REG - Tekmar Group PLC - Final Results
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RNS Number : 8405V Tekmar Group PLC 09 March 2026
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 Group", "Tekmar", the "Group" or the "Company")
FINAL RESULTS
For the year ended 30 September 2025
Tekmar Group (AIM: TGP), a leading provider of asset protection technology and
offshore energy services, announces its audited results for the 12-month
period ended 30 September 2025 ("FY25" or the "Period").
Improving financial performance and strong commercial momentum as Project
Aurora enables enhanced visibility for value creation
FY25 Highlights
· FY25 was a year of positive progress in executing Project Aurora, with the
Group reorganised into two verticals, Asset Protection Technology and Offshore
Energy Services, delivering a leaner cost base and improved commercial focus
· FY25 revenue of £28.7m (FY24: £32.8m) and Adjusted EBITDA of £0.1m
(FY24: 1.7m) is in line with market expectations, with a £1.5m improvement in
Adjusted EBITDA in the second half of the Period (H1 25 Adjusted EBITDA:
£(0.7)m; H2 25 Adjusted EBITDA: £0.8m) driven by higher volumes and improved
utilisation and commercial execution
· Disciplined commercial approach throughout the year helped deliver a gross
profit margin of 34% for FY25, with gross profit margin in H2 25 of 38% (H1
25: 29%; FY24: 32%)
· Commercial settlement agreements concluded on the majority of legacy
defect notifications, substantially reducing historical risk exposure, with no
admission of liability or conclusion of defect with the Company's products and
nil cash impact for the Group
Post Year-End Highlights
· Continued positive business momentum driven by the implementation of
Project Aurora has yielded £43m of new orders since 1 July 2025 and a current
record order book of £40.7m
· This order book supports improved visibility with £26m of revenue already
secured for FY26 and £15m for subsequent years
· Balance sheet strengthened, and the Group's cash position significantly
improved, with the sale of Innovation House for £2.84m net of fees in
February 2026. This provides additional headroom to support growth and
investment under Project Aurora
Financial KPIs
Audited 12M ended Sep-25 Audited 12M
£m ended Sep-24
£m
Revenue(1) 28.7 32.8
Adjusted EBITDA(2) 0.1 1.7
Gross profit % 34% 32%
Commercial KPIs
12M 12M
ended Sep-25 ended Sep-24
£m £m
Order intake(3) 31.6 32.4
Notes:
(1) Revenue is the value of sales recognised in the financial statements in the
year.
(2) Adjusted Earnings before interest, tax, depreciation, amortisation and
significant one-off items, as defined in CFO review.
(3) Order intake is the value of contracts awarded in the year.
Current trading and outlook
The Board is encouraged by the positive momentum carried forward from H2 25
and the strong start to the current financial year, with a current order
backlog of £40.7m, including £26m scheduled for delivery in FY26. This
represents a marked improvement in revenue visibility as the strategic
initiatives begin to deliver tangible results. The Board expects H1 26
performance to be ahead of H1 25 and full year performance to be in line with
current market forecasts, reflecting a significant year-on-year improvement in
performance.
Tekmar operates in markets underpinned by clear long-term structural growth
drivers and the Group remains confident in its strategy to capture the
opportunities available. The Board believes the Group is well-positioned to
outperform these growing markets and to deliver sustainable growth, increasing
shareholder value.
The Board believes the successful execution of Project Aurora will build a
differentiated, diverse and profitable technology business with the attributes
valued by investors, customers and colleagues alike.
Richard Turner, CEO of Tekmar Group plc, commented: "FY25 has been a pivotal
and highly productive year for Tekmar as we launched and started to execute on
Project Aurora. The Group delivered results in line with market expectations,
alongside a material improvement in profitability in the second half.
"We are pleased to have been able to maintain our momentum post period end -
in the first four months of FY26 we have delivered a record order book, with
muti year visibility and have unlocked further growth potential by
significantly strengthening our balance sheet. We are encouraged by the strong
start to the new financial year and healthy pipeline we see ahead of us and
are focused on delivering sustained, profitable growth and enhanced value for
shareholders."
Enquiries:
Tekmar Group plc c/o +44 (0)20 4582 3500
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
Alexis Gore
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/)
Chairman's Statement
The 2025 financial year was an important period for Tekmar as we strengthened
the business and focus on delivering sustained future returns for its
shareholders.
Under the leadership of Richard Turner as CEO, who joined in September 2024,
the business has been aligned to deliver Project Aurora - our value creation
strategy. The ambition we have for Tekmar is strong and the commercial
traction we have now established, evidenced by our growing, more diversified
and high-quality order book, demonstrates that the Tekmar team is delivering
positive results.
After a challenging first half in 2025, the financial performance in the
second half of the year was significantly stronger and reflected the business'
success in converting the healthy pipeline into orderbook and then orderbook
into revenue. This positive momentum has continued into the new financial year
with a current order book(1) of £40m+, the highest reported since Tekmar's
admission to AIM in 2018. This gives us greater and improving revenue
visibility over the next 12-24 months and a stronger platform to build on.
There is still a lot we can do, and are doing, to scale the business but, as a
Board, we are greatly encouraged by the tangible progress the business is
making. This underpins the Board's confidence in a positive outlook for
Tekmar.
We have a clear strategy to deliver value for shareholders and the team is in
place to deliver the plan
Our organic growth plan remains to deliver strong financial results by
leveraging our leading position in growing end markets and to utilise our
exceptional asset base more fully. Importantly, we can drive significant
growth with our current resources, amplifying the benefits of our operational
gearing.
Our organic growth is augmented by our strategic investment strategy. We
continue to assess new opportunities to add further scale and strengthen our
offering. This is a balanced strategy that provides the Group multiple ways to
accelerate shareholder value creation.
As we execute on these plans, we are benefitting from the direction and
support provided by our Board. The Board was substantially refreshed in the
summer of 2024, with the appointments of Lars Bondo Krogsgaard and David Kemp
as Non-Executive Directors. The Board members bring deep and highly relevant
experience reflecting their diverse backgrounds in growing large,
international businesses and creating value for investors.
In August 2025, we announced the appointment of Phil Lanigan as Chief
Financial Officer. Phil brings a strong track record as a public and private
market CFO and a wealth of experience in business transformation and
integration, growth and M&A. With Phil's appointment the senior leadership
team is in place to deliver on the medium-term value creation strategy.
Tekmar's highly differentiated market position is created by its expertise and
the capability of its people
Tekmar plays a vital role in protecting critical assets and infrastructure in
harsh marine environments. Our know-how and industry expertise are hard-earned
and our technology is without equal in the industry - and highly valued by our
customers. Our track record in offshore wind highlights this pedigree with our
technologies protecting more than 50 GW of offshore wind capacity across over
120 projects worldwide. Similarly in Oil & Gas and Marine Infrastructure,
our technology is deployed globally to ensure assets are able to operate
reliably in complex and dynamic situations for the duration of their design
life.
Our team is our greatest asset and brings unrivalled experience and expertise
to provide innovative, high-quality solutions that support the success of
clients' complex projects. They demonstrate this excellence consistently and
this underpins the Group's reputation for technology leadership.
Their commitment to doing business the right way is also reflected in our
safety record. We operate at world class Health, Safety & Environment
levels. This not only protects our people, it supports operational
effectiveness and exemplary customer service - it is our licence to operate
and an important representation of our culture. On behalf of the Board, I
would like to express our thanks to all Tekmar colleagues for their sustained
efforts throughout 2025.
As a Board, we believe the successful execution of Project Aurora will build a
differentiated, diverse and profitable technology business with the attributes
that are valued by investors, customers and our people alike.
The Group is now well-positioned to capture the opportunity presented by the
favourable prevailing demand across our end markets. We have a strengthening
order book and an unprecedented sales opportunity pipeline, centred around our
own core IP, and a balanced strategy to capitalise on the growth opportunities
ahead. This gives the Board confidence that we will continue to grow
progressively and deliver increasing shareholder value.
Our commitment as a Board remains to be careful stewards of the business, to
drive solid financial decisions that promote the best interests of Tekmar's
people, shareholders and broader stakeholders as we build our path towards
longer-term success.
Thank you.
Steve Lockard
Chairman
1. Current order book is defined as revenue to be recognised from executed
contracts and purchase orders post 1 October 2025
CEO Review
Overview - an improved H2 25 performance and record order book
In FY25, the Group delivered revenue of £28.7m (FY24: £32.8m) and Adjusted
EBITDA(2) of £0.1m (FY24: £1.7m). This was in line with market expectations
and showed a material improvement in second half profitability. FY25 was my
first year as CEO of Tekmar following my appointment in September 2024. It has
been a productive year as we have reorganised the business as well as
launching and starting to execute on Project Aurora - our value creation
strategy.
In early December 2025, we provided a market update on Project Aurora. In the
update, we highlighted positive business momentum including a leaner and more
focussed organisation structure, improvements to the balance sheet and the
increasing pipeline of opportunities that had yielded £43m of new orders
secured since 1 July 2025. This positive momentum has continued into the first
half of FY26 with further significant contract wins with our Order Book(1)
standing at £40.7m as at the date of this announcement.
This is not only a record level for the business but is also well balanced
across our end markets and geographies. The business is in a much better
position than it was a year ago. We are in a good position to continue to
deliver sustained progress and results in FY26 and beyond.
Significant progress on Project Aurora
In December 2024, three months after I joined Tekmar, and following a review
of the business at all levels, we set out the Project Aurora strategic plan.
In this framework we identified three "pillars" of strategic initiatives;
Scaling the Business, Operational Excellence and Strategic Investment - the
delivery of which will result in a significantly larger, more diversified and
more resilient business.
We are very encouraged by the progress we are making on these key elements of
the plan:
Scaling the business
Growing orderbook and longer-term visibility
In H1 25 order volumes were low which translated to revenue of £12.3m and an
Adjusted EBITDA loss of £0.7m. Following the launch of Project Aurora, we
reorganised and refocused the front end of our business and implemented the
first steps of our sales growth plan. We saw the benefit of our improved
commercial effectiveness progressively throughout the year, with the
increasing order intake supporting revenue of £16.5m and Adjusted EBITDA of
£0.8m for the second half.
Since 1 July 2025, Tekmar has secured new orders of £43m supporting an order
book as at the date of this release of £40.7m. This is 116% per cent higher
than the equivalent period one year ago. These orders support significantly
improved revenue visibility with approximately £26m of revenue already
secured for FY26 and £15m for subsequent years. This is a fundamentally
stronger position for the business.
Key markets - a balanced portfolio
Tekmar is a technology leader in three primary global markets; Offshore Wind,
Oil & Gas and Marine Infrastructure
The significant number of contract awards since the start of July 2025
demonstrate that the strategy to drive balanced growth across end markets and
geographies is working:
Offshore Wind - Since the beginning of December 2025, we have announced three
significant contract awards supporting offshore wind projects in Europe and
cumulative orders value in that period in excess of £20m. These contracts see
Tekmar partnering with leading EPC customers and reinforce our position as the
market leader in subsea asset protection, with our technologies protecting two
thirds of the world's installed offshore wind capacity. The scope of these
contracts includes Front End Engineering and Design (FEED) and supply of our
latest Cable Protection System (CPS) technology. These are typically
multi-year contracts and our bidding success provides increasing revenue
visibility for the Group over the next two to three years.
Oil & Gas - Since the start of July 2025, the Group has received contract
awards with a cumulative value in excess of £42m, of which c.£22m are for
Oil & Gas customers. This includes a US$10m contract to provide CPS
technology for a major offshore energy project in the United Arab Emirates.
This was followed by a €3.5m contract in November 2025 with a leading global
oilfield services provider. These contracts evidence our successful focus on
broadening our commercial activity in this very active region. We also
delivered a £2m+ contract in the Middle East announced in July 2025 to supply
engineered subsea structures for a new pipeline project. This highlights the
significant quick turnround work that Tekmar has the capacity to deliver.
Furthermore, through our Offshore Energy Services division we have been very
successful in securing repeat business for our offshore grouting services,
both during new foundation installation but also in the Inspection Maintenance
and Repair (IMR) market where we have supported multiple pipeline
rectification projects deploying Tekmar's in-house remediation design and
deployment technology.
Marine Infrastructure - In October 2025, Tekmar announced a $1.5m contract
award for the provision of bespoke engineered scour protection and specialised
deployment equipment for a new port development. This was followed by a
further contract award of a similar size to supply engineered scour protection
solutions for a major port infrastructure development in the Middle East.
Marine Infrastructure including ports & harbours and flood defence
represents a significant growth opportunity for the Group, extending its asset
protection expertise beyond offshore energy into wider marine infrastructure
applications. We anticipate further success in this growing market segment.
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 and marine
infrastructure projects.
In addition to these secured orders, we are extending and deepening our
partnerships with blue-chip customers, including through framework agreements.
Two key frameworks were announced in 2025, one with Jan De Nul in October
2025, supporting TenneT's 2GW Program in Germany, and one with Nexans,
announced in February 2025. These multi-year agreements reflect our standing
in the market and our commitment to providing innovative, high-quality
solutions that support the success of our partners' projects.
Product Development
As pioneers and technical leaders, we are constantly learning, challenging and
pushing the boundaries to find solutions to tomorrow's challenges. Our
technology roadmap is built on several key principles:
· Evolving design methods, principles and testing practice to meet
industry needs
· Incremental developments to our core asset protection technology
products and services
· Incorporation of digital condition monitoring solutions into our
asset protection technology
· Development of sustainable, ecological solutions that reduce CO2
footprint and reduce impact on marine life
· Diversification of core capabilities into adjacent sectors such as
subsea energy infrastructure defence
· We also collaborate with Industry stakeholders at all levels, and are
active members of several Joint Industry Programs (JIPs) aimed at driving
technological advancements to reduce LCOE
Growth financing
Tekmar has an improving balance sheet which supports the delivery of the
objectives through Project Aurora. During 2025 Tekmar renewed its £4m trade
loan facility with Barclays, which is 80% backed by UK Export Finance. Tekmar
also established a new amortising £2m three-year term loan with the British
Business Bank, which replaced the £3m CBILs loan which was repaid in October
2025. Together these facilities provide flexible support for ongoing working
capital.
Going forward, the balance sheet provides further opportunity to support
growth. The growing backlog provides an improved level of revenue visibility
for the next 12 to 24 months supporting Tekmar's ability to secure competitive
financing options. The disciplined approach to costs and cash management also
continues to support an improving balance sheet.
Operational Excellence
Greater volume translating into greater profitability
Tekmar is very well equipped to deliver significantly higher volumes than it
has produced in recent years. Operationally we are able to more than treble
our output without the need for significant expansionary capex. The aggregated
demand from our primary markets is increasing and our sales growth initiatives
gives us multiple routes to outperform this growth in market demand. This
means that our utilisation will steadily increase giving us a significant
gearing effect in our P&L.
We saw this effect very clearly in FY25, where in the first half, due to lower
levels of volume we incurred a loss of £0.7m Adjusted EBITDA. In the second
half of the year, utilisation increased progressively and our revenue with it.
We maintained a disciplined commercial approach throughout the period and this
helped deliver a gross profit margin of 34%, ahead of the prior year's 32% and
H2 25 Adjusted EBITDA of £0.8m.
We also kept tight controls on overhead costs although the impact of the lower
volumes and revenue in the first half limited the level of Adjusted EBITDA we
were able to deliver for the full year.
A simpler, more streamlined business
Our changes to our organisational design give us greater accountability on
sales and operational effectiveness and are allowing us to both secure
sustainably higher volumes of good quality work, but also to deliver it on
time and on budget.
Reflecting the core capabilities of the Tekmar Group, we have reorganised 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 polymer and
hybrid-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 offshore equipment
rental services, where we have an established fleet of assets. Although a
smaller proportion of Group revenue today, we see the opportunity for revenues
to increase to be a significant proportion of Group revenue - we are targeting
25% over the time horizon of Project Aurora. Demand for these services is
increasing, and this market segment provides the opportunity to access
recurring revenue streams as well as exposure to the large and predictable IMR
market within offshore energy.
We are aligning our resources with these revenue streams to drive order intake
and deliver revenue. Our strategic investment roadmap is also aligned and
complementary to this structure.
Significant progress in resolving legacy warranty claims
During FY25, we announced commercial settlement agreements with two customers
concerning legacy defect notifications relating to the industry-wide issue
regarding abrasion of legacy cable protection systems installed at offshore
windfarms. Tekmar agreed settlement terms with both customers 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 net cash impact for Tekmar. Discussions remain ongoing to close out
the final legacy defect notifications.
Strategic Investment
Continuing to actively assess and progress accretive investment opportunities
We continue to work hard on our strategic investment strategy which is based
on accelerating scale and strengthening our offering through a logical
broadening of the portfolio via expansionary Capex or 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. We are
also developing a number of business cases for growth investment in additional
asset capacity in Offshore Energy Services as well as targeted R&D in
AI/digitalisation and cable system defence.
Current trading and outlook
The Board is encouraged by the positive momentum carried forward from H2 25
and the strong start to the current financial year, with a current order
backlog of £40.7m, including £26m scheduled for delivery in FY26. This
represents a marked improvement in revenue visibility as the strategic
initiatives begin to deliver tangible results. The Board expects H1 26
performance to be ahead of H1 25 and full year performance to be in line with
current market forecasts, reflecting a significant year-on-year improvement in
performance.
Tekmar operates in markets underpinned by clear long-term structural growth
drivers and the Group remains confident in its strategy to capture the
opportunities available. The Board believes the Group is well-positioned to
outperform these growing markets and to deliver sustainable growth, increasing
shareholder value.
The Board believes the successful execution of Project Aurora will build a
differentiated, diverse and profitable technology business with the attributes
valued by investors, customers and colleagues alike.
Richard Turner
Chief Executive Officer
9 March 2026
2. 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 Group Results
section of this report. Adjusted EBITDA might not be comparable to other
companies.
CFO Review
For the year ended 30 September 2025
FY25 FY24
£m £m
Revenue 28.7 32.8
Gross Profit 9.8 10.5
Gross Margin 34.2% 32.0%
Adjusted EBITDA(3) 0.1 1.7
Exceptional expenses (1.8) (2.4)
Depreciation (1.5) (1.3)
Amortisation of Intangibles (0.3) (1.9)
Net finance cost (0.7) (0.7)
Loss before taxation (4.2) (4.5)
Loss for the year (3.9) (6.4)
EPS (2.83p) (3.74p)
3. Adjusted EBITDA is a key metric used 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 Group Results
section of this report. Adjusted EBITDA might not be comparable to other
companies.
For the year ended 30 September 2025, the Group reported revenue of £28.7m
(FY24 £32.8m). The shortfall in revenue on FY24 reflects a period of lower
volume that commenced in second half of FY24 with recovery commencing in the
second half of FY25. Revenue in second half of FY25 was £16.5m which was up
33% on the first six months. The increase in revenue fed through to an
Adjusted EBITDA of £0.8m H2 25 compared to reported Adjusted EBITDA loss of
£0.7m in H1 25.
The Adjusted EBITDA for the full year of £0.1m (FY24 £1.7m) was offset by
exceptional costs of £1.8m (FY24 £2.4m), depreciation and amortisation
charges of £1.8m (FY24 £3.2m) and net finance costs of £0.7m (FY24 £0.7m).
The Group's loss before tax from continuing operations was £4.2m (FY24
£4.5m).
Whilst revenue was lower than prior year, the Group's improved contracting
policies, project execution and strategic supply chain initiatives helped
margins to improve. Gross margin in the year was 34.2% an increase of 2.2% on
prior year.
The Group has been restructured in the year into Asset Protection Technology
and Offshore Energy Services to better align products and services with
markets to generate synergies in revenue and deliver cost savings.
Revenues in Asset Protection Technology were down 15.2% on FY24 at £26.5m.
These revenues delivered an Adjusted EBITDA of £1.8m (FY24 £4.6m). Gross
margins showed an improvement on prior year of 35.1% (34.2%). The division
recorded an operating loss of £0.4m (FY24 loss £0.3m).
Within Asset Protection Technology £17.6m (FY24 £17.1m) of revenue was
derived from Offshore Wind and Renewables reflecting the Group's heritage in
this market. The other major sector served by the division is Oil & Gas
and revenues in FY25 were £8.4m (FY24 £14.5m) primarily from the Middle
East.
Marine Infrastructure represent the major proportion of the remaining revenue
with Tekmar supporting ports & harbours projects. This market represents a
potential growth opportunity for the Group in future years.
Revenues in Offshore Energy Services increased to £2.2m (FY24 £1.5m), an
increase of 46%, primarily driven by offshore grouting services. The division
recorded an Adjusted EBITDA of £0.3m (FY24 loss £0.3m) as the business
became more established and customers' increasing confidence in the business
delivered a more consistent flow of work.
Operating expenses
Operating expenses for the 12-month period to 30 September 2025 were £13.5m
compared to £14.4m for the previous year.
As part of Project Aurora, the Group has sought to balance the requirement to
cut costs with the need to invest in the right areas. We have invested in our
people supporting them with cost of living pay rises and improvements in
pension contributions, in addition to the higher employer national insurance
contributions. We have invested in management resource in FY25 in the Middle
East to support our growth aspirations in this region.
The implementation of our new ERP system, SAGE Intacct, commenced last year
and went live this year. The system provides a platform for the Group to
centralise functions improving cost efficiency which commenced in FY25.
FY24 included a goodwill impairment charge of £1.5m relating to offshore
energy CGU within Asset Protection Technology division, there is no
requirement for further impairment in FY25.
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 below table shows the adjustments that have been made to calculate
Adjusted EBITDA in the year ended 30 September 2025.
FY25 FY24
£m £m
Exceptional share-based payments 0.17 0.16
Foreign exchange losses - 0.62
Exceptional IT costs 0.05 0.17
Warranty provision 0.22 0.66
Expected credit loss 0.51 0.52
Restructuring costs 0.85 0.23
Exceptional costs 1.80 2.36
The one-off costs treated as exceptional in FY25 were restructuring £0.9m
(£0.2m), these costs included the departure of former CEO and CFO, and
recruitment costs for replacements. The other exceptional cost included £0.5m
(FY24 £0.5m) further provision against unpaid invoices from China plus
professional fees supporting recovery of those old invoices to be paid and
payable, warranty provision costs £0.2m (FY24 £0.7m), share based payments
£0.2m (FY24 £0.2m) and IT costs relating to new ERP system £0.1m (FY24
£0.2m). FY24 exceptional costs included FX losses of £0.6m.
73% (FY24 82%) of the Group's projects and revenue is derived from sales
outside of the United Kingdom and, as a result, the Group has exposure to
fluctuations in foreign currency rates.
The Group mitigates exposure to fluctuations in foreign exchange rates by the
use of derivatives, mainly forward currency contracts and options. At the year
end the Group held forward currency contracts to mitigate the risk of
receivables balances for both Euros and Dollars. At the year end the Group had
a derivative liability of £0.1m (FY24 asset of £0.3m).
On certain overseas projects the Group can, in some cases, create a natural
hedge by matching the currency of the supply chain to the contracting
currency, this helps to mitigate the Group's exposure to foreign currency
fluctuations.
The Group uses derivatives to assist in managing its FX exposures and these
helped mitigate the Group's FX risk. The Group's net loss from FX in FY25 was
minimal (FY24 £0.6m).
The Group's financing costs were £0.7m (FY24: £0.7m) with reduction in UK
interest rates and lower utilisation of the Trade Loan. The average draw down
in FY25 was £2.5m (FY24 £3.1m) reducing the Group's bank interest charges.
Financing costs include £0.1m (FY24 £Nil) relating to the unwind of discount
applied to provisions within long term liabilities.
The tax credit for the year is £0.2m (FY24 charge £0.6m). The tax credit in
FY25 is due to reversal of timing differences and a small taxation charge on
profits earned overseas. The FY24 tax charge includes an adjustment in respect
of prior years.
The result for the period is a loss of £3.9m (FY24: £6.6m). The loss in FY24
contains losses of £1.3m from Subsea Innovation Limited, a business sold in
FY24 and treated as discontinued operations.
Balance Sheet
A summary balance sheet is presented below:
Balance Sheet
£m FY25 FY24
Fixed Assets 3.8 4.5
Other non-current assets 16.5 19.6
Inventory 1.3 1.9
Trade & other receivables 14.2 20.3
Assets held for resale 2.8 -
Cash 3.4 4.6
Current liabilities (17.0) (20.9)
Non-current liabilities (0.6) (1.8)
Equity 24.4 28.2
Trade and other receivables are down £6.1m from 30 September 2024. Included
within Trade and other receivables on 30 September 2024 was a £5.2m Warranty
Insurance Debtor. These monies were received in the financial year and a
significant proportion paid out as settlement on warranty issues without
admission of liability.
At 30(th) September 2025, the Group holds a debt of £1.1m outside of standard
credit terms with a customer in China, following recoveries of £1m+ in FY25.
Prior to FY24, the Group had recovered 100% of receivable balances and no
credit losses have previously been accounted for. In FY24, the Group made a
credit loss provision in line with IFRS9 of £0.5m in relation to a specific
historic debt in China. This has been increased by £0.5m in FY25 which
includes fees incurred in supporting the recovery of monies totalling
approximately £1.5m. The loss provision covers all amounts not party to the
formal recovery agreement with the Chinese customer.
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. Following receipt of £1.1m
over the past year, the value of the overdue trade receivables had reduced to
£1.1m (FY24 £2.0m), of a total outstanding trade receivable balance for the
entity of £1.2m (FY24 £2.2m). These amounts are not in dispute from the
customer, however given the range of possible outcomes and duration of the
outstanding debt, the Group has increased the expected credit loss provision
in relation to the outstanding China debt by £0.2m to £0.7m. Further details
can be found in note 16 of the Annual Report.
Included within other current liabilities is a provision of £2.0m (FY24
£5.1m) and non-current liabilities a provision of £nil (FY24 £0.7m). The
provision covers the warranty matters outlined in note 20 of the Annual
Report.
The gross cash balance at 30 September 2025 was £3.4m with net debt (gross
cash less bank facilities) of £2.9m. The Group's cash position at year end
includes £1.1m received from Insurers for settlement of warranty claims and
its use is restricted.
The Group repaid its CBILs facility of £3.0m in full on 30 October 2025 and
replaced it with a GGS Loan of £2.0m. The GGS loan is repayable at quarterly
intervals over 3 years. The UKEF backed trade loan facility of £4.0m remains
available to Tekmar, with the next annual review date with Barclays Bank being
in June 2026. These facilities continue to support the working capital
requirements of the Group in delivering the projects the Group undertakes. The
expected continued renewal of the banking facilities forms part of the
Directors going concern assumptions which are set out in Note 2b below.
Of the £4.0m trade loan facility available, £2.8m was drawn against supplier
payments at the year end and is repayable within 90 days of drawdown. The FY24
comparative is £3.2m. The change in the value borrowed is dependent on the
timing of the loan drawdowns and the Group's immediate funding requirements.
The trade loan facility balance and the CBILS loan of £3.0m are reported
within current liabilities as both are fully repayable within 12 months of the
balance sheet date.
Cashflow
Cash Flows
£m FY25 FY24
Cash inflows/(outflows) from:
Operating activities (1.3) (0.5)
Changes in working capital 0.3 3.4
Investing activities 1.1 (2)
Financing activities (1.3) (1.6)
Net Cash Outflow (1.2) (0.3)
The Group experienced a net outflow of cash in the year of £1.2m (FY24
outflow £0.3m).
The net cash outflow from operating activities was £1.3m (FY24 £0.5m) with
lower Adjusted EBITDA of £0.1m (FY24 £1.7m) being offset by significant
one-off costs including restructuring costs and further credit provision
against old Chinese receivables.
There was no real net movement on Working Capital in the year with the
recovery of £1.1m of old Trade Receivables in China helping to offset other
working capital movements.
The net cash inflow from investing activities was £1.09m (FY24 outflow
£1.96m). £1.74m was deferred consideration received from sale of Subsea
Innovation.
Net cash outflows from financing activities of £1.29m (FY24 £1.61m). The
decrease is primarily due to lower interest costs of £0.52m (FY24 £0.79m)
arising from reduction in UK interest rates and lower average utilisation of
the Trade Loan compared to FY24. The average drawdown on the Trade Loan in
FY25 was £2.5m (FY24 £3.2m).
Effective cash management remains a priority for management to ensure that the
growth opportunities available to the Group can be supported from its existing
resources as the business scales.
Post Balance Sheet Events
On 30 October 2025, the CBILS facility of £3.0m was repaid in full. On 30
October 2025, the Group entered into a new £2m GGS loan which was drawn down
in full. The GGS loan is repayable at quarterly intervals over 3 years.
On 27 February 2026, the Group legally completed the sale of Innovation House
and adjacent land. The property was held in the accounts as an "asset held for
resale" at a value of £2.84m. The net proceeds, after deduction of selling
expenses, are estimated to be £2.84m.
Summary
The business has had a challenging twelve months but has emerged in a stronger
position, better positioned to succeed in the future. Further progress has
been made in dealing with past issues, including non-core operations, legacy
warranty issues and old China debtors.
The improved performance in H2 25 provides an indicator of what the business
can deliver with an improving orderbook which converts into profitable
revenues.
The recent contract wins and agreement to sell the Investment property
represent a good start to FY26 building upon the foundations laid over the
past year.
Philip Lanigan
Chief Financial Officer
9 March 2026
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2025
Year Year
ended ended
Note 30 Sep 30 Sep
2025 2024
£000 £000
Revenue 4 28,747 32,808
Cost of sales (18,906) (22,291)
Gross profit 9,841 10,517
Other Administrative expenses (13,113) (13,195)
Expected credit loss (510) (520)
Warranty provision 12 - (656)
Total administrative expenses (13,623) (14,371)
Other operating income 259 22
Group operating loss (3,523) (3,832)
Analysed as:
Adjusted EBITDA( 1 ) 62 1,714
Depreciation (1,531) (1,277)
Amortisation (259) (366)
Exceptional Share based payments charges (166) (160)
Impairment of goodwill - (1,545)
Exceptional IT costs (53) (169)
Foreign exchange losses - (623)
Warranty costs (218) (656)
Expected credit loss (China debt recovery) (510) (520)
Restructuring costs (848) (230)
Group operating (Loss) (3,523) (3,832)
Finance costs (679) (727)
Finance income 26 19
Net finance costs 5 (653) (708)
(Loss) before taxation from continuing operations (4,176) (4,540)
Taxation 270 (557)
(Loss) for the period from continuing operation (3,906) (5,097)
Discontinued operations - (1,316)
(Loss) for the period (3,906) (6,413)
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.
Year Year
ended ended
Note 30 Sep 30 Sep
2025 2024
Items which will not be reclassified subsequently to profit or loss
Revaluation of property - 75
Items which will be reclassified subsequently to profit or loss
Retranslation of overseas subsidiaries (23) (333)
Total comprehensive loss for the period (3,929) (6,671)
Loss attributable to owners of the parent (3,906) (6,413)
Total comprehensive income attributable to owners of the parent (3,929) (6,671)
(Loss) per share (pence) from continuing operations
Basic 6 (2.83) (3.74)
Diluted 6 (2.83) (3.74)
(Loss) per share (pence) from discontinued operations
Basic 6 - (0.97)
Diluted 6 - (0.97)
Consolidated Statement of Financial Position
as at 30 September 2025
30 Sep 30 Sep
2025 2024
Note
£000 £000
Non-current assets
Property, plant and equipment 3,811 4,514
Goodwill and other intangibles 7 16,529 16,708
Investment property 8 - 2,842
Deferred tax asset 79 -
Total non-current assets 20,419 24,064
Current assets
Inventory 1,280 1,878
Trade and other receivables 9 14,134 20,336
Cash and cash equivalents 3,410 4,630
18,824 26,844
Assets held for sale 2,842 -
Total current assets 21,666 26,844
Total assets 42,085 50,908
Equity and liabilities
Share capital 1,389 1,373
Share premium 72,202 72,202
Merger relief reserve 744 744
Merger reserve (12,685) (12,685)
Foreign currency translation reserve (464) (441)
Retained losses (36,745) (33,029)
Total equity 24,441 28,164
Non-current liabilities
Other interest-bearing loans and borrowings 11 594 924
Deferred tax liability - 234
Provisions 12 - 656
Total non-current liabilities 594 1,814
30 Sep 30 Sep
2025 2024
Note
Current liabilities
Other interest-bearing loans and borrowings 11 6,254 6,554
Trade and other payables 10 8,079 8,503
Corporation tax payable 661 647
Provisions 12 2,056 5,226
Total current liabilities 17,050 20,930
Total liabilities 17,644 22,744
Total equity and liabilities 42,085 50,908
The Group financial statements were approved by the Board and authorised for
issue on 9 March 2026 and were signed on its behalf by:
Philip
Lanigan
Richard Turner
Chief Financial
Officer
Chief Executive Officer
Company registered number: 11383143
Consolidated Statement of Changes in Equity
for the year ended 30 September 2025
Share Share premium Merger Merger reserve Foreign currency translation reserve Retained losses 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 year - - - - - (6,413) (6,413) (6,413)
Revaluation of property - - - - - 75 75 75
Exchange difference on translation of overseas subsidiary - - - - (333) - (333) (333)
Total comprehensive income for the year - - - - (333) (6,338) (6,671) (6,671)
Share based payments - - - - - 169 169 169
Issue of shares 13 - - - - - 13 13
Total transactions with owners, recognised directly in equity 13 - - - - 169 182 182
Transfer following disposal 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 year - - - - - (3,906) (3,906) (3,906)
Exchange difference on translation of overseas subsidiary - - - - (23) - (23) (23)
Total comprehensive (loss) for the year - - - - (23) (3,906) (3,929) (3,929)
Share based payments - - - - - 190 190 190
Issue of shares, net of transaction costs 16 - - - - - 16 16
Total transactions with owners, recognised directly in equity 16 - - - - 190 206 206
Balance at 30 September 2025 1,389 72,202 744 (12,685) (464) (36,745) 24,441 24,441
Consolidated cash flow statement
for the year ended 30 September 2025
Year ended Year ended
30 Sep 2025 30 Sep 2024
£000 £000
Cash flows from operating activities
Loss before taxation (4,176) (5,856)
Adjustments for:
Depreciation 1,531 1,365
Amortisation of intangible assets 259 483
(Gain)/loss on disposal of fixed assets (66) 41
Share based payments charge 163 193
Loss on disposal of discontinued operations - 1,316
Impairment of goodwill - 1,546
Unrealised foreign losses/( gains) 314 (276)
Finance costs 679 727
Finance income (26) (19)
(1,322) (480)
Changes in working capital:
Decrease in inventories 598 82
Decrease / (Increase) in trade and other receivables 4,214 (2,533)
(Decrease) / increase in trade and other payables (516) 790
(Decrease) / Increase in provisions (3,960) 5,439
Net cash (outflow) / inflow from operating activities (986) 3,298
Cash flows from investing activities
Purchase of property, plant and equipment (664) (1,697)
Purchase of intangible assets (80) (235)
Proceeds on sale of property, plant and equipment 66 71
Proceeds/(outflows) from deferred consideration on sale of subsidiary 1,741 (112)
Interest received 26 19
Net cash inflow / (outflow) from investing activities 1,089 (1,954)
Cash flows from financing activities
Facility drawdown 11,930 11,413
Facility repayment (12,296) (11,805)
Repayment of borrowings under lease obligations (434) (436)
Shares issued 16 13
Interest paid (513) (795)
Net cash (outflow) from financing activities (1,297) (1,610)
Net decrease in cash and cash equivalents (1,194) (266)
Cash and cash equivalents at beginning of year 4,630 5,219
Effect of foreign exchange rate changes (26) (322)
Cash and cash equivalents at end of year 3,410 4,630
Notes to the Group Financial Statements
for the year ended 30 September 2025
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
Grindon Way, Aycliffe Business Park, Newton Aycliffe, DL5 6SH. 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.
Statement of compliance
The financial information set out in this preliminary announcement does not
constitute the Group's statutory financial statements for the year ended 30
September 2025 or 30 September 2024 as defined in section 435 of the Companies
act 2006 (CA 2006) but is derived from those audited financial statements.
Statutory financial statements for 2024 have been delivered to the Registrar
of Companies and those for 2025 will be delivered in due course. The auditors
reported on those accounts; their reports were unqualified and did not contain
a statement under either Section 498(2) or Section 498(3) of the Companies Act
2006. For the year ended 30 September 2024 their report contained a material
uncertainty in respect of going concern without modifying their report, no
such matter was reported for the year ended 30 September 2025.
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.
Forward looking statements
Certain statements in this Annual 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 years 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 results for the year ended 30 September 2025 have been prepared in
accordance with UK-adopted International Accounting Standards ("IFRS"). The
financial statements have been prepared on the going concern basis and on the
historical cost convention modified for the revaluation of Investment property
and Freehold property, and certain financial instruments. The comparative
period represents 12 months to 30 September 2024.
Tekmar Group plc ("the Company") has adopted all IFRS in issue and effective
for the year.
(b) Going concern
The Directors have prepared cash flow forecasts to 31 March 2027. 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 sectors and geographies where the Group trades. The
forecasts assume lower gross margins than historically achieved and retention
of the cost base of the business with increases in salaries. The forecasts
include the proceeds from the sale of the asset held for resale, formerly
classified as an Investment Property. which completed on 27 February 2026.
These forecasts show that the Group is expected to have a sufficient level of
financial resources available to continue to operate throughout the forecast
period without recourse to the utilisation of the Trade Loan.
The Group held £3.4m of cash at 30 September 2025 and had drawn down £2.8m
of the trade loan facility, in addition the Group had a CBILS Loan of £3.0m
which has been repaid in full post year end. In October 2025, the Group
borrowed £2.0m through a GGS loan which is subject to quarterly repayments of
£0.17m over a term of 3 years.
On 27 February 2026, the Group completed the sale of the property for a net
cash consideration of £2.8m.
The Group meets its day-to-day working capital requirements through its
operational cash balances and available banking facilities which includes a
trade loan facility of up to £4.0m that can be drawn against supplier
payments. The Trade Loan is backed by UKEF due to the nature of the business
activities both in renewable energies and in driving growth through export led
opportunities. The Trade Loan is an uncommitted facility, has an annual
renewal and the Directors expect it to be renewed based on past experience,
post year end refinancing, sale of the property, improved trading performance
and the support of UKEF.
There are no financial covenants that the Group must adhere to in either of
the bank facilities though following the receipt of monies from the property
sale £0.8m is to be retained in a restricted account.
Within the base case and sensitised models management have modelled the
outflow of cash of £2.0m in relation to note 20 Provisions of the Annual
Report within the going concern period. Management have not modelled anything
in relation to the matter set out in note 20 Contingent Liabilities of the
Annual Report, 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 16%
(£10.2m equivalent) for the 18-month period to 31 March 2027, to model the
potential loss or delay of a certain level of contracts in the pipeline that
form the base case forecast. 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.
The sensitivities modelled give the Directors comfort in adopting the going
concern basis of preparation for these financial statements.
In a further additional severe but plausible scenario, reducing revenue by 16%
(£10.2m equivalent) for the 18-month period to 31 March 2027 and assuming no
availability of the Trade Loan would result in a 'near miss' at March 2027,
when £1.5m of mitigations are modelled, and the £0.8m fund remains
restricted throughout the going concern period. The Directors consider this
scenario to be overly severe and extremely unlikely given the expectation of
the renewal of the trade loan facility and the secured orderbook.
The Directors have undertaken a "Reverse Stress Test". This reduces the
revenue over the forecast period from the sensitised case by a further 15%.
The Directors believe the assumptions to be implausible based on current
trading and orderbook.
The Directors are satisfied that the cash flow forecasts 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 financial statements and for this reason they continue to
adopt the going concern basis in preparing the 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 in the asset protection technology division arises from the supply of
subsea protection solutions and associated equipment, principally through
fixed fee contracts. Offshore energy services division revenue is from supply
of equipment and services, either through fixed fee contracts or contracts
based on time duration. There are also technical consultancy engineering
services delivered within asset protection technology division.
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 of the Annual Report.
(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.
(g) Investment property
Investment property is property held to earn rentals and is accounted for
using the fair value model.
Investment property is revalued annually with resulting gains and losses
recognised in Statement of Comprehensive Income. This is included in the
consolidated statement of financial position and their fair values. See note
13 of the Annual Report.
Asset held for resale
The investment property is classified as an asset held for resale.
(h) Provisions and contingent liabilities
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate,
the risks specific to the liability.
A contingent liability is a possible obligation that arises from past events
and whose existence will be confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly within the control of the
entity. A contingent liability is a disclosure in the notes to the financial
statements only.
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
(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) of the Annual Report.
(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 within the Asset Protection Technology segment, within the
PU Business at year end if the percentage completion was 1% different to
management's estimate the revenue impact would be £138,460 and within the
Concrete Business 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
£31,200. 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 16 of the Annual Report)
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 products
and services of PU, Concrete, Engineering Services and Offshore Energy
Services. 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 11 of the Annual Report.
Provision for warranty costs
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.
4. REVENUE AND SEGMENTAL REPORTING
Management has determined the operating segments based upon the information
provided to the Board of Directors which is considered the chief operation
decision maker. The Group is managed and reports internally by business
division and market for the year ended 30 September 2025.
Major customers
In the year ended 30 September 2025 there were four major customers within the
Group that individually accounted for at least 10% of total revenues (2024:
two customers). The revenues relating to these in the year to 30 September
2025 were £14,418,000 (2024: £11,085,000). Included within this is revenue
from multiple projects with different entities within the Group.
Analysis of revenue by region Year ended Year ended
30 Sep 2025 30 Sep 2024
£000 £000
UK 7,798 5,836
Europe 6,900 954
USA & Canada 3,708 555
Asia Pacific 1,559 9,833
Middle East 8,592 14,986
Rest of World 190 644
28,747 32,808
Analysis of revenue by product category Year ended Year ended
30 Sep 2025 30 Sep 2024
£000 £000
Asset Protection Technology 26,524 31,289
Offshore Energy Services 2,223 1,519
28,747 32,808
Analysis of revenue by recognition point Year ended Year ended
30 Sep 2025 30 Sep 2024
£000 £000
Point in Time 2,859 1,889
Over Time 25,888 30,919
28,747 32,808
At 30 September 2025, the Group had contracts with values of £17,241,000
(2024: £15,471,000) allocated to performance obligations on contracts which
has not been fully satisfied at the end of the reporting period. The amount of
revenue recognised in the reporting year to 30 September 25 which was
previously recorded in contract liabilities was £670,000 (2024: £2,790,000).
Adjusted EBITDA is measured by division and the Board reviews this on the
following basis.
Due to changes in senior management, and the development of new products the
Chief Decision Maker has changed operating segments in this financial year to
Asset Protection Technology and Offshore Energy Services. Comparatives have
been restated.
Asset Protection Technology Offshore
2025 Energy Group/
Services Eliminations Total
2025 2025
£000 £000 £000 £000
Revenue 26,524 2,223 - 28,747
Cost of sales (17,227) (1,679) - (18,906)
Gross profit 9,297 544 - 9,841
% Gross profit 35.1% 24.5% - 34.2%
Administrative expenses (9,331) (500) (3,282) (13,113)
Warranty provision - - - -
Expected credit loss (510) - - (510)
Other operating income 97 - 162 259
Operating profit / (loss) from continuing operations (447) 44 (3,120) (3,523)
Analysed as:
Adjusted EBITDA 1,781 305 (2,025) 61
Depreciation (1,255) (258) (18) (1,531)
Amortisation (207) - (51) (258)
Exceptional share based payment charges (25) - (141) (166)
Exceptional IT costs - - (53) (53)
Warranty costs (218) - - (218)
China debt recovery (510) - - (510)
Restructuring costs (13) (3) (832) (848)
Operating profit / (loss) from continuing operations (447) 44 (3,120) (3,523)
Finance costs (247) - (432) (679)
Finance income 26 - - 26
Tax (39) - 309 270
(Loss) / profit after tax from continuing operations (707) 44 (3,243) (3,906)
Asset Protection Technology Offshore Energy Services
2025 2025 Group/
Eliminations Total
2025
£000 £000 £000 £000
Other information
Reportable segment assets 21,455 1,598 19,032 42,085
Reportable segment liabilities 10,742 112 6,790 17,644
The goodwill and other intangible assets allocated to Group for the purposes
of internal reporting are £15,805,000 for Asset Protection Technology and
£nil for Offshore Energy Services.
Asset Protection Technology Offshore
2024 Energy Group/
(restated) Services Eliminations Total
2024 (restated) 2024
(restated) (restated)
£000 £000 £000 £000
Revenue 31,289 1,519 - 32,808
Cost of sales (20,596) (1,695) - (22,291)
Gross profit 10,693 (176) - (10,517)
% Gross profit 34.2% (11.6%) - 32.1%
Administrative expenses (9,778) (261) (3,156) (13,195)
Warranty provision (656) - - (656)
Expected credit loss (520) - - (520)
Other operating income 10 - 12 22
Operating profit / (loss) from continuing operations (251) (437) (3,144) (3,832)
Analysed as:
Adjusted EBITDA 4,605 (321) (2,570) 1,714
Depreciation (1,149) (116) (12) (1,277)
Amortisation (268) - (98) (366)
Exceptional share based payment charges (52) - (108) (160)
Impairment of goodwill (1,545) - - (1,545)
Exceptional IT costs (46) - (123) (169)
Warranty costs (656) - - (656)
China debt recovery (520) - - (520)
Foreign exchange losses (620) - (3) (623)
Restructuring costs - - (230) (230)
Operating profit / (loss) from continuing operations (251) (437) (3,144) (3,832)
Finance costs (80) - (647) (727)
Finance income 19 - - 19
Tax (830) - 273 (557)
(Loss) / profit from continuing operations (1,142) (437) (3,518) (5,097)
Asset Protection Technology Offshore
2024 Energy Group/
(restated) Services Eliminations Total
2024 (restated) 2024
(restated) (restated)
£000 £000 £000 £000
Other information
Reportable segment assets 27,097 1,427 22,384 50,908
Reportable segment liabilities 15,324 171 7,249 22,744
5. NET FINANCE COSTS
Year ended Year ended
30 Sep 2025 30 Sep 2024
£000 £000
Interest payable and similar charges
On other loans 545 727
Unwinding of discount 134 -
Total interest payable and similar charges 679 727
Interest receivable and similar income
Interest receivable 26 19
Total interest receivable and similar income 26 19
Net finance costs 653 708
Interest expense on lease liabilities was £76,000 (2024: £78,000).
6. 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:
30 Sep 2025 30 Sep 2024
Continuing operations Continuing operations Discontinued operations
Earnings (£000)
Earnings for the purposes of basic and diluted earnings (3,906) (5,097) (1,316)
Per 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 138,137,753 136,387,508 136,387,508
Weighted average dilutive effect of conditional share awards 5,930,403 8,199,289 8,199,289
Weighted average number of shares for the purposes of diluted earnings per 144,068,156 144,586,797 144,586,797
share
Profit per ordinary share (pence)
Basic profit per ordinary share (2.83) (3.74) (0.96)
Diluted profit per ordinary share (2.83) (3.74) (0.96)
Adjusted loss per ordinary share (pence)* (1.55) (1.04) (0.96)
The calculation of adjusted earnings per share is based on the following data:
30 Sep 2025 30 Sep 2024
Continuing operations Continuing operations Discontinued operations
£000 £000 £000
(Loss) for the period attributable to equity shareholders (3,906) (5,097) (1,316)
Add back:
Impairment of goodwill - 1,545 -
Amortisation on acquired intangible assets 55 98 -
Exceptional share based payment 166 160 -
Exceptional staff costs (restructuring) 848 230 -
Exceptional IT costs 53 169 -
Warranty costs 218 656 -
China debt recovery 510 520 -
Tax effect on above (87) 351 -
Adjusted earnings (2,143) (1,367) (1,316)
*Adjusted earnings per share is calculated as profit for the period adjusted
for amortisation as a result of business combinations, one off items, share
based payments 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.
Goodwill Software Product development Trade name Customer relationships Total
£000 £000 £000 £000 £000 £000
COST
As at 1 October 2023 26,292 294 3,814 1,289 1,870 33,559
Additions 150 - 85 - - 235
Disposals - (272) (845) - - (1,117)
Discontinued operations (234) - (880) (738) (445) (2,297)
As at 30 September 2024 26,208 22 2,174 551 1,425 30,380
Additions - - 80 - - 80
As at 30 September 2025 26,208 22 2,254 551 1,425 30,460
AMORTISATION AND IMPAIRMENT
As at 1 October 2023 8,854 294 2,590 584 1,870 14,192
Amortisation charge for the year - - 385 98 - 483
Eliminated on disposal - (272) (844) - - (1,116)
Impairment charge 1,546 - - - - 1,546
Discontinued operations - - (576) (412) (445) (1,433)
As at 30 September 2024 10,400 22 1,555 270 1,425 13,672
Amortisation charge for the year - - 204 55 - 259
As at 30 September 2025 10,400 22 1,759 325 1,425 13,931
NET BOOK VALUE
As at 30 September 2023 17,438 - 1,224 705 - 19,367
As at 30 September 2024 15,808 - 619 281 - 16,708
As at 30 September 2025 15,808 - 495 226 - 16,529
7. GOODWILL AND OTHER INTANGIBLES
The remaining amortisation periods for software and product development are 6
months to 48 months (2024: 6 months to 48 months).
Goodwill has been tested for impairment. The method, key assumptions and
results of the impairment review are detailed below:
Goodwill is attributed to the CGU being the division in which the goodwill has
arisen. The CGUs within the Group have been reviewed. The Group has 4 CGUs and
the goodwill related to each CGU as disclosed below.
Goodwill 2025 2024 (restated)
£000 £000
Asset Protection Technology:
PU Products 13,068 13,068
Concrete Products 2,590 2,590
Engineering Services 150 150
Offshore Energy Services:
Offshore Energy Services (incl Grouting) - -
Following the review of the business and launch of Project Aurora, the
business was refocussed into Asset Protection Technology and Offshore Energy
Services. Following this realignment of the business, the CGUs within the
Group were reviewed.
Goodwill is now allocated to four CGUs being PU Products, Concrete Products,
Engineering Services and Offshore Energy Services. 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 and into perpetuity. The forecasts have been compiled at
individual CGU level with the first year and second 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 growth rates applied across years 2 to 5 were 7.5% for the PU
Products CGU, 5% for the Concrete Products CGU, 5% for the Engineering
Services CGU and 5% for the Offshore Energy Services CGU. Gross margin
assumptions applied range from the overall group margin for FY25 to a level in
line with the margin reported for each operating segment. The value in use
calculation models an increase in revenue, costs and EBITDA for both CGU's of
2% into perpetuity after year 5.
The cashflow forecasts assume growth in revenue across the Group. These growth
rates are based on past experience, current forward orderbook 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% WACC (FY24 14.3%) 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% (FY24: 2%)
The value in use calculations performed for the impairment review were higher
than the carrying value of the PU Products CGU. The value in use calculations
have a range of assumptions, which if changed would lead to an impairment
charge. To assess these changes management have run a model which sensitises
the assumption on EBITDA generated in the PU Products CGU. In the base case
model, management have assumed varying growth rates across the 5 year period,
with an average CAGR across the period of 17.4%. If the CGU fell short of the
revenue growth by 1% in each year and Gross Margin reduced by 1% in each
period of the model the PU Products CGU value in use would reduce and an
impairment charge of £4,535k would be required. The base case model assumes a
post-tax discount rate of 14.0%.
The value in use calculations performed for the impairment review were higher
than the carrying value of the Concrete Products CGU. The value in use
calculations have a range of assumptions, which if changed would lead to an
impairment charge. To assess these changes management have run a model which
sensitises the assumption on EBITDA generated in the Concrete Products CGU. In
the base case model, management have assumed varying growth rates across the 5
year period, with an average CAGR across the period of 10.1%. If the CGU fell
short of the revenue growth by 1% in each year and Gross Margin reduced by 1%
in each period of the model the Concrete Products CGU value in use would
reduce and an impairment charge of £1,304k would be required. The base case
model assumes a post-tax discount rate of 14.0%.
8. INVESTMENT PROPERTY
Investment property includes commercial properties in England which are owned
to earn rentals and for capital appreciation.
Changes to carrying amounts are as follows:
30 Sep 2025 30 Sep 2024
£'000 £'000
Fair value 1 October 2,842 -
Transferred from freehold property - 2,842
Change in fair value - revaluation - -
Transferred to assets held for sale (2,842)
Fair value 30 September - 2,842
The investment property was leased to third parties on an operating lease.
Rental income of £119,000 (2024: £nil) is shown within other operating
income. There are no expenses in relation to the investment property.
Although the risks associated with rights the Group retained underlying assets
are not considered to be significant, the Group employs strategies to further
minimise these risks. The under guaranteed residual values do not represent
significant risk for the Group, as they relate to property which is located in
a location where market value, year on year, has always remained stable with
trivial fluctuations. For example, ensuring the contract includes clauses
requiring the lessee to compensate the Group when a property has been
subjected to excess wear-and-tear during the lease term. The lessee does not
have an option to purchase the property at the end of the lease expiry period.
The lease contract was renewed in May 2025 for a 12 month period at a rate of
£185,000 per annum.
The property was valued using by an independent valuer (G F White LLP) on 30
September 2025. The revaluation of investment property in the year resulted in
no change in valuation during the period.
The investment property was marketed for sale prior to 30 September 2025. The
property has been reclassified as an 'asset held for sale'. The property was
sold on 27(th) February 2026 for a consideration (less fees and expenses) of
£2.8m.
9. TRADE AND OTHER RECEIVABLES
30 Sep 30 Sep
2025 2024
£000 £000
Amounts falling due within one year:
Trade receivables not past due 2,688 3,978
Trade receivables past due (1-30 days) 954 1,517
Trade receivables past due (over 30 days) 3,352 2,744
Trade receivables not yet due (retentions) 178 259
Expected credit loss (835) (520)
Trade receivables net 6,337 7,978
Contract assets 6,865 3,590
Other receivables 415 637
Warranty insurance debtor - 5,165
Prepayments and accrued income 517 977
Deferred consideration on sale of subsidiary - 1,742
Derivative asset - 247
14,134 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 recognizes 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 30 September 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 30 September 2025 and 30 September
2024 was determined as follows for both trade receivables and contract assets:
30 Sep 25 - £'000 Not yet due < 3 Months past due 3m - 12m past due > 12m past due
Expected loss rate 0% 0% 0% 78%
Carrying amount - Trade receivables 2,866 3,232 - 1,074
Carrying amount - Contract assets 6,813 - - -
Loss Allowance Nil Nil Nil 835
Historically, except for the China entity debt, the Group has recovered 100%
of receivable balances and no other 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 30 September
2025 the value of these overdue trade receivables was £1.3m. Of this balance
£0.4m was received in December 2025. These remaining amounts remain
outstanding at the approval of the financial statements. The Group therefore
made an expected credit loss provision in relation to the outstanding balances
due to its Subsidiary within China. The provision is calculated at 100% of the
exposed amount due to the age of the debt.
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 30 Sep 30 Sep
2025 2024
Opening balance 520 -
Increase in loss allowance 326 520
Impact of foreign exchange (11)
Closing Balance 835 520
10. TRADE AND OTHER PAYABLES
30 Sep 30 Sep
2025 2024
£000 £000
Current
Trade payables 5,845 5,858
Tax and social security 368 554
Accruals 1,283 1,358
Contract liabilities 445 670
Other creditors 71 63
Derivative financial liability 67 -
8,079 8,503
Trade and other payables are all current and any fair value difference is not
material. The derivative financial liability relates to forward foreign
currency contracts. Forward currency contracts are revalued using the period
end spot rate.
Contract liabilities have reduced in the year mainly due to timing of ongoing
projects, how far through the work we are versus what cash was received in
advance.
11. BORROWINGS
30 Sep 30 Sep
2025 2024
£000 £000
Current
Trade Loan Facility 2,817 3,183
Lease liability 437 371
CBILS Bank Loan 3,000 3,000
6,254 6,554
Non-current
Lease liability 594 924
594 924
2025 2024
£000 £000
Amount repayable
Within one year 6,254 6,554
In more than one year but less than two years 360 344
In more than two years but less than three years 180 351
In more than three years but less than four years 54 175
In more than four years but less than five years - 54
6,848 7,478
The above carrying values of the borrowings equate to the fair values.
2025 2024
% %
Average interest rates at the balance sheet date
Lease liability 6.36 5.92
Trade Loan Facility 6.48 7.19
CBILS Bank Loan 7.50 7.50
The CBILS Bank Loan matured on 31 October 2025 and was replaced by a GGS Loan
of £2m repayable over a period of three years. The Trade Loan Facility is
subject to annual review, 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 (note 12
of the Annual Report) 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 February 2026 and June 2029.
Cash flows from financing activities
An analysis of cash flows from financing activities is provided as follows:
Lease liabilities Loans & Borrowings
£000 £000 Total
£000
Balance at 1 October 2023 1,305 6,575 7,880
Changes from financing cash flows
Proceeds from loans & borrowings - 11,413 11,413
Repayment of Loans & Borrowings - (11,804) (11,804)
Payment of lease liabilities (514) - (514)
Total changes from financing cash flows (514) (392) (906)
Other changes
Interest expense 78 569 647
Payment of interest - (569) (569)
Adjustments to lease calculation (8) - (8)
Disposal r.e. discontinued operations (60) - (60)
New leases 494 - 494
Total other changes 504 - 504
Balance at 30 September 2024 1,295 6,183 7,478
Balance at 1 October 2024 1,295 6,183 7,478
Changes from financing cash flows
Proceeds from loans & borrowings - 11,930 11,930
Repayment of Loans & Borrowings - (12,296) (12,296)
Payment of lease liabilities (507) - (507)
Total changes from financing cash flows 788 5,817 6,605
Other changes
New leases 165 - 165
Interest expense 78 467 545
Payment of interest - (467) (467)
Total other changes 243 - 243
Balance at 30 September 2025 1,031 5,817 6,848
12. PROVISIONS & 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
£000 Warranty provision Total
£000 £000
Carrying amount at 1 October 2023 465 - 465
Additional provision - 5,821 5,821
Amounts utilised (404) - (404)
Carrying amount at 30 September 2024 61 5,821 5,882
Carrying amount at 1 October 2024 61 5,821 5,882
Additional provision 4 - 4
Amounts utilised (58) (3,906) (3,964)
Unwinding of discount - 134 134
Carrying amount at 30 September 2025 7 2,049 2,056
All of the provisions above are due to be paid within one year of the balance
sheet date.
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 two contracts in the offshore energy
division (2024: one contract) which are expected to be completed in the year
ended September 2026.
Warranty Provisions
As noted by the Group in public announcements in prior years, there has been a
historic industry-wide issue regarding abrasion of legacy cable protection
systems installed at offshore 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 RCA
investigations have not concluded that the Tekmar products are defective.
During this financial year, the Group entered commercial settlement
discussions with 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 settlements was £5.2m in full and final
settlement of the 9 claims. The provision has been estimated based on the
proposed settlement value. In addition to the above a further provision of
£0.7m was made on 30 September 2024 in respect of 2 projects. No further
provision made in year ended 30 September 2025.
Working in collaboration with the relevant customers, Tekmar negotiated a
commercial settlement with its EXPL insurance provider of £5.2m in relation
to the above claims. The insurance proceeds were received in the year and were
available for use at the discretion of the Group in settlement of the above
claims, with any unused cash repayable to the insurer. The Group has paid over
£4.1m (including fees) of the insurance proceeds received in full and final
commercial settlement, without acknowledgement of liability, on 5 of the
projects with alleged defects. In addition, 3 of the disputes were settled
without any compensation being paid leaving 2 remaining projects still subject
to final negotiation.
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 regard 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 year ended 30 September 2024. This value was shown net of the insurance
receivable in accordance with IAS 37. No further provisions have been made in
year ended 30 September 2025.
The Group incurred costs of £0.22m (FY24 £0.66m) in managing the warranty
issue.
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.
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 1 legacy project
(2024: 2) (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.
13. POST BALANCE SHEET EVENTS
On the 31 October 2025 the CBILs loan of £3m was repaid in full and was
replaced with a Growth Guarantee Scheme (GGS) loan of £2m. The GGS loan is
repayable over a term of 3 years.
On 24 October 2025, Share Capital was increased by the issue of 203,934 1p
Ordinary Shares at a price of 1p.
On 18 December 2025, Share Capital was increased by the issue of 458,716 1p
Ordinary Shares at a price of 5.45p.
On 27 February 2026, the Group sold Innovation House, a commercial property
not utilised by the Group in its current operations and previously held as an
investment property, for a net cash consideration of £2.84m resulting in
neither profit nor loss on disposal for the Group.
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. END FR EAKDNELAKEEA
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