Tekmar Group PLC (LON:TGP) said it is now “best-placed to weather the short-term disruption to its markets and performance, caused by the [coronavirus] pandemic” following a review of its internal operations and activities, despite a hit to the business in the first half of its current year.
In its results for the six months to September 30, the provider of cable and pipe protection systems to the offshore energy sector said the pandemic had impacted its performance during the period with a “short term increase in operational costs and delays to order intake”, and as result, adjusted earnings (EBITDA) fell to £0.8mln from £2mln last year while revenues declined to £15.2mln from £17.1mln.
Tekmar also reported that its order book had fallen to £10mln from £15.9mln a year ago, however, the size of its enquiry book had increased to £225mln from £186mln.
Looking ahead, the company said the next stage of its internal review will focus on expanding its presence in the offshore wind market to “deliver shareholder value by capitalising on its market-leading position and through expansion into related offshore products and services”, although due to the short term uncertainty due to the timing of contract awards, largely as a result of the pandemic, it was unable to reinstate earnings guidance.
Despite this, Tekmar said it was confident in its prospects for the medium to long-term.
“The long-term fundamentals within the offshore wind market remain compelling. However, significant disruption has been experienced across the globe over the last eight months as a result of the [coronavirus] pandemic. The new way of working has created inefficiencies in the supply chain, slowing expected order placement schedules. This has inevitably affected our performance in the Period, compared to the previous half year, but, encouragingly, we have managed to maintain revenue from our core market, offshore wind”, Tekmar chief executive Ally MacDonald said in a statement.
“The first half of [the 2021 financial year] was one of the most demanding periods the company has faced, and we responded swiftly to the unprecedented headwinds presented by [coronavirus] by taking actions to reduce costs and protect the group’s liquidity. Whilst delays in order placement are expected to continue in [the second half of] 2021, we expect trading to improve as we emerge from the pandemic and the market bounces back”, the CEO added.
Tekmar shares rose 8.6% to 74.9p in mid-morning trading on Tuesday.