TIDMTPG
RNS Number : 4935Q
TP Group PLC
28 June 2022
28 June 2022
This announcement contains inside information
TP Group plc
("TP Group" or the "Group")
2021 Financial update
Further to the announcement on 20 June, in which it was notified
that the release of the Group's audited results for the year ended
31 December 2021 have been delayed, the unaudited information below
provides an update on the Board's current expectations for 2021,
including the anticipated restatement of the 2020 results. The
audited results for the year ended 31 December 2021 will be
released as soon as practicable subject to completion of final
audit activities.
The revenue, adjusted operating loss, operating loss, loss
before tax and loss after tax numbers presented below, for both
2021 and 2020, are from continuing operations and exclude Sapienza,
Westek and Northstar which were classified as assets held for sale
at the 31 December 2021 balance sheet date. The figures represent
the Board's current expectations, subject to completion of audit
activities.
2021 revenue increased to GBP44.4m (2020: restated
GBP39.1m).
-- TPG Services revenue increased to GBP25.8m (2020: GBP19.9m)
including 14% organic growth in TPG Services' existing business
with the balance being the full year effect of Osprey, acquired in
August 2020.
-- TPG Maritime revenue declined to GBP18.6m (2020: restated
GBP19.2m), impacted by the challenges within TPG Maritime,
previously outlined and explained further below.
2021 gross profit reduced to GBP7.5m (2020: restated
GBP8.5m)
-- TPG Services gross profit increased to GBP6.7m (2020:
GBP4.3m) a result of the revenue increase noted above and improving
margins on its existing business activity.
-- TPG Maritime gross profit reduced to GBP0.8m (2020: restated
GBP4.2m), impacted by the challenges within TPG Maritime as
noted.
2021 operating loss increased to GBP6.9m (2020 loss: restated
GBP3.3m). This includes:
-- Adjusted operating loss(1) of GBP1.0m (2020 profit: restated GBP0.9m)
-- GBP3.1m depreciation and amortisation (2020: GBP2.3m) which
includes the full year effect of Osprey and impaired capitalised
development costs
-- GBP2.7m of exceptional operating expenses which includes CEO
departure costs of GBP0.8m; corporate defence fees of GBP0.5m; and
GBP0.8m of earn-out costs relating to the Osprey acquisition (2020:
GBP0.8m)
The anticipated results set out above reflect a detailed review
of TPG Maritime contracts as part of the year end close process.
(As previously stated, this contract review work is the major piece
of outstanding audit work.) In summary, the forecast
cost-to-complete estimates have materially increased and onerous
contract provisions have had to be recognised for the period ended
31 December 2021 for a number of legacy contracts. The impact of
these adjustments to the Group has resulted in GBP5.2m less revenue
and GBP4.8m less profit being recognised in 2021 than was
originally expected. The Board has also revisited the contracts at
the period ended 31 December 2020 and, for three of these
contracts, adjustments have been made in respect of the prior
period. The impact of the prior period adjustment has been to
reduce 2020 revenue by GBP1.8m and increase cost of sales by
GBP1.0m, resulting in a reduction of adjusted operating profit in
2020 of GBP2.8m, from GBP3.7m to GBP0.9m. In aggregate, the
adjustments/provisions in relation to the onerous contracts in TPG
Maritime are anticipated to total GBP7.6m, of which the majority
relates to a single contract with a UK prime contractor.
The 2021 loss before tax is anticipated to be GBP7.4m (2020:
restated GBP3.6m). One-off loan arrangement fees increased the
finance costs by GBP0.2m to GBP0.5m year on year. Taxation was a
credit in 2021 to the income statement of GBP0.1m (2020: nil)
reducing the loss after tax to GBP7.3m (2020: restated
GBP3.6m).
The loss from discontinued operations in 2021 is anticipated to
be GBP11.0m (2020: GBP9.2m). This relates to Sapienza, Westek and
Northstar, and includes an impairment of the carrying value of
goodwill, intangible assets and net assets of each of the three
discontinued businesses to the actual or expected proceeds from the
sale.
As a result, the 2021 loss after discontinued operations is
anticipated to be GBP18.3m (2020: restated GBP12.8m).
Year-end Group cash of GBP5.4m was lower than the prior year end
position of GBP7.4m. The year-end net debt, excluding the impact of
IFRS 16, was GBP1.6m, a decline from a net cash position of GBP0.4m
at the end of 2020. The HSBC Bank GBP7.0m facility was fully drawn
at the end of both 2020 and 2021. The GBP5.0m Science Group standby
facility, put in place in December 2021, was undrawn at 31 December
2021. At 31 May 2022, cash was GBP2.4m, net debt was GBP4.6m and
the Science Group facility was undrawn.
Outlook
In terms of the Group's performance in the first part of 2022,
TPG Services (including Osprey) is operating in line with the Board
expectations and ahead of the prior year. However, the impact of
the challenges around the onerous legacy contracts means that TPG
Maritime has had a slower start to 2022 with order intake, revenue
and profit metrics below expectations for the year-to-date.
Notes
(1 Adjusted operating profit is defined as operating result
adjusted to add back depreciation of property, plant and equipment
and right-of-use assets, amortisation of intangible assets and
impairment gains or losses on non-current assets, changes in fair
value of contingent consideration, acquisition consideration
accounted for as employment costs owing to on-going service
conditions, any other acquisition-related and disposal-related
charges, share based payment charges, and exceptional operating
costs. Exceptional operating costs are those items believed to be
exceptional in nature by virtue of their size and or incidence. The
directors of the Company believe this measure is more reflective of
the underlying performance of the Group than equivalent GAAP
measures. This is primarily due to the exclusion of non-cash items,
such as share-based payments, impairment, depreciation and
amortisation, as well as acquisition and exceptional operating
costs. This provides shareholders and other users of the financial
statements with the most representative year-on-year comparison of
underlying operating performance attributable to shareholders. This
measure and the separate components remain consistent with
2020.)
Contact:
TP Group plc Tel: 01753 285802
Martyn Ratcliffe, Executive Chairman
Derren Stroud, Chief Financial Officer
www.tpgroupglobal.com
Cenkos Securities plc Tel: 020 7397 8980
Stephen Keys / Mark Connelly / Callum
Davidson
www.cenkos.com
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END
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