A business review is under way at North East subsea specialist Tekmar Group after being set in motion by the firm’s new CEO.
Alasdair MacDonald moved from being the Newton Aycliffe firm’s chairman to become its chief executive in the summer, following the departure of James Ritchie-Bland who led its flotation on the Stock Exchange.
Mr MacDonald is now in the process of conducting a review of the internal operations and activities of the business, which provides subsea protection systems for the global offshore energy markets.
In a trading update ahead of publishing figures for the six months ended September 30, the board of Tekmar Group said Mr MacDonald and his executive management team are currently working through the details of a business reorganisation.
They said it will “deliver operational cost savings and further integration efficiencies across the group, putting the business on a stronger footing and in the best position to grow profitably in the expanding global offshore energy markets.”
The details of this review will be provided in the group’s half year results announcement on 1 December 2020.
During the last six months, the board said the group has experienced some short-term delays in contract awards and sales order intake as a result of the Covid-19 disruption, leading to a 10% drop in revenue compared to this time last year.
However, it said: “Notwithstanding the disruption to project timings, the visibility of the project pipeline is strong and opportunities in the offshore energy market continue to grow and the focus is now on positioning the group to maximise on this potential.
“The long-term structural growth prospect of the global offshore wind market is now attracting new entrants and the group is seeing increasing competition in Tekmar Energy’s core market for TekLink.
“However, through ongoing investment in product development, its new Generation 10 product will help the group retain its strong market position. Generation 10 will be launched in Q1 2021 and provides a more tailored solution to meet the more demanding requirements of future projects.
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“Whilst the board remains confident that the future of the business remains strong, due to the ongoing impact of COVID-19, the directors consider it prudent to continue to refrain from providing financial guidance for FY21 until patterns of demand stabilise.”
Meanwhile, the board has also changed the financial year end for the group, from March 31 to September 30.
It said the seasonality in the group’s core markets creates a peak of activity around the current financial year end and short-term delays to contracts can have a significant effect on full year results. Moving the year end, however, allows management to focus its full attention on the business during its busiest trading periods.