Tekmar plummets as revenues sink on preferred bidder delays

Tekmar tumbled by more than 20% on Tuesday after interim revenue plummeted following a delay in the award of preferred bidder contracts and a change in product mix.

In the six month period ended 30 September, the subsea cable protection systems provider’s revenue dropped by 38% compared to the same period a year before, coming in at £7.1m, as the company swung from a profit before tax of £15,000 to a loss of £2.6m.

Non-executive chairman Alastair MacDonald said that the company expects to generate record revenues across the full year but profits are expected to remain close to the levels seen last year due to a change in margin relating to product mix.

Cash and cash equivalents at 30 September stood at £7.6m, up from £1m at the same point the year before.

"We have extremely strong forward market visibility; Tekmar Energy is maintaining its unrivalled market share in our core market, offshore wind, having won every European array project awarded during the period; and Subsea Innovation, our first acquisition since IPO, delivered a solid performance," said MacDonald.

Tekmar floated on the AIM index at 130p in June but today sank below the 100p mark.

"Contracting activity has increased during the period and the group has a record order book of £12.9m. There has however, been a delay in the award of higher margin TekLink offshore wind contracts, on which we have preferred bidder status. Our customers have changed lead times from order placement to delivery by up to six months, deferring the signing of contracts by a similar period," said MacDonald.

The board was confident that the company will return to forecast margin and profitability in FY2020.

Tekmar’s shares were down 26.27% at 94.00p at 1100 GMT.