets 0.1 0.3 0.3
Depreciation on tangible assets 0.6 0.4 0.9
Depreciation on ROU assets 0.2 0.2 0.4
EBITDA (1.4) 1.0 (2.1)
Adjusted items:
Share Based Payments 0.1 - 0.2
Impairment of goodwill - - 1.5
Implementation of accounting system - - 0.2
Warranty legal costs 0.1 - 0.6
Expected credit loss - - 0.5
Foreign exchange losses & gains - 0.8 0.6
Restructuring costs 0.5 - 0.2
Adjusted EBITDA (0.7) 1.8 1.7
Subsea Innovation Limited was divested in May-24 and therefore figures for
FY24 and HY24 exclude Subsea Innovation Limited. The figures are treated as
treated as discontinued operation.
Profit
This figure includes £0.7m of one-off exceptional items, comprising £0.5m in
restructuring costs related to executive management changes, £0.1m
exceptional share-based payment charge and £0.1m in warranty costs.
On a statutory basis, the Group's loss before tax for the Period was £2.7m,
reflecting the trading performance outlined above.
Balance Sheet
£m Mar25 Mar24 Sep24
Fixed Assets 4.1 6.7 4.5
Intangible assets 16.6 18.9 16.8
Investment Property - - 2.8
Inventory 1.7 3.2 1.9
Trade & other receivables 14.2 15.1 20.3
Assets held for sale 2.8 5.0 -
Cash 3.9 2.7 4.6
Current Liabilities (16.6) (13.5) (20.9)
Liabilities held for sale - (2.8) -
Non-current liabilities (1.7) (1.4) (1.8)
Equity (25.1) (33.9) (28.2)
Fixed Assets
During the 6-month period to March 2025, we were disciplined in our approach
to capital expenditure and focused on investments which support near term
growth and returns. As a result, additions were £0.3m in the half-year to
March 2025, which mainly related to grouting silos and production moulds.
Intangible assets
Intangible assets include goodwill which was £15.8m at the balance sheet date
versus £15.8m at the end of FY24. The goodwill relates to the original
management buy-out of subsidiaries since 2011.
Inventory
Inventory on the balance sheet was £1.7m, a similar level to FY24. The
£1.5m reduction versus HY24 related to work-in-progress on two large Middle
Eastern projects.
Trade and other receivables
Trade and other receivables of £14.2m includes a trade receivables balance of
£5.7m and contract assets of £6.2m. Also, £1.2m cash was received to
March 2025 followed by a further £0.5m in May 2025, relating to deferred
consideration on the disposal of Subsea Innovation Ltd in May 2024.
Collections are well managed with particular focus around Middle East and
China debtors. Of the £2.1m aged debt with China, £0.6m has since been
received in June 2025. In addition, a £0.5m credit loss provision remains,
which was held against this debt at FY24 due to the duration of the debt.
The billed amounts are not in dispute and a further payment plan is in place
which would see the debt largely recovered in the calendar year.
Contract assets of £6.2m were £2.6m higher versus £3.6m at HY24. This
relates to accrued income on two large contracts scheduled to move to billed
debt in the following quarter.
Asset held for sale
The Group holds an investment property valued at £2.8m, which was retained
following the divestment of Subsea Innovation Ltd in May 2024. The property
is marketed for sale and therefore reported as an asset held for sale at HY25.
Assets and liabilities held for sale in HY24 relate to the divestment of
Subsea Innovation Limited, which completed in May 2024.
Cash
Cash balance at the period end to 31 March 2025 was £3.9m. This was offset by
bank borrowings of £5.8m resulting in net debt of £1.8m. The cash balance
included the residual £3.8m of insurance proceeds from the £5.2m received in
October 2024 relating to legacy defect notifications, following the £1.4m
commercial settlement reached with a particular customer in March 2025. Bank
borrowings of £5.8m included the £3.0m CBILs loan and £2.8m of the £4.0m
trade loan drawn.
Current liabilities
Current liabilities increased by £3.1m to £16.6m (HY24: £13.5m). Within
the £3.1m, £3.8m related to anticipated commercial settlement regarding
legacy warranty matters, as detailed in the FY24 annual accounts, offset by a
£0.6m reduction in trade loan borrowings which stood at £2.8m.
Bank Facilities
During the month of June 2025, banking facilities were renewed with Barclays
Bank. This comprises a renewal of the £4m 80% UK Export Finance backed
trade loan which remains a flexible facility available for ongoing working
capital.
In addition, the Group has taken out a £2.0m Growth Guarantee Scheme loan,
supported by the British Business Bank. The loan is a 3-year term loan which
will come into effect later this year prior to the repayment of the CBILs
loan, due for repayment by 31 Oct 2025.
Consistent with FY24 and as noted in the basis of preparation below in the
notes to the financial statements, due to the required annual renewal of our
banking facilities and the uncertain timing of contract awards, the Group has
disclosed a material uncertainty in relation to going concern. Management
remains confident that the relationship with Barclays, coupled with support
from UK Export Finance and the growth outlook for the Group's core revenue
markets, will ensure sufficient liquidity for the Group.
Other Non-current liabilities
Other Non-current liabilities of £1.7m (HY24: £1.4m) relate to lease
liabilities in relation to IFRS16, warranty provision and deferred tax
liability.
In summary, while we are not in control of the timing of contract awards, we
see evidence of a significant improvement in our end markets, which we expect
will benefit our order intake in the second half of the year and into FY26.
This, in turn, should lead to positive operational gearing effects for the
business.
We remain focused on managing the balance sheet to support our working capital
requirements and growth opportunities, and our facilities will continue to be
reviewed to ensure they are appropriately aligned with the business plan.
Leanne Wilkinson
Chief Financial Officer
26 June 2025
Consolidated statement of comprehensive income
for the 6M period ended 31 March 2025
6M 6M 12M
ended ended ended
Note 31 Mar 31 Mar 30 Sep 2024
2025 2024 Audited
Unaudited Unaudited
£000 £000 £000
Revenue 4 12,344 16,211 32,808
Cost of sales (8,802) (10,819) (22,291)
Gross profit 3,542 5,392 10,517
Administrative expenses (5,914) (5,413) (13,195)
Expected credit loss - - (520)
Warranty provision - - (656)
Total administrative expenses (5,914) (5,413) (14,371)
Other operating income 35 7 22
Group operating loss (2,337) (14) (3,832)
Analysed as:
Adjusted EBITDA( 1 ) (675) 1,776 1,715
Depreciation (765) (653) (1,277)
Amortisation (137) (336) (366)
Exceptional share based payments charges (83) - (160)
Impairment of goodwill - - (1,546)
Exceptional IT costs (43) - (169)
Financing (13) - -
Foreign exchange (losses)/gains - (801) (623)
Warranty provision (154) - (656)
Expected credit loss - - (520)
Restructuring costs (467) - (230)
Group operating loss (2,337) (14) (3,832)
Finance costs (328) (351) (727)
Finance income 15 7 19
Net finance costs (313) (344) (708)
Loss before taxation from continuing operations (2,650) (358) (4,540)
Taxation - - (557)
Loss for the period from continuing operations (2,650) (358) (5,097)
Discontinued operations - (386) (1,316)
Loss for the period (2,650) (744) (6,413)
Items which will not be classified subsequently to profit or loss
Revaluation of property - 71 75
Items which will be classified subsequently to profit or loss
Retranslation of overseas subsidiaries (553) (99) (333)
Total comprehensive income for the period (3,203) (772) (6,671)
Loss attributable to owners of the parent (2,650) (744) (6,413)
Total Comprehensive income attributable to owners of the parent (3,203) (772) (6,671)
Loss per share (pence) from continuing operations
Basic 5 (1.93) (0.26) (3.74)
Diluted 5 (1.93) (0.26) (3.74)
Loss per share (pence) from discontinuing operations
Basic 5 - (0.28) (0.97)
Diluted 5 - (0.28) (0.97)
1: Adjusted EBITDA, which is defined as profit before net finance costs, tax,
depreciation, amortisation, share based payments charge in relation to one-off
awards, material items of a one-off nature and significant items which allow
comparable business performance is a non-GAAP metric used by management and is
not an IFRS disclosure.
Consolidated balance sheet
as at 31 March 2025
31 Mar 31 Mar 30 Sep 2024
2025 2024 Audited
Note Unaudited Unaudited
£000 £000 £000
Non-current assets
Property, plant and equipment 4,081 6,670 4,514
Goodwill and other intangibles 6 16,586 18,923 16,708
Investment property - - 2,842
Total non-current assets 20,667 25,593 24,064
Current assets
Inventory 1,657 3,202 1,878
Trade and other receivables 7 14,200 15,134 20,336
Cash and cash equivalents 3,902 2,662 4,630
19,759 20,998 26,844
Assets held for sale 2,842 4,990 -
Total current assets 22,601 25,988 26,844
Total assets 43,268 51,581 50,908
Equity and liabilities
Share capital 1,373 1,360 1,373
Share premium 72,202 72,202 72,202
Merger relief reserve 744 1,738 744
Merger reserve (12,685) (12,685) (12,685)
Foreign currency translation reserve (994) (207) (441)
Retained losses (35,589) (28,527) (33,029)
Total equity 25,051 33,881 28,164
Non-current liabilities
Other interest-bearing loans and borrowings 8 760 719 924
Trade and other payables - - -
Deferred tax liability 235 686 234
Provisions 656 - 656
Total non-current liabilities 1,651 1,405 1,814
Current liabilities
Other interest-bearing loans and borrowings 8 6,198 6,616 6,554
Trade and other payables 5,914 6,661 8,503
Corporation tax payable 668 29 647
Provisions 9 3,786 210 5,226
16,566 13,516 20,930
Liabilities held for sale - 2,779 -
Total current liabilities 16,566 16,295 20,930
Total liabilities 18,217 17,700 22,744
Total equity and liabilities 43,268 51,581 50,908
Consolidated statement of changes in equity
for the 6M period ended 31 March 2025
Share Share premium Merger Merger reserve Foreign currency translation reserve Retained earnings Total equity attributable to owners of the parent Total
capital relief equity
reserve
£000 £000 £000 £000 £000 £000 £000 £000
Balance at 1 October 2023 1,360 72,202 1,738 (12,685) (108) (27,854) 34,653 34,653
(Loss) for the Period - - - - - (744) (744) (744)
Revaluation of property - - - - - 71 71 71
Exchange difference on translation of overseas subsidiary - - - - (99) - (99) (99)
Total comprehensive income for the year - - - - (99) (673) (772) (772)
Balance at 31 March 2024 1,360 72,202 1,738 (12,685) (207) (28,527) 33,881 33,881
(Loss) for the Period - - - - - (5,699) (5,699) (5,699)
Revaluation of property - - - - - 4 4 4
Exchange difference on translation of overseas subsidiary - - - - (234) - (234) (234)
Total comprehensive income for the year - - - - (234) (5,665) (5,899) (5,899)
Issue of shares 13 - - - - - 13 13
Share based payments - - - - - 169 169 169
Total transactions with owners, recognised 13 - - - - 169 182 182
directly in equity
Transfer following sale of subsidiary - - (994) - - 994 - -
Balance at 30 September 2024 1,373 72,202 744 (12,685) (441) (33,029) 28,164 28,164
(Loss) for the Period - - - - - (2,650) (2,650) (2,650)
Exchange difference on translation of overseas subsidiary - - - - (553) - (553) (553)
Total comprehensive income for the year - - - - (553) (2,650) (3,203) (3,203)
Share based payments - - - - - 90 90 90
Total transactions with owners, recognised - - - - - 90 90 90
directly in equity
Balance at 31 March 2025 1,373 72,202 744 (12,685) (994) (35,589) 25,051 25,051
Consolidated cash flow statement
for the 6M period ended 31 March 2025
6M ended 6M ended 12M ended
31 March 2025 31 March 2024 30 Sep 2024
Unaudited Unaudited Audited
£000 £000 £000
Cash flows from operating activities
Loss before taxation (2,650) (744) (5,856)
Adjustments for:
Depreciation 765 653 1,365
Amortisation of intangible assets 137 336 483
Profit on disposal of fixed assets - - 41
Loss on disposal of subsidiary - - 1,316
Share based payments charge 90 - 193
Impairment of goodwill - - 1,546
Unrealised foreign losses / (gains) 148 - (276)
Finance costs 328 351 727
Finance income (15) (7) (19)
(1,197) 589 (480)
Changes in working capital:
(Increase) / decrease in inventories 221 (1,075) 82
Decrease / (increase) in trade and other receivables 4,788 277 (2,533)
(Decrease) / increase in trade and other payables (2,589) (313) 790
(Decrease) / increase in provisions (1,440) (255) 5,439
Cash (used) / generated from operations (217) (777) 3,298
Tax paid - (208) -
Net cash (outflow) / inflow from operating activities (217) (985) 3,298
Cash flows from investing activities
Purchase of property, plant and equipment (269) (426) (1,697)
Purchase of intangible assets (13) (62) (235)
Proceeds from sale of property, plant and equipment - - 71
Proceeds / (outflows) for sale of subsidiary 1,200 - (112)
Acquisition of subsidiary minority interest - (150) -
Interest received 15 7 19
Net cash inflow / (outflow) from investing activities 933 (631) (1,954)
Cash flows from financing activities
Facility drawdown 5,806 6,016 11,413
Facility repayment (6,238) (6,278) (11,805)
Repayment of borrowings under lease obligations (144) (265) (436)
Shares issued - - 13
Interest paid (328) (315) (795)
Net cash inflow outflow from financing activities (904) (842) (1,610)
Net (decrease) in cash and cash equivalents (188) (2,458) (266)
Cash and cash equivalents at beginning of year 4,630 5,219 5,219
(322)
Effect of foreign exchange rate changes (540) (99)
Cash and cash equivalents at end of year 3,902 2,662 4,630
Notes
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
Innovation House, Centurion Way, Darlington, DL3 0UP. 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 stability and
protection technology, including associated subsea engineering services,
operating across the global offshore energy markets, predominantly Offshore
Wind.
Forward looking statements
Certain statements in this interim report 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 those expressed or implied by these
forward-looking statements.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The Group's principal accounting policies have been applied consistently to
all of the periods presented, with the exception of the new standards applied
for the first time as set out in paragraph (c) below where applicable.
(a) Basis of preparation
The unaudited consolidated interim financial information has been prepared
under the historical cost convention and in accordance with the recognition
and measurement requirements of UK-adopted international accounting standards
("IFRS"). The condensed consolidated interim financial information does not
constitute financial statements within the meaning of Section 434 of the
Companies Act 2006 and does not include all of the information and disclosures
required for full annual financial statements. It should therefore be read in
conjunction with the Group's Annual Report for the period ended 30 September
2024, which has been prepared in accordance with IFRSs and is available on the
Group's investor website.
As permitted, this interim report has been prepared in accordance with the AIM
rules and not in accordance with IAS 34 "Interim financial reporting".
The accounting policies used in the financial information are consistent with
those used in the Group's consolidated financial statements as at and for the
period ended 30 September 2024, as detailed on pages 125 to 135 of the Group's
Annual Report and Financial Statements for the period ended 30 September 2024,
a copy of which is available on the Group's website, www.tekmargroup.com.
The comparative financial information contained in the condensed consolidated
financial information in respect of the period ended 30 September 2024 has
been extracted from the 2024 Financial Statements. Those financial statements
have been reported on by Grant Thornton UK LLP and delivered to the Registrar
of Companies. The report was unqualified and did not contain a statement under
Section 498(2) or 498(3) of the Companies Act 2006. The report did include a
reference to a material uncertainty in relation to going concern which the
auditor drew attention to by way of emphasis without qualifying their report.
Selected explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in financial position
and performance of the Group since the last annual consolidated financial
statements as at the period ended 30 September 2024.
The preparation of the condensed consolidated interim financial information
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expenses. Estimates and judgements are continually
evaluated and are based on historical experience and other factors, such as
expectations of future events and are believed to be reasonable under the
circumstances. Actual results may differ from these estimates. In preparing
the condensed consolidated interim financial information, the significant
judgements made by management in applying the Group's accounting policies and
the key sources of estimation uncertainty were the same as those applied to
the audited consolidated financial statements for the period ended 30
September 2024.
(b) Going concern
The Group meets its day-to-day working capital requirements through its
available banking facilities which includes a CBILs loan of £3.0m currently
available to 31 October 2025. The recent annual banking facility renewal
included the Group taking out a £2.0m Growth Guarantee scheme loan, backed by
the British Business Bank, over a term of 3 years. The funding from this
loan will be timed alongside the repayment of the CBILs loan later in the
year. The Group continue to have the £4.0m trade loan facility available
that can be drawn against supplier payments, currently available to at least
June 2026. The trade loan facility is provided with 80% support from UKEF
due to the nature of the business activities both in renewable energies and in
driving growth through export led opportunities. The Group held £3.9m of cash
on 31 March 2025 including draw down of the £3.0m CBILS loan and a further
£2.8m of the trade loan facility. There are no financial covenants that the
Group must adhere to in either of the bank facilities.
The Directors have prepared cash flow forecasts to 30 September 2026. The
base case forecasts include assumptions for annual revenue growth supported by
current order book, known tender pipeline, and by publicly available market
predictions for the sector. The forecasts also assume a retention of the costs
base of the business with increases of 5% on salaries and consistent gross
margin on contracts. These forecasts show that the Group is expected to have a
sufficient level of financial resources available to continue to operate on
the assumption that the trade loan facility is renewed and is available
alongside the amortising GGS loan. Within the base case model management have
modelled the outflow of cash of £3.8m in relation to note 9 Provisions within
the going concern period which is offset against the corresponding insurance
proceeds which were received in October 2024. Management have not modelled
anything in relation to the matter set out in note 9 Contingent Liabilities,
as management have assessed there to be no present obligation.
The Directors have sensitised their base case forecasts for a severe but
plausible downside impact. This sensitivity includes reducing revenue by 14%
(£8m equivalent) for the 16 month period to 30 September 2026, to model the
potential loss or delay of a certain level of contracts in the pipeline that
form the base case forecast. In addition, the possibility of delays to further
agreed planned receipts from China have been modelled. The base case and
sensitised forecast also include discretionary spend on capital outlay. The
Directors note there is further discretionary spend within their control which
could be cut, if necessary, although this has not been modelled in the
sensitised case given the headroom already available. These sensitivities
have been modelled to give the Directors comfort in adopting the going concern
basis of preparation for these interim financial statements.
Regarding banking facilities, both the base case and severe but plausible
scenario included the ongoing availability of the trade loan facility and
repayment of the CBILS loan timed alongside the new GGS 3-year term loan by
October 2025, in line with the facilities agreed with Barclays in June 2025.
The Directors are confident, based upon the communications with the team at
Barclays, supported by the outlook for the business that the trade loan
facility will be renewed in June 2026 and be available alongside the
amortising GGS loan.
Contract Award and timings - In the severe but plausible scenario, management
has adjusted the base case forecast to account for the potential downside
impact of order intake not being converted within the expected timescales.
This adjustment results in a 14% reduction in revenue over the going concern
period. This sensitised model shows that there is sufficient cash headroom to
continue to operate the business.
The Group operates on a contract basis and during the normal course of
business, contracts are expected to be executed within specific timeframes
during the forecast period. If the Group fails to secure a number of
significant contracts, in line with its forecasted timeframes, during a period
of lower cash reserves cash headroom would be breached. Management does not
consider this to be a likely outcome based on current backlog levels being
representative of prior periods coupled with a strong pipeline visibility,
opportunities at preferred supplier status and further anticipated contracts
awards within the required timescales. Such contract awards would provide
sufficient cash resources for the going concern period.
Both the required renewal of the trade loan facility and contract award timing
represent events or conditions which would indicate a material uncertainty
that may cast significant doubt on the Group's and the parent company's
ability to continue as a going concern.
The Directors are satisfied that, taking account of reasonably foreseeable
changes in trading performance and on the basis that the bank facilities
remain in place, these forecasts and projections show that the Group is
expected to have a sufficient level of financial resources available through
current facilities to continue in operational existence and meet its
liabilities as they fall due for at least the next 12 months from the date of
approval of the interim financial statements and for this reason they continue
to adopt the going concern basis in preparing the interim financial
statements.
(c) New standards, amendments and interpretations
The new standards, amendments or interpretations issued in the year, with
which the Group has to comply with, have not had a significant effect impact
on the Group. There are no standards endorsed but not yet effective that
will have a significant impact going forward.
(d) Basis of consolidation
Subsidiaries are all entities over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group and
are deconsolidated from the date control ceases. Inter-company transactions,
balances and unrealised gains and losses on transactions between Group
companies are eliminated.
(e) Revenue
Revenue arises from the supply of subsea protection solutions and associated
equipment, principally through fixed fee contracts. There were also technical
consultancy services delivered through subsea energy.
To determine how to recognise revenue in line with IFRS 15, the Group follows
a 5-step process as follows:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when / as performance obligation(s) are
satisfied
Revenue is measured at transaction price, stated net of VAT and other sales
related taxes.
Revenue is recognised either at a point in time, or over-time as the Group
satisfies performance obligations by transferring the promised services to its
customers as described below.
i) Fixed-fee contracted supply of subsea protection
solutions
For the majority of revenue transactions, the Group enters individual
contracts for the supply of subsea protection solutions, generally for a
specific project in a particular geographic location. Each contract generally
has one performance obligation, to supply subsea protection solutions. When
the contracts meet one or more of the criteria within step 5, including the
right to payment for the work completed, including profit should the customer
terminate, then revenue is recognised over time. If the criteria for
recognising revenue over time is not met, revenue is recognised at a point in
time, normally on the transfer of ownership of the goods to the customer.
For contracts where revenue is recognised over time, an assessment is made as
to the most accurate method to estimate stage of completion. This assessment
is performed on a contract-by-contract basis to ensure that revenue most
accurately represents the efforts incurred on a project. For the majority of
contracts this is on an inputs basis (costs incurred as a % of total forecast
costs).
There are also contracts which include the manufacture of a number of
separately identifiable products. In such circumstances, as the deliverables
are distinct, each deliverable is deemed to meet the definition of a
performance obligation in its own right and do not meet the definition under
IFRS of a series of distinct goods or services given how substantially
different each item is. Revenue for each item is stipulated in the contract
and revenue is recognised over time as one or more of the criteria for over
time recognition within IFRS 15 are met. Generally, for these items, an output
method of estimating stage of completion is used as this gives the most
accurate estimate of stage of completion. On certain contracts variation
orders are received as the scope of contract changes, these variation orders
are considered on a case-by-case basis to determine whether they form a
separate performance obligation in their own right or an addition to the
original performance obligation. The same revenue recognition criteria discuss
above is then applied to the variation order.
In all cases, any advance billings are deferred and recognised as the service
is delivered.
ii) Manufacture and distribution of ancillary
products, equipment.
The Group also receives a proportion of its revenue streams through the sale
of ancillary products and equipment. These individual sales are formed of
individual purchase orders for which goods are ordered or made using inventory
items. These items are recognised on a point in time basis, being the delivery
of the goods to the end customer.
iii) Provision of consultancy services
The entities within the offshore energy division also provide
consultancy-based services whereby engineering support is provided to
customers. These contracts meet one or more of the criteria within step 5,
including the right to payment for the work completed, including profit should
the customer terminate. Revenue is recognised over time on these contracts
using the inputs method.
Tekmar Group plc applies the IFRS 15 Practical expedient in respects of
determining the financing component of contract consideration: An entity need
not adjust the promised amount of consideration for the effects of a
significant financing component if the entity expects, at contract inception,
that the period between when the entity transfers a promised good or service
to a customer and when the customer pays for that good or service will be one
year or less.
Accounting for revenue is considered to be a key accounting judgement which is
further explained in note 3.
(f) EBITDA and Adjusted EBITDA
Earnings before Interest, Taxation, Depreciation and Amortisation ("EBITDA")
and Adjusted EBITDA are non-GAAP measures used by management to assess the
operating performance of the Group. EBITDA is defined as profit before net
finance costs, tax, depreciation and amortisation. Material items of a
one-off nature or of such significance they are considered relevant to the
user of the financial statements and share based payment charge in relation to
one-off awards are excluded.
The Directors primarily use the Adjusted EBITDA measure when making decisions
about the Group's activities. As these are non-GAAP measures, EBITDA and
Adjusted EBITDA measures used by other entities may not be calculated in the
same way and hence are not directly comparable.
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group financial statements under IFRS requires the
Directors to make estimates and assumptions that affect the reported amounts
of assets and liabilities. Estimates and judgements are continually evaluated
and are based on historical experience and other factors including
expectations of future events that are believed to be reasonable under the
circumstances. Actual results may differ from these estimates.
The Directors consider that the following estimates and judgements are likely
to have the most significant effect on the amounts recognised in the Group
financial statements.
(a) Critical judgements in applying the entity's accounting policies
Revenue recognition
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 method. Further details on how the policy is
applied can be found in note 2(e).
(b) Critical accounting estimates
Revenue recognition - stage of completion when recognising revenue overtime
Revenue on contracts is recognised based on the stage of completion of a
project, which, when using the input method, is measured as a proportion of
costs incurred out of total forecast costs. Forecast costs to complete each
project are therefore a key estimate in the financial statements and can be
inherently uncertain due to changes in market conditions. For the partially
complete projects in Tekmar Energy at year end if the percentage completion
was 1% different to management's estimate the revenue impact would be
£103,000. Within Pipeshield International there were a number of projects in
progress over the year end and a 1% movement in the estimate of completion
would impact revenue by £21,000. However, the likelihood of errors in
estimation is small, as the businesses have a history of reliable estimation
of costs to complete and given the nature of production, costs to complete
estimate are relatively simple.
Recoverability of contract assets and receivables
Management judges the recoverability at the balance sheet date and makes a
provision for impairment where appropriate. The resultant provision for
impairment represents management's best estimate of losses incurred in the
portfolio at the balance sheet date, assessed on the customer risk scoring and
commercial discussions. Further, management estimate the recoverability of any
accrued income balances relating to customer contracts. This estimate includes
an assessment of the probability of receipt, exposure to credit loss and the
value of any potential recovery. Management base this estimate using the most
recent and reliable information that can be reasonably obtained at any point
of review. The Group have recognised a credit loss provision in relation to a
specific historic aged trade receivable (See note 7).
Impairment of Non-Current assets
Management conducts annual impairment reviews of the Group's non-current
assets on the consolidated statement of financial position. This includes
goodwill annually, development costs where IAS 36 requires it, and other
assets as the appropriate standards prescribe. Any impairment review is
conducted using the Group's future growth targets regarding its key markets of
offshore energy and marine civils. Sensitivities are applied to the growth
assumptions to consider any potential long-term impact of current economic
conditions. Provision is made where the recoverable amount is less than the
current carrying value of the asset. Further details as to the estimation
uncertainty and the key assumptions are set out in note 6.
Provision for warranty costs and recognition of related insurance income
In accordance with IAS 37, the company recognises a provision when it has a
present obligation as a result of past events, it is probable that an outflow
of resources will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The estimation and
calculation of the value of provisions involves significant judgement,
particularly in determining the likelihood, cost and timing of warranty
related issues.
Additionally, the company may receive insurance receipts to cover certain
warranty claims. These receipts are recognised as an asset only when it is
virtually certain that reimbursement will be received if the company settles
the obligation. The timing and amount of such receipts can be uncertain,
requiring careful assessment and judgement to ensure accurate financial
reporting.
4. REVENUE AND SEGMENTAL REPORTING
Management has determined the operating segments based upon the information
provided to the executive Directors which is considered the chief operating
decision maker. The Group is managed and reports internally by business
division and markets.
Major customers
In the 6-month period ended 31 March 2025 there was one major customer within
the Marine Civils segment, and one major customer in the Offshore Energy
segment that individually accounted for at least 10% of total revenues (2024
6M: two customers). The revenues relating to these in the 6-month period to 31
March 2025 were £4,851,000 (2024 6M: £7,017,000). Included within this is
revenue from multiple projects with different entities within each customer.
Analysis of revenue by region 6M ending 6M ending 12M ending
31 Mar 2025 31 Mar 2024 30 Sep 2024
Unaudited Unaudited Audited
£000 £000 £000
UK & Ireland 2,287 2,018 5,836
Germany 1,264 82 439
Italy 12 101 101
Belgium 17 130 -
Netherlands 1,414 - -
Other Europe 106 161 413
China 72 21 665
USA & Canada 3,013 203 555
Japan 11 43 102
South Korea 314 539 828
Qatar 116 1,923 5,222
Taiwan 244 4,806 7,696
Egypt - 5 -
Malaysia 94 - -
UAE 221 334 2,695
KSA 2,626 4,892 4,674
Abu Dhabi 54 - 225
Africa - - 2,129
India 126 - 543
Other Middle East - - 40
Australia 134 - -
Guyana South America 106 - -
Africa 69 658 -
Rest of the World 44 295 645
12,344 16,211 32,808
Analysis of revenue by market Mar-25 Mar-24 Sep-24
Unaudited Unaudited Audited
£000 £000 £000
Offshore Wind 8,114 11,293 17,100
Other offshore 4,230 4,918 15,708
12,344 16,211 32,808
Analysis of revenue by product category Mar-25 Mar-24 Sep-24
Unaudited Unaudited Audited
£000 £000 £000
Offshore Energy protection systems & equipment 7,120 9,284 17,916
Marine Civils 4,486 6,375 13,688
Engineering consultancy services 738 552 1,204
12,344 16,211 32,808
Profit and cash are measured by division and the Board reviews this on the
following basis.
Offshore Marine Group/ Total
Energy Civils Eliminations Mar-25
Mar-25 Mar-25 Unaudited Unaudited
Unaudited Unaudited
£000 £000 £000 £000
Revenue 7,858 4,486 - 12,344
Gross profit 1,971 1,571 - 3,542
% Gross profit 25% 35% - 29%
Administrative expenses (2,695) (1,471) (1,748) (5,914)
Other operating income 1 - 34 35
Operating (loss)/ profit (723) 100 (1,714) (2,337)
Analysed as: (36) 433 (1,072) (675)
Adjusted EBITDA
Depreciation (424) (333) (8) (765)
Amortisation (109) - (28) (137)
Share based payments - - (83) (83)
Impairment of goodwill - - - -
Exceptional IT costs - - (43) (43)
Financing - - (13) (13)
Warranty costs (154) (154)
Restructuring costs - - (467) (467)
Operating (loss)/ profit (723) 100 (1,714) (2,337)
Finance income 15 - - 15
Finance costs (62) (8) (258) (328)
Tax - - - -
(Loss) / profit after tax on continuing operations (770) 92 (1,972) (2,650)
Offshore Marine Group/ Total
Energy Civils Eliminations Mar-25
Mar-25 Mar-25 Unaudited Unaudited
Unaudited Unaudited
£000 £000 £000 £000
Other information
Reportable segment assets 13,920 9,361 19,987 43,268
Reportable segment liabilities (9,690) (1,744) (6,783) (18,217)
Offshore Marine Group/ Total
Energy Civils Eliminations Mar-24
Mar-24 Mar-24 Unaudited Unaudited
Unaudited Unaudited
£000 £000 £000 £000
Revenue 9,836 6,375 - 16,211
Gross profit 2,889 2,503 - 5,392
% Gross profit 29% 39% - 33%
Administrative expenses (2,410) (1,876) (1,127) (5,413)
Other operating income - 1 6 7
Operating (loss)/ profit 479 628 (1,121) (14)
Analysed as: 1,358 1,467 (1,049) 1,776
Adjusted EBITDA
Depreciation (469) (178) (6) (653)
Amortisation (272) - (64) (336)
Foreign exchange losses (138) (661) (2) (801)
Operating (loss)/ profit 479 628 (1,121) (14)
Interest & similar expenses (25) - (319) (344)
Tax - - - -
(Loss) / profit after tax on continuing operations 454 628 (1,440) (358)
Offshore Marine Group/ Total
Energy Civils Eliminations Mar-24
Mar-24 Mar-24 Unaudited Unaudited
Unaudited Unaudited
£000 £000 £000 £000
Other information
Reportable segment assets 16,090 11,378 24,113 51,581
Reportable segment liabilities (6,498) (3,524) (7,678) (17,700)
Offshore Marine Group/ Total
Energy Civils Eliminations Sep-24
Sep-24 Sep-24 Audited Audited
Audited Audited
£000 £000 £000 £000
Revenue 19,465 13,343 - 32,808
Gross profit 5,724 4,793 - 10,517
% Gross profit 29% 36% - 32%
Administration expense (6,962) (3,078) (3,155) (13,195)
Warranty provision (656) - - (656)
Expected credit loss (520) - - (520)
Other operating income 1 9 12 22
Operating profit/(loss) (2,413) 1,724 (3,143) (3,832)
Analysed as: 1,702 2,582 (2,569) 1,715
Adjusted EBITDA
Depreciation (811) (454) (12) (1,277)
Amortisation (268) - (98) (366)
Share based payments (46) (6) (108) (160)
Impairment of goodwill (1,546) - - (1,546)
Exceptional IT costs (46) - (123) (169)
Foreign exchange losses (222) (398) (3) (623)
Warranty provision (656) - - (656)
Expected credit loss (520) - - (520)
Restructuring costs - - (230) (230)
Operating profit/(loss) (2,413) 1,724 (3,143) (3,832)
Finance income 18 1 - 19
Finance costs (74) (6) (647) (727)
Tax (496) (334) 273 (557)
(Loss) / profit after tax on continuing operations (2,965) 1,385 (3,517) (5,097)
Offshore Marine Group/ Total
Energy Civils Eliminations Sep-24
Sep-24 Sep-24 Audited Audited
Audited Audited
£000 £000 £000 £000
Other information
Reportable segment assets 17,119 11,405 22,384 50,908
Reportable segment liabilities (12,022) (3,673) (7,249) (22,944)
5. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the earnings attributable
to equity shareholders by the weighted average number of ordinary shares in
issue. Diluted earnings per share are calculated by including the impact of
all conditional share awards.
The calculation of basic and diluted profit per share is based on the
following data:
6M ending 6M ending 12M ending
31 March 2024 31 March 2024 30 Sep 2024
Unaudited Unaudited Audited
Earnings (£'000)
Earnings for the purposes of basic and diluted earnings per (2,650) (744) (6,413)
share being profit/(loss) for the year attributable to equity shareholders
Number of shares
Weighted average number of shares for the purposes of basic earnings per share 137,221,699 136,072,626 136,305,536
Weighted average dilutive effect of conditional share awards 3,975,795 7,720,039 8,281,261
Weighted average number of shares for the purposes of diluted earnings per 141,197,494 143,792,665 144,586,797
share
Basic per ordinary share (pence)
From continuing operations (1.93) (0.26) (3.74)
From discontinuing operations - (0.28) (0.97)
Diluted profit per ordinary share (pence)
From continuing operations (1.93) (0.26) (3.74)
From discontinuing operations - (0.28) (0.97)
Adjusted earnings per ordinary share (pence)*
From continuing operations (1.50) 0.23 (1.00)
From discontinuing operations - (0.29) (0.97)
The calculation of adjusted earnings per share is based on the following data:
Mar-24 Mar-24 Sep-24
Unaudited Unaudited Audited
£000 £000 £000
(Loss) for the period attributable to equity shareholders (2,650) (744) (6,413)
Add back:
Impairment of goodwill - - 1,546
Amortisation on acquired intangible assets 28 64 98
Exceptional share based payment 83 - 160
Staff restructuring 467 - 230
Exceptional IT costs 43 - 169
Financing 13 -
Warranty provision and legal fees 154 - 656
Foreign exchange losses - 787 -
Expected credit loss - - 520
Tax effect on above (190) (197) 351
Adjusted earnings (2,052) (90) (2,683)
*Adjusted earnings per share is calculated as profit for the period adjusted
for amortisation as a result of business combinations, exceptional items 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.
6. GOODWILL AND OTHER INTANGIBLES
Goodwill Software Product development Trade name Customer relationships Total
£000 £000 £000 £000 £000 £000
COST
As at 1 October 2023 26,292 294 3,503 1,289 1,870 33,248
Additions 150 - 41 - - 191
Discontinued operations - - (570) - - (570)
As at 31 March 2024 26,442 294 2,974 1,289 1,870 32,869
Additions - - 45 - - 45
Disposals - (272) (845) - - (1,117)
Discontinued operations (234) - - (738) (445) (1,417)
As at 30 September 2024 26,208 22 2,174 551 1,425 30,380
Additions - - 13 - - 13
As at 31 March 2025 26,208 22 2,187 551 1,425 30,393
AMORTISATION AND IMPAIRMENT
As at 1 October 2023 8,854 294 2,590 584 1,870 14,192
Charge for the period - - 248 64 - 312
Discontinued operations - - (558) - - (558)
As at 31 March 2024 8,854 294 2,280 648 1,870 13,946
Amortisation charge for the period - - 137 34 - 171
Disposals - (272) (844) - - (1,116)
Impairment charge 1,546 - - - - 1,546
Discontinued operations - - (18) (412) (445) (875)
As at 30 September 2024 10,400 22 1,555 270 1,425 13,672
Amortisation charge for the period - - 106 29 - 135
As at 31 March 2025 10,400 22 1,661 299 1,425 13,807
NET BOOK VALUE
As at 30 September 2032 17,438 - 913 705 - 19,056
As at 31 March 2024 17,588 - 693 642 - 18,923
As at 30 September 2024 15,808 - 619 281 - 16,708
As at 31 March 2025 15,808 - 526 252 - 16,586
The remaining amortisation periods for software and product development are 6
months to 48 months (2024: 6 months to 48 months).
Goodwill has been reviewed for impairment against the model used in the FY24
impairment review. There are no indicators which have identified a further
impairment and key assumptions are still considered to still be valid.
The method, key assumptions and results of the FY24 impairment review are
detailed below:
Goodwill is attributed to the Cash Generating Unit (CGU) being the division in
which the goodwill has arisen. The Group has 2 CGUs and the goodwill related
to each CGU as disclosed below.
Goodwill Mar-25 Mar-24
£000 £000
Offshore Energy Division 13,218 14,998
Marine Civils Division 2,590 2,590
Goodwill is allocated to two CGUs being Offshore Energy and Marine Civils.
Goodwill has been tested for impairment by assessing the value in use of the
cash generating unit. The value in use has been calculated using budgeted cash
flow projections for the next 5 years. The forecasts have been compiled at
individual CGU level with the first year modelled around the known contracts
which the entities have already secured or are in an advanced stage of
securing. A targeted revenue stream based on historic revenue run rates has
then been incorporated into the cashflows to model contracts that are as yet
unidentified that are likely be won and completed in the year. The forecasts
for years 2 to 5 are based on assumed Compound Annual Growth Rates (CAGR). The
CAGR applied across the 5-year period were 15.1% for the Offshore Energy CGU
and 10% for the Marine Civils CGU. Gross margin assumptions applied range from
the overall group margin for FY24 to a level in line with the margin reported
for the Marine Civils segment. The value in use calculation models an
increase in revenue for both CGU's of 2% into perpetuity after year 5.
The cashflow forecasts assume growth in revenue and a corresponding increase
in gross margin levels across the Group to bring the overall group margin
broadly in line with the margin reported for the Marine Civils segment. 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.
In addition to growth in revenue and profitability, the key assumptions used
in the impairment testing were as follows:
· A post tax discount rate of 14.3 % Weighted Average Cost of
Capital (WACC) estimated using a weighted average cost of capital adjusted to
reflect current market assessment of the time value of money and the risks
specific to the Group
· Terminal growth rate percentage of 2%
The discount rate used to test the cash generating units was the Group's
post-tax WACC of 14.3%. The goodwill impairment review has been tested
against a reduction in free cashflows. The Group considers free cashflows to
be EBITDA less any required capital expenditure and tax.
Marine Civils
The value in use calculations performed for the impairment review, together
with sensitivity analysis using reasonable assumptions, indicate sufficient
headroom for the remaining goodwill carrying value in the Marine Civils CGU.
Offshore Energy
The value in use calculations performed for the impairment review, together
with sensitivity analysis using reasonable assumptions, indicate sufficient
headroom for the remaining goodwill carrying value in the Offshore Energy CGU.
7. TRADE AND OTHER RECEIVABLES
Mar-25 Mar-24 Sep-24
Unaudited Unaudited Audited
£000 £000 £000
Amounts falling due within one year:
Trade receivables not past due 720 1,639 3,978
Trade receivables past due (1-30 days) 1,900 1,710 1,517
Trade receivables past due (over 30 days) 3,440 6,303 2,744
Trade receivables not yet due (retentions) 180 346 259
Expected credit loss (520) - (520)
Trade receivables net 5,720 9,998 7,978
Contract assets 6,154 2,858 3,590
Other receivables 498 879 637
Warranty insurance debtor - - 5,165
Prepayments 1,158 1,010 977
Deferred consideration on sale of subsidiary 571 - 1,742
Derivative asset 99 - 247
Deferred tax asset - 389 -
14,200 15,134 20,336
Trade and other receivables are all current and any fair value difference is
not material. Trade receivables are assessed by management for credit risk and
are considered past due when a counterparty has failed to make a payment when
that payment was contractually due. Management assesses trade receivables that
are past the contracted due date by up to 30 days and by over 30 days.
The carrying amounts of the Group's trade and other receivables are all
denominated in GBP, USD, EUR and RMB.
The Group assesses on a forward-looking basis the expected credit losses (ECL)
associated with its financial assets. The Group has the following types of
financial assets that are subject to the expected credit loss model:
· Trade receivables arising from sale of goods and provision of
consultancy services
· Contract assets relating to the sale of goods and provision of
consultancy services
The Group recognises a loss allowance for such losses at each reporting date.
The measurement of ECL reflects:
1. An unbiased and probability-weighted amount that is determined by
evaluating a range of possible outcomes.
2. The time value of money.
3. Reasonable and supportable information that is available without
undue cost or effort at the reporting date about past events, current
conditions, and forecasts of future economic conditions.
Methodology
The Group applies the simplified approach permitted by IFRS 9, which requires
expected lifetime losses to be recognised from initial recognition of the
receivables. The Group uses a provision matrix to calculate ECLs for trade
receivables. The provision rates are based on days past due for Groupings of
various customer segments that have similar loss patterns by geographical
region and product type. The expected loss rates are based on the payment
profiles of sales over a period of 5 years before 31 March 2025.
To measure the expected credit losses, trade receivables and contract assets
have been grouped based on shared credit risk characteristics and the days
past due. The contract assets relate to unbilled work in progress and have
substantially the same risk characteristics as the trade receivables for the
same types of contract. The Group has therefore concluded that the expected
loss rates for trade receivables are a reasonable approximation of the loss
rates for the contract assets.
Key Assumptions
The key assumptions used in estimating ECL are as follows:
- Historical credit loss experience.
- Adjustments for forward-looking information such as economic
forecasts and industry trends.
- The impact of macroeconomic factors on the creditworthiness of
customers.
On that basis, the loss allowance as at 31 March 2025 and 30 September 2024
was determined as follows for both trade receivables and contract assets:
31 Mar 25 - £'000 Not yet due < 3 Months past due 3m - 12m past due > 12m past due
Expected loss rate 0% 0% 0% 25%
Carrying amount - Trade receivables 900 3,257 - 2,083
Carrying amount - Contract assets 6,154 - - -
Loss Allowance Nil Nil Nil 520
Historically the Group has recovered 100% of receivable balances and no credit
losses have previously been accounted for. The Group continues to operate in
global markets where payment practices surrounding large contracts can be
different to those within Europe. The flow of funds on large capital projects
within China tend to move only when the windfarm developer approves the
completion of the project.
The Group has a number of trade receivable balances, within its subsidiary
based in China, which have been past due for more than 1 year. At 31 March
2025 the value of these overdue trade receivables was £2.0m, of a total
outstanding trade receivable balance for the entity of £2.1m. These amounts
remain outstanding at the approval of the half year results announcement. The
Group made an expected credit loss provision in relation to the outstanding
balances due to its Subsidiary within China. The provision is calculated on
the weighted probabilities of the potential range of outcomes in relation to
the outstanding balance.
All other receivables are considered to be 100% recoverable on the basis that
previous trading history sets a precedent that these balances will be
received.
Trade receivables and contract assets are written off where there is no
reasonable expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure of a customer to
engage in a repayment discussion with the Group.
Impairment losses on trade receivables and contract assets are presented as
net impairment losses within operating profit. Subsequent recoveries of
amounts previously written off are credited against the same line item.
Reconciliation of Loss Allowance
The movement in the allowance for credit losses during the year was as
follows:
£'000 31 Mar 30 Sep
2025 2024
Opening balance 520 -
Increase in loss allowance - 520
Closing Balance 520 520
8. BORROWINGS
Mar-25 Mar-24 Sep-24
Unaudited Unaudited Audited
£000 £000 £000
Current
Trade Loan Facility 2,751 3,313 3,183
Lease liability 447 303 371
CBILs Bank Loan 3,000 3,000 3,000
6,198 6,616 6,554
Non-current
Lease liability 760 719 924
760 719 924
Mar-24 Mar-24 Sep-24
Unaudited Unaudited Audited
£000 £000 £000
Amounts repayable
Within one year 6,197 6,616 6,554
In more than one year but less than two years 353 257 344
In more than two years but less than three years 300 256 351
In more than three years but less than four years 107 206 175
In more than four years but less than five years 1 - 54
6,958 7,335 7,478
Mar-25 Mar-24 Sep-24
Unaudited Unaudited Audited
£000 £000 £000
Average interest rates at the balance sheet dates
Lease liability 6.62 5.60 5.92
Trade Loan Facility 7.50 7.50 7.19
CBILS Bank Loan 7.50 7.50 7.50
The CBILS Bank Loan is due for repayment by 31 October 2025, with an approved
£2.0m Growth Guarantee Scheme Loan being taken out before this date. The
trade Loan Facility is renewed to at least Jun 2026, as described in note 2b.
Lease liability
This represents the lease liability recognised under IFRS 16. The assets
leased are shown as a right of use asset within Tangible Fixed Assets and
relate to the buildings from which the Group operates, along with leased items
of equipment and computer software.
The asset and liability have been calculated using a discount rate between
3.25% and 7.25% based on the inception date of the lease.
These leases are due to expire between June 2025 and June 2029.
9. PROVISIONS AND CONTINGENT LIABILITIES
Provisions are split between current and non-current. The carrying amounts and
the movements in the provision account are as follows:
Onerous contracts Warranty provision Total
£000 £000 £000
Carrying amount at 1 October 2023 - - -
Additional provision 465 - 465
Amounts utilised - - -
Reversals (255) (255)
Carrying amount at 31 March 2024 210 - 210
Carrying amount at 1 April 2024 210 - 210
Additional provision - 5,821 5,821
Amounts utilised (149) - (149)
Reversals - -
Carrying amount at 30 September 2024 61 5,821 5,882
Carrying amount at 1 April 2024 61 5,821 5,882
Additional provision - - -
Amounts utilised (49) (1,391) (1,440)
Reversals - -
Carrying amount at 30 September 2024 12 4,430 4,442
£3.8m of the warranty provision has been included as current liability as
outflow of economic resources is expected within one year. The remaining
provision (£0.7m) is expected to be paid in a period of greater than one year
and therefore is included in non-current liabilities.
Onerous Contracts
The provision unwound in the period ending 31 March 2025 is for onerous
contracts. The Group has assessed that the unavoidable costs of fulfilling the
contract obligations exceed the economic benefits expected to be received from
the contract. The provision relates to one contract in the offshore energy
division (2024: one contract) which is expected to be completed in the year
ending September 2025.
Warranty Provisions
As noted by the Group in prior public announcements, there is a historic
industry-wide issue regarding abrasion of legacy cable protection systems
installed at off-shore windfarms. The precise cause of the issues in each
instance is not always clear and could be as a result of a number of factors,
such as the decision by windfarm developers to exclude a second layer of rock
to stabilise the cables.
Since the emergence of the issue, Tekmar has been committed to working with
relevant installers and operators, including directly with customers who have
highlighted this issue, to investigate further the root cause and assist with
identifying potential remedial solutions. This has been undertaken without
prejudice and on the basis that Tekmar has consistently denied any
responsibility for these issues. Given the extensive uncertainties the, the
RCA investigations have not concluded that the Tekmar products are defective.
During the reporting period, the Group entered commercial settlement
discussions with 2 customers to resolve disputes related to the legacy defect
notifications on 9 projects with alleged CPS failures. The aggregate of the
expected outflows under the proposed settlement is £5.2m in full and final
settlement of the 9 claims of which £1.4m has already been paid out. The
provision has been estimated based on the proposed settlement value. In
addition to the above a further provision of £0.7m has been made in respect
of 1 legacy project with one of the above customers.
Working in collaboration with the relevant 2 customers, Tekmar have sought to
explore insurance available for such matters not withstanding Tekmar's
position regarding responsibility and liability. In this regard, the Group
have negotiated a commercial settlement with its EXPL insurance provider of
£5.2m in relation to the above claims. The insurance proceeds are available
for use at the discretion of the Group in settlement of the above claims, with
any unused cash repayable to the insurer. There is currently £3.8m remaining
insurance funds.
Tekmar has received a further defect notification in relation to incorrect/out
of specification coating application on 1 historic project. The nature of this
defect notification is entirely separate to the legacy defect issues disclosed
above. There are a number of units which have been installed in relation to
this legacy project and discussions with the customer are ongoing in regards
to the solution. Management believe that the most likely solution would result
in an outflow of economic benefits of c£0.2m to provide a resolution to the
issue.
The expected outflow of economic resources from the warranty matters has been
recognised as an expense on the face of the statement of profit and loss for
the period ended 31 March 2025. This value is shown net of the insurance
receivable in accordance with IAS 37.
Tekmar Group plc has taken exemption under IAS37, Paragraph 92 to not disclose
information on the uncertainties in relation to timing and the assumptions
used to calculate the provision as this could prejudice seriously the position
of the entity in a dispute with other parties on the subject matter as a
result of the early stage of settlement discussions.
CONTINGENT LIABILITIES
Contingent liabilities are disclosed in the financial statements when a
possible obligation exists, the existence will be confirmed by uncertain
future events that are not wholly within the control of the entity. Contingent
liabilities also include obligations that are not recognised because their
amount cannot be measured reliably or because settlement is not probable.
As noted by the Group in prior public announcements, there is a historic
industry-wide issue regarding abrasion of legacy cable protection systems
installed at off-shore windfarms. The precise cause of the issues in each
instance is not always clear and could be as a result of a number of factors,
such as the decision by windfarm developers to exclude a second layer of rock
to stabilise the cables.
Tekmar is committed to working with relevant installers and operators,
including directly with customers who have highlighted this issue, to
investigate further the root cause in each case and assist with identifying
potential remedial solutions. This is being done without prejudice and on the
basis that Tekmar has consistently denied any responsibility for these issues.
However, given these extensive uncertainties and level of variabilities at
this early stage of investigations no conclusions can yet be made.
Tekmar have been presented with defect notifications for 2 legacy projects (in
addition to those disclosed as provisions) on which it has supplied cable
protection systems ("CPS"). These defect notifications have only been received
on projects where there was an absence of the second layer of rock
traditionally used to stabilise the cables.
At this stage management do not consider that there is a present obligation
arising under IAS37 as insufficient evidence is available to identify the
overall root cause of the damage to any of the CPS. Independent technical
experts have been engaged to determine the root cause of the damage to the
CPS, Tekmar have reviewed the assessments and concluded that a present
obligation does not exists.
Management acknowledges that there are many complexities with regards to the
alleged defects which could lead to a range of possible outcomes. Given the
range of possible outcomes, management considers that a possible obligation
exists which will only be confirmed by further technical investigation to
identify the root cause of alleged CPS failures. As such management has
disclosed a contingent liability in the financial statements.
Tekmar Group plc has taken exemption under IAS37, Paragraph 92 to not disclose
information on the range of financial outcomes, uncertainties in relation to
timing and any potential reimbursement as this could prejudice seriously the
position of the entity in a dispute with other parties on the subject matter
as a result of the early stage of discussions.
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR UVOURVKUNUURRecent news on Tekmar
See all newsREG - Tekmar Group PLC - Unaudited Interim Results
AnnouncementREG - Tekmar Group PLC - Contract Win
AnnouncementREG - Tekmar Group PLC - Receipt of deferred consideration
AnnouncementREG - Tekmar Group PLC Schroders PLC - Holding(s) in Company
AnnouncementREG - Tekmar Group PLC - Result of AGM
Announcement