North East subsea engineering specialist Tekmar Group plans to raise £4m from a share placing and has reported a pre-tax loss of £5.8m ahead of what it sees as a "transition year" for the business.
The Darlington headquartered group said it will place 8,900,000 ordinary shares at a price of 45p each in a bid to raise the funds to support new contracts, invest in operational efficiency improvements, support research and development and strengthen its balance sheet.
In a results update to investors covering the 18 months to the end of September 2021, the group said challenges posed by the pandemic had caused cost pressures and inefficiencies driven by lower volumes, supply chain and logistics challenges.
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Revenue fell £47m for the extended reporting period, effectively a fall to a 12 month equivalent of just below £31.3m, down near 23.5% on the 12 months to March 31, 2020.
Chief financial officer Derek Bulmer said the firm's Offshore Energy division - including Tekmar Energy, Subsea Innovation, AgileTek and Ryder Geotechnical - saw revenue severely impacted.
But he said key contract wins in late 2021 and early 2022 - including with DEME Offshore at Dogger Bank and from a $10m Middle East project - would support the group's strategic plan as it worked through current challenges.
Tekmar said its board was "greatly encouraged by operational progress" made, and pointed to a £20.3m order book with an expectation that the second half of 2022 would deliver strong revenues.
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Alasdair MacDonald, CEO of Tekmar Group, said that while it was disappointed to have posted a loss, he thought the business had responded as well as could be expected in what remains a difficult market.
He said: "We continue to see 2022 as a transition year for Tekmar and the industry, although we are encouraged by our own momentum, with our record order book of £20.3m, and the improving activity levels across the industry.
"We have announced a number of landmark contracts that highlight the strategic progress we are making through diversification and regional expansion and reinforcing Tekmar's leading position as a trusted partner to customers.
"We have strengthened the leadership team in-line with our focus on establishing a stronger engineering culture across the business. We are investing in our technology and applied engineering offering and embedding a number of changes to our systems and processes to improve the way we run the business.
"The industry investment in our core markets provides significant forward opportunity for us, and we believe, the market will increasingly look for the integrated, engineering led solutions and services which differentiates our offering.
"Whilst cautious on the environment in the very near-term, the market outlook is very positive and we believe we are on a path consistent with the trajectory we have set out to restore sustained profitable growth from 2023 in line with our longer-term ambitions for the company."
Tekmar - which has five main operating companies in Tekmar Energy, Subsea Innovation, AgileTek Engineering, Ryder Geotechnical and Pipeshield International - highlighted increased volumes of its cable protection systems exported to China, major civil work undertaken in Canada and a strategic partnership to help it maximise growing opportunities in the US offshore wind market.