2024
Annual
Report
Enabling the world’s
energy transition
2
www.tekmargroup.com
3
www.tekmargroup.com
Contents
Strategic Report
6
Chairmans Statement
8
CEO Review
10
Group Financial Review
14
Strategic Review
22
S172 Statement
26
Market Review
30
Our Business Model
36
Our Business Model in Action
38
Key Performance Indicators
42
Sustainability Report
44
Get to Know Tekmar’s CEO
64
Vision, Mission and Values
68
Governance
70
Message from the Chairman
70
Corporate Governance Statement
71
The Board
77
Key Management
81
Investment Case
84
Risk Management
88
Audit Committee Report
93
Remuneration Committee Report
95
Nomination Committee Report 99
Directors’ Report
100
Statement of Directors’
Responsibilities
104
Independent Report of the Auditors 105
Consolidated Statement of
Comprehensive Income
119
Consolidated Balance Sheet 121
Consolidated Statement of
Changes in Equity
123
Notes to the Financial Statements 125
Cautionary note and disclaimer
Forward-looking statements. This Annual Report contains certain
forward-looking statements with respect to the operations, strategy,
performance, financial condition and growth opportunities of the Group.
By their nature, these statements involve uncertainty and are based on
assumptions and involve risks, uncertainties and other factors that
could cause actual results and developments to differ materially from
those anticipated. The forward-looking statements reflect knowledge
and information available at the date of preparation of this Annual
Report and, other than in accordance with its legal and regulatory
obligations, the Company undertakes no obligation to update these
forward-looking statements. Nothing in this Annual Report should be
construed as a profit forecast.
Non-GAAP measures and why we use them. Throughout this report we
present underlying reports and measures. These underlying measures
allow stakeholders to better compare the performance of the Group
between current and prior periods by removing the impact of one-off
or non-operational items. Exceptional items are explained in the Notes
to the accounts and a reconciliation of GAAP to non-GAAP measures is
also included within the report
4
5
www.tekmargroup.com
Headlines
Financial Headlines
The Group’s financial performance is improving with FY24 in-line with market expectations for the Period:
• Adjusted EBITDA of £1.7m (FY23: £0.6m) on revenue of £33m (FY23: £36m), in-line with market
expectations highlighting the successful execution of the Group’s profit improvement plan.
• Gross profit of £10.5m (FY23: £8.3m) representing a materially improved gross profit margin of 32.1%,
(FY23: 23.3%) as remaining low margin backlog from previous years has been worked through in the
offshore energy division.
• Operating loss reduced from £7.9m to £3.8m in the year, mainly reflects the profit improvement plan.
FY24 includes an impairment charge of £1.5m, a provision of £0.5m in respect of an aged debt balance
and £0.7m provision in respect of warranty claims. The prior year includes a £4.7m impairment charge.
• The Group held £4.6m of cash as at 30 September 2024 with net debt (gross cash less banking facilities)
of £1.6m. This cash position excludes the SCF Capital Partners £18m convertible loan note facility which
remains undrawn and available to drive growth through acquisitions.
• During the year, the Group completed the divestment of its subsidiary Subsea Innovation Limited (“SIL”)
for a total cash consideration to the Group of £1.9m. This divestment aligns with Tekmar’s strategy
to drive profitable growth and improve its financial performance. As at the year end £0.2m cash was
received with £1.7m being deferred.
• Order book as at the end of January 2025 of £16.4m and net debt of £0.4m.
Strategic Headlines
Strategic plan in place to achieve a step-change in scale and transformation
• Refreshed three-year strategy in-place under new CEO, Richard Turner, who was appointed in September
2024. The plan focuses on achieving greater scale through accelerated profitable organic growth and
complementary M&A.
• Robust M&A pipeline developed and the Board is actively assessing M&A opportunities.
• Warranty claims in relation to alleged CPS defects have progressed. The Group has recognised a net
charge of £0.7m in FY24 from a £5.8m provision which is largely offset by insurance monies received
post year end of £5.2m.
P.
6
P.
7
www.tekmargroup.com
6
www.tekmargroup.com
7
www.tekmargroup.com
Strategic Report
The Board has developed a strategic plan that builds on
Tekmar’s strong foundations and positions us to capitalise
on significant opportunities within the offshore wind and
broader energy sectors.
Project Aurora, our three-year roadmap, aims
to drive sustainable growth, strengthen our
market leadership, and deliver significant
value to stakeholders. We will achieve this
through:
• Leveraging our proven track record and
extensive experience.
• Expanding and enhancing our value
proposition across key markets.
• Driving innovation through dynamic
product development and digital
solutions.
• Disciplined investment in technology,
people, and capabilities.
• Maximising profitability through
operational gearing.
• Maintaining financial stability and
achieving sustainable, high-quality
growth.
• Committing to ESG principles and
delivering sustainable shareholder
returns.
This strategy is supported by three core
pillars:
1. Organic Growth: Doubling organic
revenue by expanding market reach,
cross-pollinating product lines, and
enhancing engineering services.
2. Business Improvement: Driving
profitability and achieving mid-to-high
teens EBITDA margins.
3. Mergers and Acquisitions: Accelerating
growth through strategic acquisitions,
supported by £18m in capital through
the Convertible Loan Note (CLN).
The launch of Project Aurora marks a new
chapter for Tekmar, delivering operational
excellence,
innovation,
and
market
diversification while driving long-term value
for all stakeholders.
Strategic Report contents:
Chairmans statement
8
CEO Review
10
Group Financial Review
14
Strategic Review
22
Market Review
30
Our Business Model
36
Our Business Model in Action
38
Key Performance Indicators
42
Sustainability Report
44
Risk Management
88
P.
8
www.tekmargroup.com
8
www.tekmargroup.com
9
www.tekmargroup.com
I joined the Board in April 2023, initially as
Non-Executive Director and was appointed
Chair in June 2024.
The period of time with which I have been
involved with Tekmar has strengthened
my conviction about the opportunity we
have to make Tekmar a stand-out offshore
energy business – a business that delivers
exceptional value for customers and creates
significant value for shareholders. This is
what drives us as a Board. We start from a
position of unmatched experience in the
offshore wind market and a reputation
across the broader industry for engineering
and technical excellence. Our growth strategy
builds on these strengths to create a business
of much greater scale, through both organic
growth and M&A. 2025 is where we underpin
the foundations of this growth to support
sustained and profitable growth in the years
to follow.
2024 was a year of stabilisation for the
business and for the industry more widely.
The financial results for the year reflect this,
with Adjusted EBITDA of £1.7m on revenue of
£32.8m. Both divisions were profitable at the
Adjusted EBITDA level such that the Group
overall delivered its highest level of Adjusted
EBITDA since FY20. This was achieved
through disciplined execution of projects
supporting higher gross margin.
Going
forward,
we
are
focused
on
fundamentally transforming the financial
strength of the business through organic
growth complemented by meaningful M&A.
Richard Turner was appointed as CEO In
September 2024 and has set the strategic
plan to build this value. Richard has been
involved in the energy industry for over 15
years and brings a strong track record in
driving true scale and transformation in his
previous leadership roles.
Our organic growth plan aims to deliver record
financial performance for the Group through
outperforming an improving and growing
market and benefitting from our operational
leverage.
Our M&A strategy is based on accelerating
scale and strengthening our offering through
a logical broadening of the portfolio. Overall,
the successful execution of our strategy will
build an exceptional and profitable platform
with the attributes that investors value.
One of our primary responsibilities as a Board
is to support and challenge Richard and
the team to deliver from here - to scale the
business effectively and to accelerate growth,
whilst critically making Tekmar a durable
business that will be successful “no matter
what” the path of energy transition looks like.
As we execute on these plans, we are fortunate
to draw on the experience, relationships and
insights of our Board. It is a marker of our
ambition that in 2024 we were able to secure
the appointments of Lars Bondo Krogsgaard
and David Kemp as Non-Executive Directors.
Both
bring
complementary
and
highly
relevant experience gained at large, global
organisations. That they chose to join Tekmar
highlights the scale of the opportunity we
have, and we look ahead with confidence
and renewed purpose as we unlock the true
potential of Tekmar.
During the year, and in light of the appointments
of Lars and David, Ian Ritchey and Julian Brown
stepped down from their roles on the Tekmar
Board. Julian had been a member of the Board
since the IPO in 2018, and Ian joined the Board
in 2021.
In February 2025, Alasdair MacDonald stepped
down from his position as Director of the Group.
Alasdair had been on the Board of Tekmar for
over a decade, both as Chairman and CEO.
On behalf of the Board, I would like to reiterate
our thanks to Alasdair, Ian and Julian for
their contributions to Tekmar over their
respective periods, which included supporting
the business to navigate the market-wide
challenges of recent years.
A final comment on our people. Tekmar is
dependent on the capability and commitment
of its employees. We are fortunate that our
colleagues bring unrivalled experience and
expertise to address what can often be complex
customer requirements. They demonstrate
their commitment to Tekmar on a daily basis
and this translates to long-standing service to
the business and underpins our pedigree of
engineering excellence.
This commitment to Tekmar has been
sustained as the business has navigated
its way through some challenging periods
in recent years. As a Board, we appreciate
the hard work of our colleagues as they’ve
supported our improved performance for the
benefit of all our stakeholders.
The pressures in the industry are abating and
we have a focused growth strategy to deliver
true scale for Tekmar as a leading global
offshore energy services business.
Our commitment as a Board is to be careful
stewards of capital and to promote the best
interests of Tekmar’s people and shareholders
as we position the business for long-term
success.
Thank you.
Steve Lockard
Chairman
Chairman Statement
10
www.tekmargroup.com
11
In December 2024, alongside our trading
update for FY24, we communicated to the
market a summary of our three-year plan to
transform Tekmar and realise this potential.
We are executing this plan with a business
that is positioned for growth and with great
people and strong industry pedigree. The
services we offer across the full lifecycle
of offshore energy projects from front
end engineering and design, installation,
operation and decommissioning perform a
critical role in ensuring security and certainty
of supply from offshore assets. Our holistic
offering across our protection and assurance
technology and engineering services sets us
apart in the market and puts us ahead of the
competition.
FY24 Performance and FY25 Outlook
FY24 was a transitionary year for Tekmar,
where we focused on the basics - providing
high-quality engineering, delivering on time
and
maintaining
consistent
commercial
discipline.
The Group reported Adjusted EBITDA of
£1.7m, an increase of £1.1m on a like-for-
like basis reflecting the disposal of Subsea
Innovation. The improvement in EBITDA
primarily reflects consistency of execution,
with a material improvement in gross margin
to 32% and was achieved despite market
conditions which remained challenging in
FY24. This is a stable and solid platform
against which the business can drive
profitable growth.
On a statutory basis, the Group’s result for the
period before tax from continuing operations
was a loss of £4.5m, an improvement of £4m
versus the previous year. FY24 includes an
impairment charge of £1.5m, a provision of
£0.5m in respect of an aged debt balance and
£0.7m provision in respect of warranty claims.
The prior year includes a £4.7m impairment
charge. This reflects and underlying trading
improvement of £0.8m.
The Group closed the year with £4.6m of
cash at bank (2023: £5.2m) in addition to the
availability of undrawn working capital debt
facilities of £0.8m with Barclays. The Group’s
net debt position, including all debt except
right of use property leases, was £1.6m at the
end of the financial year (2023: £1.4m).
As we look ahead, we are encouraged that
the market environment is improving and
supports sustained demand for Tekmar’s
technology and engineering services across
our markets. Moreover, we believe Tekmar’s
differentiated technology positions the Group
to outperform this improving market. This is
supported by the Group’s developing sales
pipeline, however it will take time for this
activity to convert to orders and revenue.
Accordingly,
we
believe
a
reasonable
expectation is for EBITDA for FY25 to be
consistent with FY24, and for the phasing
of EBITDA generation to be second half
weighted. This is aligned with our primary
focus on increasing order intake through
2025 to position the Group for improved
performance in 2026 and beyond.
The Company continues to maintain tight
controls on managing the cash requirements
of the business to support growth and working
capital, including disciplined capex and
targeted investment in products and services
that represent the greatest opportunity for
near-term growth.
CEO Review
I joined the business as CEO in September 2024. Having
worked across the offshore energy markets for more than
15 years, I know the Tekmar business, the customers and
supply chain. It is clear to me that Tekmar has exceptional
growth potential.
www.tekmargroup.com
12
www.tekmargroup.com
13
Accelerating the level of EBITDA and
cash generation of the Group is key in our
assessment of opportunities as we look to
build scale, strengthen the technology and
services we offer customers, and expand
our reach in targeted geographies. A robust
acquisition pipeline has been developed
and
the
Board
is
actively
assessing
complementary acquisition targets.
Ongoing legacy defect notifications
Tekmar have continued with their commitment
in working with relevant installers and
operators, to investigate further the root
cause of ongoing legacy defect notifications.
This has been undertaken without prejudice
and on the basis that Tekmar has consistently
denied any responsibility for these issues.
Given the extensive uncertainties, the RCA
investigations have not concluded that the
Tekmar products are defective.
Working in collaboration with the relevant
2 customers, Tekmar have explored the
insurance available for such matters not
withstanding Tekmar’s position regarding
responsibility and liability. In this regard,
the Group have negotiated a commercial
settlement with its EXPL insurance provider
of £5.2m in relation to the above claims. The
insurance proceeds are available for use
at the discretion of the Group in settlement
of the above claims, with any unused cash
repayable to the insurer.
Within the result for FY24 there is a net
charge of £0.7m recognised in the P&L. This
represents the net impact of the provision
of £5.8m offset by the insurance monies
received post year end of £5.2m.
The business is positioned for growth, our
markets are aligned for growth and our
strategic plan focuses on delivering this
growth.. I have a track record of driving
growth in my previous leadership roles and
we have the opportunity to do the same at
Tekmar building our financial strength. We
have renewed purpose for what Tekmar can
achieve and we look forward to updating
investors with our progress over the course
of the year.
Richard Turner
Chief Executive Officer
3 March 2025
CEO’s Review continued
Favourable
Markets
Support
Sustained
Demand for Tekmar’s Technology
The key indicators across offshore energy
markets are consistent with an improving
market environment.
In offshore wind, there is now a higher volume
of projects being sanctioned than ever
before as the market moves into recovery
and builds momentum after the challenges
of recent years. The lead indicators support
this improving trajectory, with record Final
Investment Decision (“FID”) in 2023 and
2024, with 12.3GW and 13.1GW respectively
reversing the pause in 2022 when 0.8GW
of offshore wind capacity was consented.
Linked to this, industry analysts forecast 1,000
turbines per year will be installed through
2028, increasing to 2,000 by 2030. Demand
is expanding globally, with Europe remaining
the anchor growth market, particularly the
UK. In addition, turbine OEMs are reporting
improved financial performance and cable
manufacturers
are
reporting
stronger
backlogs. Activity levels across the oil and
gas industry highlight the continued high
and sustained levels of CAPEX and OPEX,
with this investment increasingly recognised
as essential to support energy transition.
These factors in turn indicate supply chain
capacity will be stretched and supports
sustained demand for Tekmar’s technology
and engineering services.
Our three-year plan supports a step-change
in Tekmar’s scale
We have developed a three-year plan rooted
in driving significant organic growth across
the Group’s existing portfolio of products
and services, along with an iterative product
development programme and complementary
M&A.
This
addresses
the
importance
of Tekmar achieving greater scale with
significant profitability gains driven by the
benefit of operational gearing. The following
opportunities are integral to the plan:
•
capitalise on our industry pedigree and
differentiated technology to drive order
intake and outperform a growing market
•
drive higher utilisation rates across the
business, achieved through the balance
of scale of projects and duration of
projects
•
reweighting of revenue streams towards
and a shift to higher margin services
•
investment in our grouting capability
which provides compelling near-term
returns
•
incremental investment in our
technology roadmap to support product
development and market diversification
•
resolve outstanding legacy issues
relating to notifications of potential
defects
•
continued refinement of the org model
and deployment of Tekmar best practice
programme across the business.
Our M&A strategy complements the organic
growth opportunity
The organic growth plan is complemented by
the Group’s ambitious M&A strategy to deliver
additional scale and diversification. This
plan is supported by the £18m of funding
available through the SCF convertible loan
note instrument and the relevant experience
and relationships across the Board and the
broader business.
14
www.tekmargroup.com
15
A
summary
of
the
Group’s
financial
performance is as follows:
Note, due to the sale of Subsea Innovation Limited in the year,
comparative figures have been restated to exclude Subsea
Innovation Limited as this is now included as discontinued
operations in the Statement of Comprehensive Income
12M ended
Sep 24
£m
12M ended
Sep 23
£m
Revenue
32.8
35.6
Gross Profit
10.5
8.3
Adjusted
EBITDA (1)
1.7
0.6
LBT from
continuing
operations
(4.5)
(8.5)
Loss for the
period from
continuing
operations
(5.1)
(8.8)
EPS
(3.74p)
(9.2p)
Adjusted
EPS (2)
(1.00p)
(3.2p)
(1) Adjusted EBITDA is a key metric used by the Directors.
‘Earnings
before
interest,
tax,
depreciation
and
amortisation’ are adjusted for material items of a one-
off nature and significant items which allow comparable
business performance. Details of the adjustments can
be found in the adjusted EBITDA section below. Adjusted
EBITDA might not be comparable to other companies.
(2) Adjusted EPS is a key metric used by the Directors
and measures earnings which are adjusted for material
items of a one-off nature and significant items which allow
comparable business performance. Earnings for EPS
calculation are adjusted for share-based payments, £160k
(£508k FY23), amortisation on acquired intangibles £98k
(£168k FY23), Impairment of goodwill £1,546k (£4,745k
FY23), warranty provision £656k (2023: £nil), expected
credit loss £520k (2023:£nil) and other one-off items £399k
(FY23: £430k) and the tax impact of £351k (FY23: £22k).
On a statutory basis, the Group loss from
continuing operations was £5.13m (FY23:
£8.8m loss).
Overview
For the year ended 30 September 2024, the
Group reported revenue of £32.8m, reflecting
an 8% decrease compared to FY23. The
decrease in revenue is due to the Marine
Civils Division delivering lower revenue in
the period as expected against a particularly
strong prior year comparator.
Despite the revenue decrease, the Group
achieved a 27% increase in Gross Profit
to £10.5m versus £8.3m in the previous
reporting period . This improvement in margin
performance is attributable to the success
of the Group’s margin improvement action
plans which have been focused on securing
contracts with suitably attractive project
economics followed by disciplined execution
of these projects.
The Group’s adjusted EBITDA for the year
was £1.7m, compared to £0.6m in FY23. This
was primarily as a result of stronger gross
margins.
The Group’s loss before tax from continuing
operations of £4.5m has been impacted by a
goodwill impairment charge in relation to the
offshore energy division of £1.5m, net charge
to the P&L of £0.7m in relation to the warranty
related matters and £0.5m in relation to
expected credit losses discussed below.
Discontinued Operation
As part of Tekmar Group’s strategic focus
on strengthening the Group’s performance
through efficient resource allocation and
portfolio management, during the period, the
Group completed the divestment of Subsea
Innovation Limited (SIL) to Unique Group
for £1.9m. As a result of the disposal, the
financial performance of Subsea Innovation
Limited (sold in May 24) is classified as a
discontinued operation and consolidated
Group Financial Review
The Group delivered further improvement in its financial
performance in FY24, delivering the highest full-year
Adjusted EBITDA reported by the Group since FY20. This
was driven primarily as a result of significant improvement
in gross profit margins despite market conditions remaining
challenging during the period.
www.tekmargroup.com
16
www.tekmargroup.com
17
further investment in the grouting service
line offering. This diversification, which has
predominantly been in the Middle East to
date, is expected to continue as a growth area
for the Group and will be replicated in other
regions as the asset base is increased.
The gross profit for the reporting period
increased by £2.2m to £10.5m, with a
significant increase in gross profit percentage
from 23% in FY23 to 32% in FY24. The growth
in profit margins results from the Group’s
improved contracting policies and project
execution. There was also a specific focus in
the year on strategic supply chain initiatives
which further contributed to the improvement.
Within the Offshore Energy division, gross
margins increased from 17% for FY23 to 29%
for FY24. FY23 was impacted as the opening
order book included two, sizable, lower
margin offshore wind contracts awarded in
prior periods and has experienced material
cost escalations from wider macro-economic
factors since their award in 2021. One of
these contracts was substantially complete
in FY23 with the other being substantially
complete in FY24 and will have no material
impact on FY25 margin.
Gross profit margin within Marine Civils
increased to 35.9% from 29.1%. This was
primarily due to strong contribution from
variation orders in the period and also service
based income from equipment hire. Whilst
this level of gross profit margin is not expected
to be repeated in FY25 to the same extent,
the Group is focused on the diversification
of revenues to offshore services alongside
traditional
protection
and
stabilisation
product sales and has incrementally invested
in the asset base throughout the period to
support this transition.
Operating expenses
Operating expenses for the 12-month period
to 30 September 2024 were £14.4m compared
to £16.3m for the previous 12-month period
ending 30 September 2023. The decrease of
£1.9m relates largely to a goodwill impairment
relating to the offshore energy CGU of £4.7m
in the prior period versus an impairment of
£1.5m in FY24, offset by a £0.5m charge
to the P&L for expected credit losses and
£0.7m warranty provision charge to the P&L
for ongoing defect notices. Other costs have
been managed carefully and remained stable
despite the inflationary environment.
Adjusted EBITDA
Adjusted EBITDA is a primary measure used
by management to monitor and provide a
consistent measure of trading performance
from one period to the next. The adjustments
to EBITDA remove material items of a
one-off nature or of such significance that
they are considered relevant to the user of
the financial statements as it represents
a useful measure that is reflective of the
comparable performance of the business.
Foreign exchange losses and gains form
part of the adjustment to EBITDA, this is due
to the significant influence of exchange rate
fluctuations versus the Group’s reporting
currency (GBP) in FY23. The adjustment to
EBITDA for foreign exchange is also shown
in FY24 for consistency and comparability
with FY23 results. For transparency of the
FY24 result, details of foreign exchange
transactions for FY24 are highlighted below.
Group Financial Review continued
into a single line item in the Statement
of Comprehensive Income. This line item
includes the post-tax profit or loss of the
discontinued operation, as well as any gains
or losses from the sale or remeasurement of
the assets associated with the discontinued
operation.
A
loss
from
discontinued
operations of £1.3m has been recognised in
FY24, further details can be found in note 26 of
the annual report. The prior periods have been
restated to reflect the discontinued operation
ensuring consistency and comparability.
Revenue and Gross Profit
Revenue by operating segment
£m
12M
FY 24
12M
FY23
Offshore
Energy
19.5
17.3
Marine Civils
13.3
18.3
Total
32.8
35.6
Gross profit by operating segment
£m
12M
FY 24
12M
FY23
Offshore
Energy
5.7
3
Marine Civils
4.8
5.3
Total
10.5
8.3
Revenue by market
£m
12M FY 24
12M FY23
Offshore
Wind
17.1
17.7
Other
Offshore
15.7
17.9
Total
32.8
35.6
Gross profit by market
£m
12M FY 24
12M FY23
Offshore
Wind
5.5
4.8
Other
Offshore
6.0
5.1
Unallocated
costs
(1.0)
(1.6)
Total
10.5
8.3
It is encouraging to see a continuation of
revenue growth in the Offshore Energy division
during the period. Revenues in this division
increased by 13% in FY24 and 24% in FY23.
The Offshore Energy division incorporates
Tekmar Energy and Ryder business units,
both of which are beginning to benefit from
the improvement in the offshore renewables
market and a higher volume of projects being
sanctioned.
Marine Civils division experienced a decline
in revenue for the 12-month period at
£13.3m, which is £5.0m lower compared with
revenue of £18.3m for the previous 12-month
period. The prior year performance had been
particularly strong and included several large
Middle East contracts which were completed
in the prior period.
Consistent with the approach of the Offshore
Energy division, the Marine Civils division,
comprising Pipeshield International, has
focused
on
delivering
more
profitable
contracts. As a result, this has led to higher
gross margin for the division in comparison
to previous periods since acquisition, despite
the decrease in revenue in the period.
Marine Civils has continued to supply the
core Pipeshield product lines as well as
www.tekmargroup.com
18
www.tekmargroup.com
19
period. This divestment aligns with Tekmar’s
strategy to drive profitable growth and
improve its financial performance.
Profit/(loss) for the year
The result for the period is a loss of £6.6m
(FY23: Loss of £10.1m) which is shown in
the Statement of Comprehensive Income
on page 119. The result includes a £1.3m
loss attributable to the disposal of Subsea
Innovation with the loss for the period from
continuing operations being £5.3m.
Foreign currency
The Group has continued to see growth in
international markets and, as a result, this
increases the Group’s exposure to fluctuations
in foreign currency rates. During the year, the
Group was impacted by foreign exchange
losses of £0.6m. These losses have been
accounted for within operating expenses.
The Group mitigates exposure to fluctuations
in foreign exchange rates by the use
of derivatives, mainly forward currency
contracts and options. At the year end the
Group held forward currency contracts to
mitigate the risk of receivables balances for
both Euros and Dollars. Any gains or losses
on derivative instruments are accounted for
in cost of sales. At the year end the Group had
a derivative asset of £0.3m.
The Group predominately trades in pounds
sterling with its principal currency exposures
including approximately 17% of revenue
denominated in Euros and 23% denominated
in US dollars. In prior years there has been
a material level of trading in Chinese RMB
which has now reduced although the Group
had £2m billed debtors in RMB at the FY24
period end. On certain overseas projects the
Group can, in some cases, create a natural
hedge by matching the currency of the supply
chain to the contracting currency, this helps
to mitigate the Group’s exposure to foreign
currency fluctuations. The Groups net loss
from FX in FY24 is generated predominantly
from outstanding balances denominated
in RMB, the uncertainty surrounding the
recovery of these balances has resulted in
the Group being unable to effectively hedge
against these transactions which have
resulted in FX losses of c.£0.5m over the past
2 financial years.
Cashflows and Balance Sheet
A summary balance sheet is presented below:
£m
12M
FY 24
12M
FY23
Fixed Assets
4.5
6.8
Other non-
current
assets
19.6
19.4
Inventory
1.9
2.1
Trade
& other
receivables
20.3
19.7
Cash
4.6
5.2
Current
liabilities
(20.9)
(16.9)
Non-current
liabilities
(1.8)
(1.7)
Equity
28.2
34.6
Other key balance sheet items
Included within other current liabilities is a
provision of £5.1m and non-current liabilities
a provision of £0.7m. The provision covers
the warranty matters outlined in note 20 of
Group Financial Review continued
The below table shows the adjustments that have been
made to calculate adjusted EBITDA in the year ended 30
September 2024.
EBITDA
Reconciliation (£m)
12M
FY 24
12M
FY23
Reported operating
(loss)/profit
(3.8)
(7.9)
Amortisation of
acquired intangible
assets
0.1
0.1
Amortisation of
other intangible
assets
0.3
0.4
Depreciation on
tangible assets
0.9
0.7
Depreciation on ROU
assets
0.4
0.5
EBITDA
Adjusted items:
(2.1)
(6.2)
Share Based
Payments
0.2
0.5
Impairment of
goodwill
1.5
4.7
Exceptional items -
Bonus
-
0.3
Implementation of
accounting System
0.2
-
Warranty provision
0.6
-
Expected credit loss
0.5
-
Foreign exchange
losses
0.6
0.9
Restructuring costs
0.2
0.3
Adjusted EBITDA
1.7
0.6
EBITDA and Adjusted EBITDA have shown
significant improvement from FY23 in line
with our profit improvement focus. Growth in
adjusted EBITDA is attributed to the growth in
Gross Profit discussed above. Both divisions
reported positive Adjusted EBITDA for FY24,
which has resulted in an overall positive
Adjusted EBITDA for the Group in the period.
Adjusted EBITDA by division
£m
12M
FY 24
12M
FY23
Offshore
Energy
1.5
(1.2)
Marine Civils
2.9
3.5
Group costs
(2.7)
(1.8)
Total
1.7
0.6
Group costs increased by £0.9m largely due
to an increase in staff costs of £0.4m; wage
inflation and increased share based payments
related to management incentive schemes
launched, £0.2m increase in professional
fees and £0.1m higher bank facility fees.
Subsea Innovation Divestment
In May 2024, Tekmar Group plc completed
the divestment of Subsea Innovation Limited
(SIL) to Unique Group for a cash consideration
of £1.9m. This strategic move was part of
Tekmar’s broader plan to enhance its financial
stability and focus on core operations. SIL,
which specialises in subsea products and
engineering consultancy for the energy
sector, had previously reported an adjusted
EBITDA loss of £1.4m in 2023. The sale has
allowed Tekmar to reallocate resources more
efficiently and invest in growth areas. Tekmar
retained ownership of Innovation House, the
premises previously occupied by SIL. As
part of the transaction, the Group agreed
for Subsea Innovation to use the property
on a rent-free basis for a 12-month period
following Completion, with an option for both
parties to enter into a lease agreement for a
further 12 months following the rent-free
www.tekmargroup.com
20
www.tekmargroup.com
21
These amounts are not in dispute from the
customer, however given the range of possible
outcomes and duration of the outstanding
debt, the Group have made an expected credit
loss provision in relation to the outstanding
China debt of 0.5m. Further details can be
found in note 16 of the Annual Report.
All other receivables are considered to be fully
recoverable on the basis that previous trading
history sets a precedent that these balances
will be received.
Than annual impairment review of the
goodwill on the balance sheet has resulted in
an impairment charge of £1.5m (2023: £4.7m)
which related to the offshore energy division.
This was predominantly due to consultancy
element of the offshore wind division growing
below market rate as expected in the previous
year.
The net cash outflow from investing activities
was £2.0m with Group capital expenditure in
the period totalling £1.9m. These projects
primarily relate to investment in Grouting
equipment and other service-related assets
which are able to provide near term cash and
profit generation. An additional £0.2m also
related to the Group’s main manufacturing
facility.
Relating to the sale of Subsea Innovation,
the Group received £0.2m cash proceeds.
The remaining deferred consideration of
£1.7m relating to this disposal falls into FY25
and at the year-end is included within other
receivables on the balance sheet. £1.2m
of the deferred consideration has been
received since the balance sheet date with a
further £0.5m due 12-months following the
transaction date.
Net cash outflows from financing activities of
£1.6m related to £0.4m net movement on the
Group’s trade loan facility, £0.5m due to the
repayment of lease borrowings with £0.8m
attributable to interest payments on the
Group’s banking facilities.
As noted in the basis of preparation on page
142, due to the required annual renewal of our
banking facilities and the uncertain timing
of contract awards the Group has disclosed
a material uncertainty in relation to going
concern. Management remains confident
of that the relationship with Barclays and
positive growth outlook for the offshore
energy market will ensure sufficient liquidity
for the Group.
A continued focus on cash management
remains to ensure growth and working capital
can be supported as the business scales.
Summary
The
business
improvement
measures
implemented in recent years have led to a
stabilised and streamlined business with both
divisions now delivering profit at the adjusted
EBITDA level. There is a strong foundation
now from which the Group can scale and
become more resilient. The key drivers of this
being diversified revenues and cashflows,
operational gearing benefits and improving
market conditions in sectors in which Tekmar
operates.
Leanne Wilkinson
Chief Financial Officer
3 March 2025
Group Financial Review continued
the Group financial statements, with these
matters having been disclosed as contingent
liabilities
in
the
prior
year’s
financial
statements. A corresponding receivable due
from the Groups EXPL insurance of £5.2m is
included within Trade & other receivables. The
net charge in the year to the P&L is £0.7m.
Cashflows and cash balances
The gross cash balance at 30 September
2024 was £4.6m with net debt (gross cash
less bank facilities) of £1.6m. The Group’s
cash position at year end is comparable to
the prior period end, where gross cash was
£5.2m with Net debt of £1.4m.
The Group has extended its CBILs facility of
£3.0m for a further 12 months to October
2025 and the UKEF backed trade loan facility
of £4.0m remains available to Tekmar, with
the next annual review date with Barclays
Bank being in June 2025. These facilities
continue to support the working capital
requirements of the Group in delivering the
projects the Group undertakes. The expected
continued renewal of the banking facilities
forms part of the Directors going concern
assumptions which are detailed on page 101.
Of the £4.0m trade loan facility available,
£3.2m was drawn against supplier payments
at the year end and is repayable within 90
days of drawdown. The FY23 comparative
is £3.6m. The change in the value borrowed
is dependent on the timing of the loan
drawdowns and the Groups immediate
funding requirements. The trade loan facility
balance and the CBILS loan of £3.0m are
reported within current liabilities as both
are fully repayable within 12 months of the
balance sheet date.
For FY24, the Group generated cash flows
from operations of £3.3m. The main driver
of the increase was the successful recovery
of final milestone balances on completed
contracts within the Middle East region.
Historically these balances have taken longer
to be recovered.
The
Group’s
ageing
profile
for
trade
receivables
significantly
improved,
with
almost 50% of balances for FY24 being within
standard credit terms compared to 21% in the
comparative period. This benefit has arisen
from the Group’s enhanced contracting terms
and cash collection processes implemented
in previous periods.
The Group holds a debt of £2m outside of
standard credit terms with a customer in
China.
Historically the Group has recovered 100%
of receivable balances and no credit losses
have previously been accounted for. However
at the year end, the Group has made a credit
loss provision in line with IFRS9 of £0.5m in
relation to a specific historic debt in China. The
Group continues to operate in global markets
where payment practices surrounding large
contracts can be different to those within
Europe. The flow of funds on large capital
projects within China tend to move only
when the windfarm developer approves the
completion of the project. The Group has a
number of trade receivable balances, within
its subsidiary based in China, which have
been past due for more than 1 year. At 30th
September 2024 the value of these overdue
trade receivables was £2.0m, of a total
outstanding trade receivable balance for the
entity was £2.2m.
www.tekmargroup.com
22
www.tekmargroup.com
23
www.tekmargroup.com
Our extensive and unrivalled track record
includes:
•
Over 100,000 subsea stabilisation
products in service worldwide.
•
More than 10,000 Cable Protection
Systems (CPS) supplied to over
120 projects across 25 countries,
demonstrating Tekmar’s global reach and
leaders hip.
•
Delivery of 160,000+ geotechnical design
hours and 180,000+ advanced analysis
hours, underlining our technical expertise
and market-leading capabilities.
•
This foundation of proven performance,
global reach, and engineering excellence
underpins Tekmar’s ability to lead in the
offshore energy sector.
A Stable and Profitable Platform
Over the past year, Tekmar has strengthened
its foundations, establishing a stable and
profitable platform to support future growth.
Key operational and financial improvements
have reinforced our ability to deliver sustainable
results and capture emerging opportunities.
•
Operational efficiency: Enhanced
utilisation of existing capacity has
improved cost control and productivity.
•
Growing enquiry book: Robust demand
across offshore wind, oil and gas, and
marine civils has resulted in a strong and
growing pipeline.
•
Improved profitability: Focused execution
and disciplined cost management have
delivered enhanced EBITDA margins.
This stable platform provides Tekmar with the
resilience and flexibility to pursue its ambitions
with confidence, positioning us for the next
stage of our transformation.
Introducing Project Aurora
In
response
to
the
rapidly
growing
opportunities in offshore wind and the global
energy transition, Tekmar has launched
Project Aurora. This transformative three-year
strategic plan is designed to deliver scale,
resilience, and financial strength, capitalising
on Tekmar’s established leadership position.
By targeting organic growth, operational
efficiency, and market diversification, Project
Aurora provides a clear roadmap for Tekmar’s
continued success. The plan focuses on
leveraging our leading portfolio of products
and services to ensure we not only maintain
our position as the trusted global leader in
offshore energy solutions but also set new
standards of innovation and value creation in
the industry.
The global challenge to achieve net zero carbon
emissions by 2050 is driving exponential
growth in offshore wind and associated
Operations and Maintenance (O&M) markets.
Offshore wind remains at the heart of the
energy transition, and Tekmar’s solutions play
a critical role in supporting this transformation.
Project Aurora ensures we capitalise on these
trends and continue to lead the industry’s
response.
Our AMBITION is to:
•
Double Tekmar’s revenue through organic
growth, underpinned by disciplined
investment and operational synergies.
•
Achieve a sustainable mid to high teens
EBITDA margin in the later years of the
plan.
Strategic Review
Our Strategy: Delivering Growth, Scale, and Resilience
Tekmar is the leading engineering and technology company
providing innovative solutions to the offshore energy
sector. With a proven ability to deliver critical subsea
protection, stabilisation, and engineering solutions, we have
established ourselves as the trusted partner of choice for
the most demanding offshore projects.
www.tekmargroup.com
24
www.tekmargroup.com
25
www.tekmargroup.com
•
Reinforce Tekmar’s industry leadership
position as a trusted partner and solution
provider.
•
Expand Tekmar’s technical capability,
service offering, and geographical reach
to capitalise on the global offshore wind
opportunity.
•
Provide our people with the tools,
strategies, and resources needed to
deliver success.
Our VALUE PROPOSITION:
•
Superior global reach and customer
focus.
•
Solving complex engineering challenges
for clients.
•
De-risking and optimising customer
projects.
•
Enhancing safety, reliability and lowering
project costs.
Delivery of Project Aurora will enable Tekmar
to diversify further into the offshore wind
market, strengthen our financial resilience, and
establish a scalable platform for sustained
growth.
Key Focus Areas
1. Organic Growth
•
Expand across offshore wind, oil and gas,
and marine civils, building on our existing
market leadership.
•
Drive geographical growth with a focus
on Europe, USA, and the Middle East.
•
Deploy Pipeshield solutions in Europe
while expanding Tekmar Energy’s reach
in the Middle East, leveraging synergies
across the Group.
•
Enhanced high-strength grouting
solutions to enhance subsea stabilisation
capabilities.
2. Operational Gearing
•
Improve returns by increasing utilisation
rates across the business.
•
Realise profitability gains through
operational leverage and ongoing
investment in product development.
•
Transition to higher-margin engineering
services to deliver sustainable growth.
3. Scaling the Business
•
Grow product and service sales through a
targeted sales growth strategy.
•
Enhance technical capabilities and scale
Ryder to address new opportunities.
•
Develop a robust technology roadmap
to deliver innovation across all market
sectors.
4. Financial Resilience
•
Diversify revenue streams to build
sustainable earnings and reduce volatility.
•
Improve EBITDA margins and drive free
cash generation to fund growth and
strengthen reserves.
•
Deliver positive and growing returns on
capital employed.
Strategic Review continued
5. Mergers and Acquisitions
•
Our ambitious M&A strategy accelerates
growth, scale, and diversification,
complementing Tekmar’s organic growth
plans.
•
Strategic capital: Our partnership with
SCF provides access to £18m through the
Convertible Loan Note (CLN), supporting
strategic acquisitions.
•
Focused approach: The executive team
has mapped over 40 potential acquisition
opportunities, prioritised against strict
criteria.
Key criteria include:
•
Positive EBITDA and strong cash
generation.
•
Market consolidation opportunities to
strengthen Tekmar’s position.
•
Expansion into new geographies and
complementary markets.
•
Future-facing technologies with growth
potential.
•
Alignment with the “brown to green”
energy transition.
Through disciplined execution, Tekmar’s M&A
strategy will accelerate growth while delivering
value to shareholders.
Diversification: Multi-Sector Growth Strategy
Tekmar’s strategy enhances our involvement
across the entire project lifecycle, driving
growth in multiple sectors:
•
Offshore Wind: Reinforce our leadership
position while developing innovative
solutions for emerging floating wind
technologies.
•
Offshore Oil and Gas: Expand our offering
to support reliable subsea infrastructure
solutions.
•
Marine Civils: Grow our presence in port
development and coastal infrastructure
markets, where stabilisation solutions are
critical.
•
Operations & Maintenance: Leverage our
track record to grow our presence in life
extension and O&M services.
This multi-sector focus ensures Tekmar
delivers sustainable and diversified growth
across key global markets.
Building a Durable Business – Positioned for
Success
Tekmar’s
transformation
under
Project
Aurora is underpinned by strong leadership,
operational excellence, and a clear focus on
delivery:
•
Experienced leadership: A refreshed
management team, led by Richard Turner,
brings focus, expertise, and strategic
execution.
•
Results-driven Board: Our Board ensures
disciplined stewardship and drives
accountability for shareholder value.
•
Performance focus: We are committed
to profitable growth, sustainable cash
generation, and delivering strong returns
on capital.
With a solid track record, a stable platform,
and a clear strategic vision, Tekmar is well-
positioned to capitalise on global growth
opportunities and deliver long-term value—no
matter the pace of the energy transition.
www.tekmargroup.com
26
www.tekmargroup.com
27
In accordance with section 172(1) (a)-(f)
of the Companies Act 2006, a Director of
a company must act in the way he or she
considers, in good faith, would be most likely
to promote the success of the Group for the
benefit of its members as a whole. This is a
period of transition for Tekmar, with a number
of new additions to both the executive and
non-executive teams, with a core focus on a
strategy review covering the next five years
that will position the Group for success.
Particular attention has been paid to key
areas to ensure the long term success of the
Company, including:
•
The implementation of the new Group
strategy
•
The improvement of engagement with
the Group’s shareholders
•
The interests of the Group’s employees
•
The need to cultivate the Group’s
business relationships with customers
and suppliers
•
The impact of the Group’s operations on
the community and the environment
•
The desirability of the Group maintaining
a reputation for high standards of
business conduct
•
The need to act fairly between members
of the Group
The Board recognises that stakeholder
communication is critical in delivering long
term value for Tekmar. As part of the strategy
review, there has been an evaluation of
the level of engagement the Company has
achieved and the Board has agreed that
Tekmar should commit to increasing those
levels, both internally within the business and
with external stakeholders.
Shareholders
Tekmar would like to take this opportunity to
renew its commitment to ensuring improved
communication
with
the
Company’s
shareholders. Historically, the CEO and CFO
have met with institutional investors at least
on a bi-annual basis, both in person and
virtually. In the future, the Tekmar Board will
be in regular communication with the broader
shareholder base of Tekmar, including retail
investors. New avenues of communication
have commenced and include the Annual
Report and Financial Statements, the Interim
Report, the AGM and the Group’s website.
The Company also seeks improved levels
of communication with a bolstered financial
PR and Investor Relations function, the use
of the Investor Meet Company platform and
a commitment to host investors at Tekmar’s
facilities
where
appropriate.
Additional
information in relation to the Company,
garnered from these engagements will be
relayed back to the Board by the CEO and
CFO, to ensure the concerns of shareholders
are promptly addressed.
All Directors will normally attend each AGM
and shareholders are given the opportunity
to ask questions. The most recent AGM
was held on 27 March 2024. Shareholders
voted on each resolution by way of a poll,
the results of which were published on the
Company website: https://investors.tekmar.
co.uk/investors/circulars-and-notices/.
In addition to our shareholders, other key
stakeholders for Tekmar include the Group’s
employees, customers and suppliers. The
views and opinions expressed by these
Groups are crucial to the Board’s decision-
making process.
Section 172 Statement
www.tekmargroup.com
28
www.tekmargroup.com
29
Customers & Suppliers
Managing
Tekmar’s
relationships
with
customers and suppliers is of the utmost
importance to the Group as it embarks on
its new growth strategy. The Group has
several contracts with customers that relate
to longer term technology development and
supply which are supported by dedicated
account teams. The Group has a dedicated
Legal function that operates with the Group’s
commercial, project and production teams
and those of the Group’s key customers and
suppliers. It is the Board’s intention to behave
responsibly and ensure that management
operate the business in a responsible manner,
operating within the high standards of
business conduct and good governance and
in doing so, will contribute to the successful
delivery of growth. The Board receives regular
updates on our relationships with suppliers
and customers.
Environment & Community
The impact of the Group’s operations on the
community and the environment are a key
concern to the Board. Tekmar has an ongoing
commitment to sustainability, innovation, and
community engagement. 2024 has been a
remarkable period of growth and learning as
Tekmar continues benchmark itself against
industry standards and strive to set new
benchmarks for the future.
The Company strives to minimise or mitigate
any harm that it might do and actively seeks
to contribute positively to the environment
and the communities in which it operates.
In FY24 the business has undertaken a
Carbon Footprint measurement exercise, a
significant step in our sustainability journey.
The next step being undertaken FY25 is to
establish and commence delivering a carbon
reduction action plan. The business currently
holds Ecovadis Silver status accreditation
with a key priority for FY25 being progression
to Gold status, representing the company’s
commitment to sustainable and ethical
practices.
Section 172 Statement continued
The Tekmar Team
The overarching success of the Group’s
growth and ability to implement the new
strategic plans are dependent on our people,
the
Board
recognises
the
importance
of investing in our team and curating an
environment that cultivates success.
The development and retention of our people
remained a key area of focus during FY24.
The Company has been focusing its efforts
on improving rates of employee retention
over the past two years and is pleased with
the improved sustained result which shall
continue to be a key measure into FY25. This
was achieved through implementing a three-
year staged benefits refresh program and
listening to the feedback shared from the
annual employee engagement survey. The
training and development of our teams plays
a key part in this, alongside ensuring quality
performance and development conversations
are taking place.
The Group has a range of communication
channels which encourage Employee Voice,
in the form of annual surveys, employee
engagement forums, and Open Door, an
anonymous feedback and question channel.
We
are
committed
to
enhancing
our
communications and engagement strategy.
The most recent addition to this is the ‘vertical
slice’ sessions hosted by CEO Richard Turner,
whereby a cross section of employees from
across the Company have a one-hour meeting
with Richard in an open forum discussion.
HiveHR tool is utilised for employee surveying,
celebrating and recognising colleagues, and
submitting anonymous questions, concerns
or feedback.
From FY25, engagement metrics (eNPS and
engagement index) are monitored as key
measures with quarterly pulse surveys in
place. The results from the annual employee
engagement survey are used as a benchmark
to improve upon year on year. Clear action
plans are devised which highlight areas of
focus and are led by the Senior Leadership
Team with HR support to drive cultural
change and improvements.
Tekmar continues with its commitment
to focus on diversity and inclusion as it
grows, ensuring the workplace represents
the communities in which it operates. The
Group has a Business Integrity Policy that
communicates
the
expected
business
behaviours of all employees, and this policy
incorporates a whistleblowing policy, noting
an employee’s responsibility should they
become aware of inappropriate business
behaviours or any similar concern.
We are proud of Tekmar Group’s diverse
nationality mix, represented by 12 nationalities
across 133 employees, operating across
our various regions. Throughout FY25 we
are embarking upon an EDI improvement
journey, which begins with a current state
assessment of the whole Group. This leads
to the commencement of the journey, which
will be driven by leadership and will involve
awareness sessions, training, policy review
and further actions.
More information on the Company’s
approach to ESG and the efforts of the
ESG committee can be found in our
Sustainability Report on page 44. The
2023 version of the QCA Code applies
to financial years beginning on or after
1 April 2024 and therefore it will report
our approach to applying the updated
principles in our Annual Report in 2025.
www.tekmargroup.com
30
www.tekmargroup.com
31
www.tekmargroup.com
A New Era for Offshore Energy
The global offshore energy market is at a
pivotal period.
Governments worldwide are accelerating
efforts to achieve net zero emissions, and
along with this setting ambitious targets for
renewable energy deployment. Offshore wind
plays a central role in this transition. Today
there is operational capacity nearing 75 GW .
China leads with 36.2 GW, followed by the UK
(14.8 GW) and Germany (8.2 GW). Projections
indicate total capacity could reach 410 GW by
2035.[1]
Simultaneously, oil and gas remains critical
to energy security and certainty of supply,
which has undergone a resurgence due to its
criticality in the energy transition roadmap.
Recent forecasts indicate global offshore oil
and gas expenditure is expected to grow by
over 20% annually through 2025.[2]
Offshore Wind
Navigating the Offshore Wind Quadrilemma
The offshore wind industry has navigated a
challenging “Quadrilemma”:
•
Rapidly reducing Strike Prices:
Developers engaged in aggressive pricing
competition, often relying on speculative
future technology advancements and
cost reductions that failed to materialise.
This created impaired project economics
and delayed projects.
•
Macroeconomic pressures: Rising
inflation and central bank interest rate
hikes significantly increased project
costs. For instance, the Euro Area’s main
interest rate rose from -% to 4.5% within
two years.[3]
•
Cost inflation: Post covid and amidst the
Russian / Ukrainian conflict material and
energy prices soared further hampering
project economics.
•
Operational failures: Industry-wide
reliability challenges affected OPEX
costs. Insurance claims have increased
significantly in the last 10 years,
undermined confidence in operating cost
models.
These factors ultimately led to delays in
Final Investment Decisions (FIDs): with
several developers withdrawing from planned
investments and auction, for example AR5 in
the UK attracted no bidders. Despite these
hurdles, the industry has entered a period of
recovery. Strike prices have been significantly
corrected (eg UK AR6 £73 - https://www.
gov.uk/government/publications/contracts-
for-difference-cfd-allocation-round-6-
results), demonstrating recognition from the
Government of changing economic forces as
well as reinforcing their primary commitment
which is to decarbonising the energy supply
chain to achieve net zero. Furthermore,
material costs and interest rates have
stabilised and reliability is being assured by
developers adopting a more integrated, end-
to-end system design approach, ensuring a
cost effective and reliable solution.
Globally, a cumulative 119.8 GW is post-
FID (including operational projects, under
construction, and projects in construction
phase). To meet our 2035 forecast for
credible growth, an FID rate of 6.6 GW/quarter
is needed.
Market Review
The offshore energy market is undergoing significant
change, this presents Tekmar Group with a significant
opportunity to augment its market position. This outlook
explores the key trends, challenges, and opportunities in the
offshore wind and oil and gas sectors, informed by broader
market analysis.
www.tekmargroup.com
32
www.tekmargroup.com
33
Oil and Gas
The Energy Transition: Balancing Oil and Gas
with Offshore Wind
Achieving
net
zero
emissions
while
maintaining global energy security requires
a balanced approach that integrates both
renewable and traditional energy sources.
Offshore wind offers a sustainable solution
to reducing carbon emissions, while oil and
gas, in conjunction with Carbon Capture
and Storage (CCS) provide the predictability
needed to support the transition without
significant intermittency. According to the
Climate Change Committee, a pragmatic
energy mix that leverages the strengths of
both sectors is essential for meeting climate
goals. Investments in technologies like CCS
and Hydrogen and advancements in offshore
wind capacity can accelerate the shift towards
a cleaner, more resilient energy landscape.
[Climate Change Committee]
Subsea Infrastructure Spending to Surpass
$10 Billion Annually
Renewed Momentum in Oil and Gas: The
Transition Partner
Oil and gas remain a cornerstone of global
energy security, with increasing activity driven
by higher energy prices and technological
advancements.
Simultaneously,
offshore
oil and gas developments are ramping up
in regions like Brazil and the Gulf of Mexico,
with global offshore oil and gas expenditure
expected to grow by over 20% annually through
2025.[2]
Marine Civils and Ports: Enabling Offshore
Energy Expansion
The expansion of offshore energy projects
necessitates substantial investment in port
infrastructure and marine civil engineering,
presenting significant opportunities for Tekmar
Group. As the offshore wind sector aims to
increase capacity from 73.6 GW in Q3 2024 to
258 GW by 2030, ports play a pivotal role in the
assembly, transportation, and maintenance
of wind turbines and related equipment.
WindEurope estimates that approximately
€6.5 billion in port infrastructure investments
is required by 2030 to support this growth.[6]
Marine civil engineering is also experiencing
robust growth, driven by the demands of
offshore energy developments. The global
marine
(offshore)
engineering
market
was valued at USD 105 billion in 2023 and
is projected to reach USD 155 billion by
2030, growing at a CAGR of 5.96%.[7] This
growth underscores the increasing need for
specialized infrastructure to support offshore
installations.
Investments in port facilities are crucial
for the efficient deployment of offshore
wind projects, with even further investment
needed as the floating offshore wind market
grows. Enhancing port capabilities can
reduce logistics costs and streamline the
supply chain, contributing to the overall cost-
effectiveness of offshore wind energy. For
instance, investments of €0.5-€1 billion in new
port infrastructure could help the offshore
wind sector cut costs by up to 5.3%.[6]
In summary, the synergy between offshore
energy expansion and port infrastructure
development is vital. Strategic investments
in marine civil engineering and port facilities
not only support the scaling of offshore wind
and oil and gas projects but also enhance
operational efficiency and cost-effectiveness,
aligning with Tekmar Group’s objectives in the
evolving energy landscape.
Market Review continued
Winds of Change and Opportunity: A Holistic
Transformation
The offshore wind market is experiencing a
confluence of favourable developments:[5]
•
Global Expansion of Offshore Wind: While
Europe, particularly the UK, remains a
key hub, the sector is globalising with
significant growth in Asia-Pacific markets
such as South Korea, Taiwan, and Japan.
Offshore wind activity is forecast to
reach 410 GW by the end of 2035, driven
by an annual growth rate of 11.8%, with
additional buildout peaking in Europe
around 2030.
•
Floating Offshore Wind: 4C Offshore
forecasts 26.3 GW of floating offshore
wind capacity to be installed or underway
globally by 2035.
•
Global Outlook: Growth from 74.6 GW to
410 GW by 2035
74.6GW fully commissioned by region
101.4W under construction by region
36%
19%
15%
10%
3%
9%
8%
25%
36%
5%
10%
4%
5%
7%
8%
49%
20%
11%
6%
4%
3%2% 5%
119.8W under construction by region
China
United Kingdom
United States
Germany
Netherlands
Denmark
Belgium
Taiwan
Others
www.tekmargroup.com
www.tekmargroup.com
35
Over the past few years Tekmars’ growth rate has
not been in line with the offshore energy market. The
offshore energy market is now entering an exciting era,
driven by global energy transition goals and increasing
demand for reliable infrastructure. While the sector
continues to face challenges, stabilising economic
conditions and a growing commitment to sustainable
energy solutions underpin it’s long-term growth
potential, which Tekmar is well positioned to take
advantage of.
34
Charting the Future of Offshore Energy
Footnotes
1.
4C Offshore, Global Offshore Wind Report (Q4 2024).
2.
Rystad Energy, “From Shale to Offshore: Global Oil and Gas
Industry Dynamics Are Shifting” (14 August 2024).
3.
European Central Bank, Monetary Policy Reports (2023).
4.
UK Government, “Recent Offshore Wind Strike Price
Adjustments Reflecting Market Realities” (2023).
5.
Subsea World News, “Global Subsea Spending Projections
Show Promising Growth” (2023).
6.
WindEurope, “Upscaling Europe’s Port Infrastructure Critical for
Offshore Wind Development” (27 May 2021).
7.
Verified Market Reports, “Marine Offshore Engineering Market
Analysis” (October 2024).
www.tekmargroup.com
36
www.tekmargroup.com
37
www.tekmargroup.com
www.tekmargroup.com
37
Group revenues are divided into the following
sectors and subsectors. Across the Group
there are no customers that are unique to any
one business. There is potential for all Group
companies to work with all customers that the
Group engages, allowing the Group to cross-
sell all products and services; work together
to provide value to the same clients, generate
more revenue per client and to provide a
complementary range of technology and
services that support multiple stages of the
project life cycle.
As the business grows, our goal is to increase
the revenue per project from all stages of
offshore energy and marine civils projects.
We also have an aim to gain visibility on
upcoming projects as early as possible, with
our design and analysis businesses helping
us achieve this.
Sectors:
Offshore
Wind,
Oil
&
Gas,
Interconnectors, Wave & Tidal, Marine Civils,
Telecoms
Applications: Subsea Cables, Rigid & Flexible
Pipelines, Umbilicals, Seabed.
Customers: Developers & Operators, EPCI
Contractors, Product & Service Providers
Project
Phases:
DEVEX
Development
Expenditure, CAPEX Project Build Phase,
OPEX Project O&M.
Product Categories: Geotechnical Design &
Analysis, Engineering Analysis & Software
Innovation, Subsea Protection Technology,
Subsea Stability and Protection Solutions.
Locations include: UK, Europe, USA, Middle
East and Asia Pacific.
Our business model
Tekmar Group plc collaborates with its partners to deliver
robust and sustainable engineering led solutions that enable
the world’s energy transition. We have a clear strategy
focused on strengthening Tekmar’s value proposition as an
engineering solutions-led business that offers integrated
and differentiated technology, services and products to our
global customer base.
Revenue split
by region
45%
Middle East
30%
APAC
21%
Europe
2%
USA
2%
Rest of world
Revenue split
by market
52%
Renewables
48%
Other offshore
Revenue split
products &
services
90%
Products
10%
Services
58%
Offshore Energy
42%
Marine Civils
www.tekmargroup.com
38
www.tekmargroup.com
39
www.tekmargroup.com
Tekmar Group plc is a leading provider of cable
protection systems (CPS) for the global offshore
wind market. With over 10,000 CPS systems supplied
to more than 120 offshore wind projects across 25
countries, we are proud to protect over 40GW of
installed offshore wind capacity, a figure unrivalled
across the industry. Our ability to deliver integrated
subsea cable protection solutions that overcome
challenging offshore environments sets us apart. By
combining in-house technology, advanced engineering
capabilities, and decades of experience, Tekmar
ensures that every project benefits from informed,
engineering-led decisions grounded in simulation,
analysis, and proven expertise.
Tekmar Energy, part of Tekmar Group plc, was awarded
a contract to design, manufacture, and deliver a subsea
cable protection solution for one of the world’s largest
offshore wind farms. The CPS was required to protect
the wind farm’s inter-array cables when transitioning
from the seabed to the offshore foundations. Due to the
project’s challenging subsea conditions, an additional
solution was needed to secure the CPS and cables on
the seabed to prevent movement and avoid damage.
This was achieved through an integrated approach to
the engineering design phase within the overall project
lifecycle.
Working alongside RYDER, Tekmar Energy developed a
CPS design premise and a basis for analysis aligned to
the project specifications and site conditions. A system
was subsequently designed by Tekmar Energy, based
on the company’s proven Generation 10 TekTube CPS
technology.
During the initial design phase, advanced simulation
tools were used to model how the CPS would perform
in its offshore environment. This was supported by
RYDER, which contributed geotechnical expertise to
design a stabilisation solution. A rock berm installation
was recommended to secure the CPS on the seabed.
Using cutting-edge geotechnical engineering software,
RYDER optimised the design to minimise the volume
of rock material required, significantly reducing the
project’s CAPEX while meeting all performance criteria.
The CPS was manufactured at Tekmar Energy’s state-
of-the-art facility in the North East of England. Before
commencing production of over 2,300 components,
Tekmar Energy created prototypes of each component
and subjected them to rigorous testing, including
impact, bend, and axial load tests, to verify performance.
Full-scale pull-in tests were performed on a 30-metre-
long CPS assembly using the facility’s advanced pull-in
rig. Factory Acceptance Tests (FAT) were then carried
out on all pre-assembled CPS sections before packing
and delivery to the customer.
The final solution was a robust, maintenance-free
cable protection system engineered to meet the
project’s specific site conditions and ensure reliability
throughout the wind farm’s lifecycle. By eliminating
the need for OPEX-heavy interventions, the solution
offered significant long-term savings to the customer.
Tekmar’s integrated approach provides complete
visibility across the CPS design and delivery process.
This collaboration between Tekmar Energy and RYDER
ensures seamless communication, rapid problem-
solving, and enhanced optimisation opportunities at
every stage of the project. For customers, this single-
interface approach eliminates third-party delays,
reduces risks, and ensures efficient delivery of the
optimal solution.
Our operating companies share a unified vision and a
commitment to delivering industry-leading solutions
for the offshore wind sector, reinforcing Tekmar
Group’s position as the trusted partner of choice for
global offshore wind projects.
Our business model
in action
Unrivalled in Offshore Wind
www.tekmargroup.com
40
www.tekmargroup.com
41
www.tekmargroup.com
Tekmar Group companies Pipeshield International
and Ryder collaborated to deliver an advanced scour
protection solution for a leading port authority. Drawing
on Tekmar’s extensive track record, which includes
over 100,000 subsea stabilisation products in service
and more than 340,000 engineering hours logged, the
team provided a cost-effective and environmentally
sustainable solution that addressed the unique
challenges of this project.
The integrated approach comprised three key projects:
Vessel Study
By combining tidal and vessel tracking data (AIS), the
team reduced uncertainty in the design parameters
through high-level data analysis. This enabled the
consideration of different vessel sizes and revealed
that the ‘maximum design vessel’ provided by the client
was not necessarily the worst-case scenario for seabed
stability. The analysis showed that larger vessels
tended to un/berth during higher tides, and the most
onerous vessels, regardless of size, were identified.
This insight ensured that the scour protection design
was tailored to actual vessel behaviour, reducing over-
conservatism in the design process.
Mattress Stability
Following PIANC (2015) guidelines, RYDER assessed
the stability of the mattress under propeller and
thruster action generated by the most onerous vessels
identified in the study. The results confirmed that rock
bags would be required along the quay wall to mitigate
thruster effects. These rock bags were shown to be
stable against the quay wall, while the mattresses
themselves were stable under propeller action and
metocean conditions. However, the study highlighted
that some vessel input parameters had been estimated
using generalised equations and that the Coefficient
of Lift for the mattress units was not well-defined,
necessitating further verification.
3D CFD Study
RYDER conducted a two-stage Computational Fluid
Dynamics (CFD) analysis using OpenFOAM to recreate
on-bottom conditions and simulate worst-case flows
generated by the most onerous vessel combined with
metocean conditions. The results demonstrated the
efficiency of Pipeshield’s N2 edge block design, which
produced a negative Coefficient of Lift. This induced a
positive restoring moment at the top of the edge block,
ensuring stability.
The study also found that the Coefficient of Lift for the
central blocks in the mattress stability report was overly
conservative, revealing an additional safety factor of
1.3 on top of the already applied 1.5. Furthermore,
a Python database of vessel inputs showed that
the
mathematical
methods
used
to
estimate
vessel properties, such as propeller diameter, were
overestimated. This led to increased conservatism in
the design and confirmed that the scour protection
solution was robust under real-world conditions.
The Result
The solution provided by Pipeshield and RYDER
demonstrated a seamless integration of expertise
across Tekmar Group to deliver a tailored scour
protection system. By leveraging the Group’s combined
knowledge and advanced analysis capabilities, the
team achieved a design that was both cost-effective
and
environmentally
sustainable.
The
project
exemplifies how Tekmar Group’s operating companies
collaborate to provide innovative, efficient, and reliable
solutions to complex offshore challenges.
Our business model
in action continued
Delivering Advanced Scour Protection for a Leading Port Authority
www.tekmargroup.com
42
www.tekmargroup.com
43
www.tekmargroup.com
Key Performance Indicators (KPIs) such as Revenue, Order Intake, Order Book, Adjusted EBITDA and net cash /
(debt) are crucial in assessing Tekmar Group PLC’s performance. Revenue reflects the total income generated
from sales, indicating the company’s market demand and operational efficiency. Order Intake measures the
value of new contracts awarded within a period, showcasing the company’s ability to secure new business.
The Order Book represents signed and committed contracts, providing insight into future revenue streams and
business stability. Adjusted EBITDA (Earnings before interest, tax, depreciation, amortisation and significant one
off items, as defined in CFO review.) offers a clear view of the company’s operational profitability by excluding
non-operational expenses, thus highlighting core business performance.
Key Performance
Indictators
KPI
FY22
FY23
FY24
Order Book (1)
£15m
£16.7m
£16.3m
Revenue (2)
£25.6m
£35.6m
£32.8m
Gross profit %
23%
23%
32%
Order Intake (3)
£33.2m
£37.4m
£32.4m
Adjusted EBITDA (4)
£(2.3)m
£0.6m
£1.7m
Net cash/(debt) (5)
£1.5m
£(1.4)m
£(1.6)m
(1) Order Book is defined as signed and committed contracts with clients.
(2) Revenue is the value of sales recognised in the financial statements in the year.
(3) Order intake is the value of contracts awarded in the in the year.
(4) Adjusted Earnings before interest, tax, depreciation, amortisation and significant one off items, as defined in CFO review.
(5) Net cash / (debt) represents total cash less banking facilities.
Note – comparatives have been restated to remove Subsea Innovation Limited.
P.
44
P.
45
www.tekmargroup.com
44
www.tekmargroup.com
45
www.tekmargroup.com
Throughout 2024, we have worked diligently to advance our
Environmental, Social, and Governance (ESG) initiatives,
with a particular emphasis on understanding and action
planning to improve our carbon footprint. As a result of
this, one of our key achievements this year was conducting
a comprehensive carbon measurement management
exercise, supported by an independent third party, allowing
us to gain clearer insights into our environmental impact
and identify areas for further improvement. This effort
marks an important step in our journey, and we are proud
of the progress made.
Following on from our Educational Links programme
established in 2023 and subsequent collaborations, we have
also been actively engaged in our community, supporting
and participating in several STEM events with local colleges
and schools. These initiatives are not just about inspiring the
next generation of engineers and scientists but also about
fostering a culture of innovation and sustainability. Our
commitment to STEM was recognized when Tekmar Group
was named one of the most inspirational companies in the
North East by the North East STEM Awards, a testament to
our efforts in promoting education and career opportunities
in science, technology, engineering, and mathematics.
Linked to this, at the same event, we were immensely
proud of our own Dawn Gaskins who received
a Special Recognition Award, highlighting her
dedication and contributions to our sustainability
and ESG initiatives. Dawn’s leadership and passion
have been pivotal in driving our projects forward, and
her recognition is a proud moment for all of us at
Tekmar Group.
In addition to our STEM activities, we joined hands
with communities worldwide to participate in World
Clean Up Day 2024. This global event underscored
our commitment to environmental stewardship
and allowed our teams to actively contribute to a
cleaner and healthier planet. Such initiatives reflect
our broader philosophy of making a positive impact,
not only through our products and services but also
through our actions within the communities we serve
and collaboration with our value chain.
The world has faced unprecedented challenges
in recent years, resulting in protracted impacts on
companies like ours. Understandably, our journey in
this time has included rebuilding strong foundations
in our business as well as financial resilience.
Ultimately, Tekmar as an organisation which will
continue to grow sustainably alongside our end
markets to meet the ever increasing global energy
demand.
We are proud of the business we have today and that
in tandem with the business improvement measures
implemented and strengthened governance
and controls, we have also been able to provide
prosperity for our wider stakeholders including our
employees, industry and local community.
While we recognise that we are still at the early
stages of our sustainability journey, 2024 has
been a year of significant progress. We have set
ambitious goals, benchmarked ourselves against
peers, and taken key actions to go further than we
ever have before. Our focus remains on continuous
improvement, and we are excited about the future
as we deepen our commitment to sustainability and
ESG excellence.
I invite you to explore this report to learn more about
our initiatives, achievements, and the steps we are
taking to contribute to a more sustainable future.
Finally, I would like to thank the ESG leads and STEM
ambassadors who have been instrumental in driving
our plans forward and to the wider Tekmar team for
their support to our initiatives this year.
Leanne Wilkinson
Chief Financial Officer / ESG Committee
Chair
Dear valued stakeholders,
I am pleased to introduce Tekmar Group’s 2024
Sustainability Report, a reflection of our ongoing
commitment to sustainability, innovation, and community
engagement. This year has been a remarkable period of
growth and learning in our sustainability journey as we
continue to understand our impacts and dependencies on
society and strive to set new goals for the future.
Sustainability
Report 2024
P.
46
P.
47
www.tekmargroup.com
47
www.tekmargroup.com
46
www.tekmargroup.com
Meet the Environmental,
Social and Governance
Committee
The ESG Committee at Tekmar Group is dedicated to driving our
environmental, social, and governance initiatives, ensuring alignment
with our vision to enable the world’s energy transition and uphold our
commitment to sustainable and responsible growth.
The ESG Committee at Tekmar Group is a diverse
and dynamic team that brings together individuals
from across all areas of our business. This broad
representation ensures that our environmental,
social, and governance initiatives are inclusive and
reflective of our entire organisation.
By leveraging the unique perspectives and
expertise of our team members, the committee
can identify opportunities, address challenges, and
drive impactful ESG strategies that align with our
company vision and values. Each member of the
ESG Committee focuses on a specific aspect of
ESG, enabling us to address these critical areas with
precision and depth.
From environmental stewardship, such as reducing
our carbon footprint and enhancing sustainability
practices, to social initiatives that support our
communities and promote diversity, equity,
and inclusion, every member plays a vital role.
Committee members are dedicated to ensuring
our governance practices meet the highest ethical
standards, providing transparency and accountability
across all levels of our operations. Together, this
multidisciplinary approach ensures a holistic and
integrated focus on ESG.
We are deeply grateful to our ESG Committee
members for their dedication and contributions,
which have been key to advancing initiatives like
STEM programs and sustainability benchmarking.
Their efforts embody the collaborative spirit of
Tekmar Group and drive our progress.
In addition to our ESG Committee, we have additional
employees who have supported the Company’s ESG
initiatives throughout the year.
As we celebrate this year’s achievements, we
recognise the vital role they play in our sustainability
journey.
1
Chief Financial Officer / ESG
Committee Chair
Leanne Wilkinson
3
Head of People / Social Lead
Chloe Ainsworth
2
Supply Chain Manager /
Environmental Lead
Lewis Barnes
6
General Counsel / Company
Secretary / Governance Lead
Tallulah Whitewood-
Spedding
P.
48
P.
49
www.tekmargroup.com
48
www.tekmargroup.com
49
www.tekmargroup.com
Our vision, “To enable the world’s energy
transition, reflecting our responsibility to
future generations,” serves as a beacon for
our ESG strategy. In a world where the shift
towards cleaner, renewable energy sources
is imperative, Tekmar Group is dedicated to
being at the forefront of this transformation.
This vision is not just about technological
advancement;
it
embodies
a
broader
commitment to creating a sustainable future.
We understand that our actions today have far-
reaching implications, and we are determined
to play a pivotal role in reducing environmental
impact and promoting a cleaner, greener
planet for generations to come.
Our ESG initiatives are aligned with this vision,
focusing on minimising our carbon footprint,
developing sustainable technologies, and
supporting the global move towards renewable
energy. Whether it is through pioneering new
ways to make our products more energy-
efficient
or
participating
in
community
initiatives
that
promote
environmental
awareness, our vision drives us to act
responsibly and sustainably.
Our mission speaks to our commitment to
collaboration and innovation: “Collaborating
with our stakeholders, we will deliver robust,
sustainable technology and services utilising
our talented and diverse team that will
enable the Group to grow significantly and
profitably.” This mission emphasises two
critical components of our ESG approach:
stakeholder engagement and sustainable
growth.
We believe that sustainability is a collective
effort. By actively collaborating with our
customers,
partners,
and
communities,
we can create solutions that address both
economic and environmental needs. This
collaborative approach ensures that our
technologies not only meet current market
demands but also contribute to a long-term,
sustainable future. Our mission guides us
to continuously innovate and adapt, pushing
the boundaries of what is possible while
ensuring that our growth benefits both our
stakeholders and the planet.
At Tekmar Group, our commitment to Environmental,
Social, and Governance (ESG) excellence is deeply
rooted in our core vision, mission, and values. These
guiding principles shape every decision, action, and
initiative we undertake, ensuring that our efforts
contribute to a more sustainable future.
How Tekmar Group’s Vision, Mission, and
Values Drive Sustainability
P.
50
P.
51
www.tekmargroup.com
50
www.tekmargroup.com
51
www.tekmargroup.com
Moreover, our mission highlights the importance of
utilising the diverse skills and talents of our team.
Diversity, equity, and inclusion are key components
of our social responsibility. By fostering a
workplace that values varied perspectives, we can
develop more creative and effective solutions that
meet the needs of a changing world.
Values: The Foundation of Our ESG Approach
Our values – Work Together, Do Things Right,
Break the Boundaries – serve as the foundation
for how we approach ESG initiatives, ensuring that
every effort is aligned with our broader purpose.
Work Together: Collaboration for a Sustainable
Future:
“Work Together” underscores the importance of
teamwork and collaboration without boundaries.
We believe that the best solutions come from
a collective effort, where every individual feels
empowered, safe, and inspired. This value drives
our approach to ESG by fostering partnerships that
extend beyond our organisation. Whether we are
engaging with local communities through STEM
initiatives or collaborating with global partners on
sustainability projects, working together ensures
that our ESG efforts are inclusive, impactful, and
far-reaching.
Internally, this value promotes a culture where
our team members are encouraged to contribute
ideas, voice concerns, and take ownership
of sustainability initiatives. By nurturing an
environment of trust and confidence, we empower
our team to drive positive changes, both within the
organisation and beyond.
Do Things Right: Integrity and Excellence in
Sustainability
“Do Things Right” reflects our commitment to
quality, integrity, and ethical conduct. We believe
that sustainability is about more than compliance;
it is about setting a higher standard and leading
by example. This value drives us to challenge
the norm, innovate responsibly, and ensure that
our products and services are delivered with the
utmost quality and efficiency.
In practice, this means implementing rigorous
sustainability measures across our operations,
from reducing waste and emissions to adopting
ethical sourcing practices. We are committed to
transparency and accountability in all that we do,
and this commitment is a core element of our ESG
strategy. By doing things right, we build trust with
our stakeholders and demonstrate that profitability
and sustainability can, and must, go hand in hand.
Break the Boundaries: Innovating for Tomorrow’s
Solutions
“Break the Boundaries” captures our spirit of
innovation and ambition. At Tekmar Group, we
are constantly looking for new ways to develop
technologies that make what seems impossible
today a reality tomorrow. This value drives our
efforts to push the boundaries of sustainable
technology, seeking out solutions that not only
meet current demands but anticipate future
challenges.
Our dedication to innovation is evident in our
ongoing efforts to improve the energy efficiency
of our products, explore renewable energy
applications, and invest in research and
How Tekmar Group’s Vision, Mission, and
Values Drive Sustainability
development that supports the global energy
transition. By continuously seeking new ways to reduce
environmental impact and enhance sustainability, we
are not just adapting to change – we are leading it.
Explore this year’s case studies overleaf, to see how
our ESG initiatives, from STEM collaborations to
sustainability advancements, are driving meaningful
impact and reflecting Tekmar Group’s commitment
to a sustainable future.
P.
52
P.
53
www.tekmargroup.com
52
www.tekmargroup.com
53
www.tekmargroup.com
Looking back
2024 highlights
Tekmar Group
Celebrates Success at
the North East STEM
Awards
We are incredibly proud of the achievements
and milestones we’ve reached throughout 2024,
each reflecting the dedication and passion of our
employees and the impact of their efforts. These
highlights showcase not only our commitment to
sustainability and innovation but also the positive
influence we’ve had on the communities we serve.
We are deeply grateful to our team members who
have supported these initiatives, volunteered their
time, and brought their energy to every event. Their
contributions embody the values of Tekmar Group
and drive our mission to create lasting, meaningful
change.
1
We continued inspiring the next
generation by participating
in Darlington STEMFEST,
engaging with young minds and
promoting careers in STEM.
2
As Silver Members of the
North East STEM Foundation,
we supported its mission
through monthly donations
and participated in the Primary
Schools STEM Challenge in
June.
3
We strengthened our
partnership with UTC as
official employer partners and
participated in our first Industry
Project, where the team
working on a Tekmar project
won.
4
Tekmar Group was nominated
for ‘The Most Inspirational
North East Engineering
Employer,’ and Dawn Gaskins
won the ‘Special Individual
Recognition Award for
Outstanding Contribution’.
Highlights
5
In our commitment to
developing homegrown
engineering talent, Tekmar
successfully completed its first
graduate onboarding, selecting
four graduate engineers from
over 300 applicants.
6
We hosted two wellbeing
walks, promoting employee
wellness while supporting
employee-chosen, REMAP in
June and Niemann-Pick UK
in October, combining team
bonding with charitable giving.
In October, Tekmar Group announced its recognition
at the RTC North, North East STEM Awards, where
the company was nominated for “Most Inspirational
North East Engineering Employer,” and Dawn Gaskins,
Senior Project Coordinator at Tekmar Energy, was
honored with the Special Individual Contribution
Recognition Award.
“I’ve been so passionate about working with
the next generation over the last few years and
our ambassadors and wider team at Tekmar
by investing our time offering workplace visits,
work experiences and going out into the region
doing STEM events like #STEMFEST and
#NESF STEM events at Yarm School and the
upcoming STEM event at Hartlepool College in
November, alongside setting Industry Projects
for the year 10 and 12 students at UTC it’s been
a busy and worthwhile few years!
Dawn Gaskins, Senior Projects Co-Ordinator
These achievements highlight Tekmar Group’s
ongoing
commitment
to
fostering
innovation,
supporting STEM initiatives, and inspiring future
generations of engineers across the North East.
The acknowledgment underscores the dedication
and hard work of the Tekmar team in promoting
STEM engagement through educational programs,
community outreach, and mentorship opportunities,
solidifying the company’s role as a leader in the
engineering industry.
7
We conducted a carbon
capture analysis to explore
innovative ways to offset
our emissions, further
strengthening our commitment
to sustainability and
environmental responsibility.
8
We continue to support our
Manufacturing Operations
Engineering apprenticeship,
with our apprentice
progressing into his third year
of training.
P.
54
P.
55
www.tekmargroup.com
54
www.tekmargroup.com
55
www.tekmargroup.com
Wellbeing Walks:
Supporting Employee
Wellness and Charitable
Causes
At Tekmar Group, our Wellbeing Walks embody our
commitment to combining employee wellbeing
with meaningful community impact. Recognising
that physical and mental health are essential
for a thriving workplace, we actively encourage
initiatives that promote wellness, teamwork, and
social responsibility. Our Wellbeing Walks provide
an opportunity for employees to take a break from
their daily routines, connect with colleagues in a
relaxed setting, and engage in physical activity—
all while supporting important charitable causes.
In June, our team walked 8 miles to support REMAP,
a charity that transforms lives by creating custom
equipment for people with disabilities. Similarly, in
October, we embarked on a 7.7-mile walk to raise
awareness and funds for Niemann-Pick Disease,
a rare genetic disorder, inspired by our colleague
Dawn Gaskins’ personal connection to the cause.
By matching employee donations for both events,
Tekmar Group amplified the positive impact of
these initiatives, reinforcing our commitment to
social responsibility and community engagement.
These walks not only strengthened our team’s sense
of community but also demonstrated how employee
wellbeing, teamwork, and ESG principles can come
together in a meaningful way. By bringing people
together outside the workplace, we foster a supportive
and inclusive culture where employees feel valued and
engaged. Encouraging participation in initiatives like
these helps to build connections, promote a healthy work-
life balance, and reinforce the importance of giving back.
“It’s fantastic to see so many colleagues come
together for a great cause while also promoting
physical and mental wellbeing. These walks
aren’t just about raising money—they help
build relationships, encourage teamwork, and
give us all a chance to reset outside of the
work environment. I’m proud to be part of an
organisation that supports both its employees
and the wider community in such a meaningful
way.”
Steven Roberts, AR Project Co-Ordinator
We are incredibly proud of our employees’ generosity
and enthusiasm and look forward to continuing these
impactful efforts in the years to come.
A Journey of Success and
Innovation
Tekmar Group is proud of our ongoing partnership
with UTC South Durham, which began in 2022. Over
the past three years, our collaboration has grown,
driven by a shared commitment to inspiring and
developing future engineering talent. We aim to bridge
the gap between education and industry, equipping
young people with the skills and confidence to thrive
in STEM careers.
This year, we deepened our involvement by becoming
an official employer partner, reinforcing our dedication
to real-world learning experiences. Our first UTC
Industry Project was a great success, with students
tackling a live Tekmar challenge and showcasing
impressive technical and problem-solving skills. We
were especially proud when the team working on a
Tekmar project won, demonstrating the potential of
these young engineers.
At Tekmar, we are committed to developing future
engineers and will continue to expand our engagement
with UTC South Durham, offering more projects,
mentoring, and hands-on experiences to nurture the
next generation of STEM talent.
Beyond projects, we support students through career
guidance, industry talks, and hands-on learning,
helping to inspire interest and build confidence in
STEM careers. Catherine Purvis Mawson, Principal
of UTC South Durham, emphasised the value of such
partnerships:
“Forming relationships with companies like
Tekmar Group is crucial for our students. It
provides them with exposure to real-world
applications of their studies and opens
pathways to exciting careers in STEM fields.
We are grateful for Tekmar’s commitment to
our students’ development and their continued
support in making STEM accessible and
appealing.”
Catherine Purvis Mawson
Principal of UTC South Durham
P.
56
P.
57
www.tekmargroup.com
56
www.tekmargroup.com
57
www.tekmargroup.com
World Clean Up Day 2024
Tekmar Group proudly participated in World Clean
Up Day 2024, a global initiative dedicated to tackling
pollution and promoting environmental responsibility.
Organised by Let’s Do It World, World Clean Up Day
unites millions of volunteers across 190 countries in
a collective effort to remove waste, raise awareness,
and drive positive change in local communities.
As part of our commitment to sustainability, a team
of Tekmar Energy volunteers took time to clear litter
around our manufacturing site and head office in
Newton Aycliffe. This initiative reflects our company
values—Do Things Right, Break Boundaries, and Work
Together—showcasing our dedication to taking action
beyond our day-to-day responsibilities.
A special thank you goes to Liam Bettinson and
Joe Lincoln, whose leadership was instrumental in
organising the event and bringing our team together.
Their efforts demonstrate how collective action can
make a meaningful difference in our communities.
Liam Bettinson reflected on the day’s success:
“It was fantastic to see so many colleagues
come together for a shared goal. Small actions
like this have a big impact, and it’s great to
work for a company that supports initiatives
that give back to the environment and local
community. Hopefully, this is something we
can continue to build on in the future.”
Liam Bettinson, Commercial Manager
World Clean Up Day is more than just a one-day event—
it is a reminder of the responsibility we all share in
protecting our environment. Tekmar Group remains
committed to sustainable business practices and will
continue to seek opportunities to support global and
local initiatives that contribute to a cleaner, healthier
future.
Tekmar Group’s Annual
Food Bank Donation to
Junction 7
As part of our ongoing commitment to supporting
local communities, Tekmar Group once again
contributed to Junction 7’s crisis intervention project
through our annual food bank donation. Junction 7
provides emergency food, preloved school uniforms,
furniture assistance, financial support, and guidance
to individuals and families facing hardship. Their work
plays a vital role in offering immediate relief to those
in need, particularly during the winter months when
financial pressures often increase.
In winter 2024, Tekmar employees came together
to donate several crates of essential food items,
ensuring that those experiencing crisis had access
to much-needed supplies. This initiative reflects our
company values—Do Things Right, Break Boundaries,
and Work Together—demonstrating the importance
of collective action in making a positive impact.
A key part of Tekmar’s sustainability and social
responsibility efforts is to give back to the communities
where we live and work. By partnering with Junction
7, we aim to help address food insecurity and provide
support to individuals and families facing difficult
circumstances.
Lynn Hood, HR Business Partner at Tekmar
Group, highlighted the importance of this
initiative, saying:
“Supporting Junction 7 is something we are
incredibly proud of. It’s about more than just
donating food—it’s about showing solidarity
with those facing difficult times in our
community. The generosity of our employees
speaks volumes, and it’s fantastic to see
how willing people are to help make a real
difference.”
Lynn Hood, People Business Partner
Tekmar Group remains committed to continuing our
support for Junction 7 and other local initiatives,
ensuring that we play an active role in making a
difference in the lives of those in need.
P.
58
P.
59
www.tekmargroup.com
58
www.tekmargroup.com
59
www.tekmargroup.com
For the first time, Tekmar Group has comprehensively
measured its carbon emissions, marking a significant
milestone in our sustainability journey. Understanding
our environmental impact is the crucial first step in
reducing it, and with this knowledge, we have now
developed a Carbon Reduction Plan to guide our
efforts. Our goal is clear: to achieve Net Zero emissions
by 2050, aligning with global climate commitments
and ensuring a sustainable future for our business,
stakeholders, and future generations.
Our plan is built on science-based targets (SBTs), which
set clear reduction goals in line with the latest climate
science. This means reducing our absolute emissions
by 90% from our baseline year before neutralising
any remaining emissions through verified carbon
offsets. To achieve this, we have outlined a structured
approach to lower emissions across Scope 1, Scope 2,
and Scope 3, setting measurable targets that will drive
real progress towards decarbonisation.
Our Commitment to Carbon Reduction and
Net Zero
At Tekmar Group, sustainability is at the heart of our
business strategy, and we are committed to achieving
Net Zero emissions by 2050. To meet this ambitious
goal, we have developed a Carbon Reduction Plan that
aligns with science-based targets (SBTs) to ensure
our efforts contribute meaningfully to global climate
action. Science-based targets require companies to
set greenhouse gas reduction goals that align with
the reductions necessary to limit global temperature
rise to 1.5°C above pre-industrial levels. Under this
framework, we aim to reduce our absolute emissions
by 90% from our baseline year before neutralising any
residual emissions with verified carbon offsets.
Our Carbon Reduction Targets
To ensure measurable progress, we have established
the following near-term and long-term targets:
Near-Term Target: Achieve Net Zero Scope 1 emissions
by 2030.
Long-Term Target: Reduce our total Scope 1, 2, and 3
emissions by at least 90% by 2050 and neutralise any
remaining emissions through verified carbon offsets.
Future Scope 2 & 3 Targets: We will set near-term
targets for Scope 2 and Scope 3 emissions in the
coming year once we have fully quantified a greater
portion of our Scope 3 footprint.
Understanding Our Carbon Footprint
To drive meaningful change, it is crucial to understand
where our emissions come from. We conducted
a comprehensive carbon footprint assessment
following the Greenhouse Gas (GHG) Protocol, which
categorises emissions into three scopes:
Scope 1: Direct emissions from sources owned or
controlled by Tekmar Group, such as fuel combustion
in company vehicles and facilities.
Scope 2: Indirect emissions from purchased electricity,
steam, heating, and cooling used in our operations.
Scope 3: Indirect value chain emissions, including
upstream and downstream activities such as employee
commuting, business travel, supplier transportation,
purchased goods and services, and product lifecycle
impacts.
Baseline Emissions Measurement
A baseline emissions measurement provides a
reference point against which future reductions can be
measured. Tekmar Group has set 1st October 2022 –
30th September 2023 as our baseline year, marking our
first carbon reporting period. Our emissions have been
measured using the operational control approach,
ensuring we account for all Scope 1 and Scope 2
sources, as well as key Scope 3 categories.
For Scope 3, we have quantified emissions from:
•
Fuel- and energy-related activities
•
Upstream transportation and distribution
•
Waste generated in operations (including water-
related emissions)
•
Business travel (including hotel-related emissions)
Employee commuting (including homeworking-
related emissions)
We have not yet quantified emissions from:
•
Purchased goods and services
•
Capital goods
•
Processing, use, and end-of-life treatment of sold
products
Key Findings from Our Carbon Assessment
Our largest source of emissions is upstream
transportation, which includes emissions from the
transport of incoming goods arranged by suppliers or
Tekmar Group. Our second-largest category is fuel-
and energy-related activities, which includes upstream
energy use such as business travel and employee
commuting. We have also accounted for emissions
from electricity generation, fuel combustion, and
well-to-tank emissions (extraction, processing, and
transportation of fuels).
Next Steps: Turning Insights into Action
With a clear understanding of our emissions profile,
Tekmar Group is focused on the following key actions:
Developing a Carbon Reduction Plan to address our
core carbon hotspots and identify ways to reduce
emissions across all scopes.
Setting additional near-term reduction targets for
Scope 2 and Scope 3 to guide our journey towards Net
Zero.
Engaging our team by promoting carbon literacy
and encouraging sustainable practices across our
operations.
Improving our data quality for future reporting to
ensure more accurate tracking and compliance with
evolving regulations.
As we continue on this journey, we remain committed
to transparency and collaboration, sharing our progress
with stakeholders and working together to make a
lasting impact on the planet.
Lewis Barnes
Supply Chain Manager / Responsible for
Environmental Initiatives
Measuring Our Carbon
Footprint & Our
Commitment to Net Zero
This year, we took a significant step in our sustainability journey by conducting
a comprehensive exercise to measure our carbon footprint across the business,
providing valuable insights to guide our future actions.
Scope 1
Scope 2
Scope 3
492.8
tCO2e
2165.8
tCO2e
448
tCO2e
P.
60
P.
61
www.tekmargroup.com
60
www.tekmargroup.com
61
www.tekmargroup.com
ESG Strategy & Commitment
to Sustainability
Sustainability is a core part of our strategy, guiding
decisions and shaping our long-term impact. Our ESG
Strategy, aligned with the UN Sustainable Development
Goals (UN SDGs), focuses on four key areas:
1. Governance – Ethical business conduct and
compliance
2. Planet – Environmental sustainability and carbon
reduction
3. People – Employee well-being, diversity, and
inclusion
4. Prosperity – Innovation, economic resilience, and
community engagement
Led by our ESG Committee, with representatives
from across the business, we continue to implement
structured and measurable initiatives that drive
progress.
Energy Transition & Innovation
Tekmar plays a key role in the offshore energy sector,
supporting renewable energy growth while maintaining
energy security. Tekmar aims to continue to be the
leading provider of technology and services for the
global offshore energy market.
As the sector evolves, we continue to invest in
sustainability-driven
technology,
reducing
the
environmental impact of offshore projects and aligning
our growth with global net-zero targets.
Carbon Reduction & Sustainability
Reducing our carbon footprint remains a priority as we
work toward long-term sustainability goals. Following
our first full carbon assessment, we have identified key
emission sources and developed a tailored reduction
strategy. Our focus remains on:
•
Annual carbon measurement and reporting
•
Engaging our supply chain in emissions reduction
efforts
•
Regionalising production and optimising logistics
to lower transportation-related emissions
•
Exploring onsite power generation feasibility
•
Implementing sustainable workplace policies
As an EcoVadis network member, we continue working
with customers and suppliers to improve sustainability
practices across the value chain.
Responsible Business & Governance
We uphold the highest standards of business integrity,
transparency, and compliance. Our zero-tolerance
policy on bribery, corruption, and unethical practices
is reinforced by our Business Integrity Policy and
compliance programme. Key governance initiatives:
•
Mandatory compliance training for employees and
contractors
•
Annual risk assessments and policy updates
•
Adherence to the QCA Corporate Governance Code
Certifications in ISO 45001 (Health & Safety), ISO
14001 (Environmental Management), and ISO
9001 (Quality Management)
Strong governance remains fundamental to our long-
term success as we continue expanding our global
operations.
Our People: Culture, Inclusion & Development
Our People Strategy focuses on six core pillars:
•
Modern Workplace
•
Culture & Inclusion
•
Talent Attraction
•
Talent Development
•
Performance Management
•
Health & Wellbeing
The FY25 people strategy supports the business
strategy and growth ambitions.
Communications and Engagement
In FY25 we are committing to an improved
communications and engagement strategy which
encompasses employee voice with continual feedback
and involvement, which meets the requirements
of today and supports our growth ambitions. The
results of our HIVE Employee Engagement survey and
quarterly eNPS pulse surveys will link to this, through
implementing action plans and feedback channels
including our Employee Engagement Forum.
Reward & Recognition Strategy
In FY25, in line with our growth targets, we continue
with steps to support the attraction, retention and
motivation of our people via the creation of our reward
& recognition strategy. Our reward & recognition
strategy is designed to ensure our people feel valued
and recognised for their contributions. By offering
competitive and fair rewards, aligned with business
performance and individual impact, we create a culture
of excellence that supports sustainable growth.
Preparing teams for success
We are focusing on enabling teams to succeed via
robust performance management and development
frameworks, and providing managers with the toolkit
required to have meaningful conversations via manager
training. This includes ensuring team objectives
have a clear link to the overall business strategy.
We will leverage the technology of our HRIS utilising
the appraisal system, enabling structured appraisal
processes leading to performance conversations and
understanding teams training and development needs.
Looking ahead, this will link to succession planning
and high-performance initiatives to further harness the
potential of our people.
Employment Practices & Human Rights
We are committed to upholding internationally
recognised human rights standards, with a zero-
tolerance policy on child or forced labour. With 15
nationalities represented across our workforce, we
champion diversity and inclusion, further strengthened
by our Tier 2 skilled worker sponsor license, which
broadens our global talent pool.
Community Engagement & STEM Initiatives
Tekmar actively supports local communities through
STEM education and outreach. Our employees
volunteer as STEM Ambassadors, participating in:
•
Work experience programmes
•
Manufacturing facility tours
•
Mock interviews and career fairs
•
Judging student projects
We continue our partnerships with UTC South Durham
and the North-East STEM Foundation, inspiring
young people to pursue careers in engineering and
technology.
Customers & Suppliers
Tekmar follows a customer-led strategy, working
closely with energy majors, developers, and contractors
worldwide. Supported by UK Export Finance, we
continue to expand our export activities, ensuring long-
term trusted relationships with our supply chain.
We remain committed to:
•
Transparency and legal compliance
•
Respecting human rights across our supply chain
•
Engaging with customers to solve industry
challenges
Driving Business Improvements
Tekmar continues its collaboration with Sharing in
Growth (SIG), focusing on sales pipeline expansion
and continued operational efficiency.
Our customer satisfaction scorecard and Net Promoter
Score (NPS) survey provide valuable insights, leading
to key improvements:
•
Expanded technical and sales support capacity for
better responsiveness
•
Adoption of Key Account Management (KAM) for
enhanced customer focus
•
Streamlined sales processes through commercial
framework agreements
These initiatives strengthen our ability to deliver high-
quality, customer-focused solutions, ensuring Tekmar
remains a trusted and competitive partner in the energy
industry.
A Sustainable Future
By
focusing
on
sustainability,
innovation,
and
continuous improvement, Tekmar remains committed
to shaping a responsible, future-ready business. We
will continue to lead in offshore energy, supply chain
sustainability, and responsible business practices,
ensuring long-term growth, resilience, and impact.
P.
62
P.
63
www.tekmargroup.com
62
www.tekmargroup.com
63
www.tekmargroup.com
2025 ESG Goals: Driving
Sustainability and Positive
Impact
As we move into 2025, Tekmar Group remains
committed to advancing our Environmental, Social,
and Governance (ESG) initiatives. Building on
the progress made in 2024, our key goals for the
coming year focus on reducing our carbon footprint,
supporting regulatory compliance, strengthening
social impact, and enhancing sustainability within our
supply chain. These initiatives align with our long-term
strategy to become a more sustainable, inclusive, and
forward-thinking organisation.
Environmental Goals (E)
Carbon Footprint Reduction
Following
our
first
comprehensive
carbon
measurement exercise in 2024, we will take meaningful
steps to reduce emissions across our operations. In
2025, we will action-plan based on our findings, establish
an annual measurement process, and work towards
including the full complement of Scope 3 emissions.
Closed-Loop Manufacturing
We will explore opportunities to reduce waste and
improve circularity in our operations by investigating
end-of-life
and
closed-loop
manufacturing
solutions for PU waste. This initiative aligns with
our commitment to sustainable resource use and
minimising environmental impact.
Governance Goals (G)
CBAM Preparation
The Carbon Border Adjustment Mechanism (CBAM),
introduced by the EU, places reporting and taxation
obligations on carbon-intensive imports. While
Tekmar is not directly impacted at this stage, we will
proactively assess and report on GHG emissions in
our exported products to support our customers in
meeting compliance requirements. With CBAM set
to be phased into the UK in 2026, taking early action
will ensure we remain ahead of regulatory changes.
EcoVadis – Achieve Gold Standard
In 2025, we aim to progress from EcoVadis
Committed status to Gold accreditation, extending
our sustainability evaluation beyond our business
to include suppliers and customers within our value
chain. Strengthening ESG risk management and
compliance will reinforce Tekmar’s position as a
responsible industry leader.
Social Goals (S)
Communications and Engagementement
In FY25 we are committing to an improved
communications and engagement strategy which
encompasses employee voice with continual feedback
and involvement, which meets the requirements of
today and supports our growth ambitions. The results
of our HIVE Employee Engagement survey and
quarterly eNPS pulse surveys will link to this, through
implementing action plans and feedback channels
including our Employee Engagement Forum. Effective
communication
and
meaningful
engagement
are fundamental to fostering a high-performing,
collaborative culture at Tekmar Group. By ensuring
our people are informed, involved, and heard, we
strengthen alignment with our business strategy,
driving
innovation,
accountability,
and
shared
success.
Reward & Recognition Strategy
In FY25, in line with our growth targets, we are putting
the building blocks in place to support attraction,
retention and motivation of our people via our reward &
recognition strategy. Our reward & recognition strategy
will ensure our people feel valued and recognised for
their contributions. By offering competitive and fair
rewards, aligned with business performance and
individual impact, we create a culture of excellence
that supports sustainable growth.
Looking Ahead
Our 2025 ESG goals reflect our commitment to
sustainability, regulatory readiness, and social impact.
By focusing on carbon reduction, ethical governance,
and community engagement, we aim to create lasting
positive change while driving business success.
We look forward to working collaboratively with our
employees, customers, and partners to make 2025 a
year of impactful progress.
Leanne Wilkinson
Chief Financial Officer / ESG Committee
Chair
www.tekmargroup.com
64
www.tekmargroup.com
65
www.tekmargroup.com
With over 40 years of experience in the offshore
energy sector, Tekmar has established itself
as a trusted leader, delivering innovative
engineering solutions that have driven the rapid
growth of the global offshore wind market. In
2024, the company welcomed Richard Turner
as CEO, marking the beginning of an exciting
new chapter for Tekmar.
Richard brings with him a proven track record
of leadership and transformation in global
organisations, as well as extensive expertise in
operational excellence, Lean methodologies,
and business growth. With nearly two and a
half decades of experience, spanning roles
in engineering, manufacturing, and offshore
energy, Richard’s career reflects his ability to
deliver results in challenging environments
and drive sustainable growth.
In his first three months at Tekmar, Richard has
already made significant strides in planning
and executing Project Aurora, a transformative
three-year plan to double revenue, expand into
key markets, and position Tekmar for long-term
success. His vision and expertise are guiding
the business toward its ambitious goals,
building on Tekmar’s strong foundations.
We sat down with Richard to learn more about
his journey, his leadership approach, and his
plans for Tekmar’s future.
Q&A with Richard Turner: Tekmar Group’s
CEO
Q: What attracted you to Tekmar Group?
Richard Turner: Tekmar’s reputation speaks
for itself. With over 40 years of experience in
the offshore energy sector, the company has
a proven track record of delivering innovative
solutions.
From
over
100,000
subsea
stabilisation products in service to 10,000
Cable Protection Systems supplied across 25
countries, the breadth and depth of Tekmar’s
accomplishments are truly impressive. What
really drew me in, though, was the opportunity
to work with such a talented team and to lead
the business at this pivotal time, with Project
Aurora setting a clear path for growth and
transformation.
Q: Can you tell us about your career journey
before joining Tekmar?
Richard Turner: My professional journey
started in 2000 with Komatsu and later
Terex, where I spent significant time in Japan
and the USA. Those early years gave me a
deep understanding of Lean and Six Sigma
principles, supply chain management, and
large-scale product development.
In 2009, I joined Technip, where I led
global deployment of the Lean Production
System, implemented a major safety culture
transformation program, and delivered large
capital expenditure projects in global facilities.
In 2014, I became President & CEO of JDR
Cables ltd, where I helped position the
company as an early mover into offshore
wind cables. During my tenure, we built major
factories, drove a fourfold increase in order
intake, and completed the sale of the business
to a trade buyer.
From 2019, as CEO of BEL Valves, I led a
significant restructuring effort, rebuilding
customer relationships, and developing a
spares and O&M business, turning a £(10)m
EBITDA loss into EBITDA profit of £3m.
Most recently, I served as CEO of Geoquip
Marine. There, I spearheaded a major
restructuring, launched operational excellence
programs,
and
achieved
a
remarkable
turnaround—improving EBITDA loss from $(3)
m to EBITDA profit of $27m in just 15 months,
all while devising a 10-year strategy to reach
$100m EBITDA.
Get to Know
Tekmar’s CEO,
Richard Turner
www.tekmargroup.com
66
www.tekmargroup.com
67
www.tekmargroup.com
Each of these experiences has shaped my
approach to leadership and transformation,
and I’m excited to bring these lessons to
Tekmar.
Q: Why did you choose to join Tekmar at this
stage in your career?
Richard Turner: I saw Tekmar as a company
with a rich legacy and immense potential. The
offshore energy market is evolving rapidly,
and Tekmar has the experience, technology,
and talent to not just participate in this
evolution but lead it. With Project Aurora,
we’re focused on growth, diversification, and
innovation—aligning perfectly with my career-
long passion for driving change and building
sustainable businesses.
Q: What excites you most about Tekmar’s
future?
Richard Turner: The energy transition is the
defining challenge of our time, and offshore
wind is at the heart of that shift. Tekmar is
perfectly positioned to capitalise on this
opportunity, especially as new technologies
like floating wind farms gain traction and
global markets expand. What excites me
most is our potential to lead this change—not
just through innovation but by being a trusted
partner for our customers as they navigate
these transformative times. With our strong
foundations and ambitious vision, I believe
Tekmar is poised to shape the future of
offshore energy.
Q: How has your perspective on Tekmar evolved
after three months in the role?
Richard Turner: My initial impressions of
Tekmar were incredibly positive, but after
three months, I’m even more impressed.
Our track record—spanning 40 years—is
phenomenal, and the dedication of our
team is unmatched. The financial stability
we’ve achieved, the clarity of our strategy
through Project Aurora, and the appetite for
innovation within the company all reinforce
my confidence that Tekmar is on the right
path.
Q: How do you plan to lead Tekmar in this next
chapter?
Richard Turner: My focus is on leveraging
our strengths—our heritage, technology, and
financial platform—to deliver sustainable
growth. We have clear goals under Project
Aurora, including doubling our revenue and
achieving mid to high teens EBITDA margins.
To get there, we’ll invest strategically in
innovation,
operational
excellence,
and
market diversification. Leadership is about
empowering people, and I’m committed to
creating an environment where our team can
thrive and deliver exceptional results for our
customers and shareholders.
Q: What message do you have for Tekmar’s
customers and shareholders?
Richard Turner: For our customers, my
message is that Tekmar is here to solve your
challenges and deliver the solutions you need
to succeed. For our shareholders, I want
to assure you that we have a clear plan for
sustainable growth. With our proven track
record, strong financial foundations, and
Project Aurora guiding our future, Tekmar is
well-positioned to create significant value
and deliver on our commitments.
Richard Turner’s extensive
experience and transformational
leadership are driving Tekmar
toward a new phase of growth,
innovation, and market leadership.
His focus on leveraging Tekmar’s
strong foundations and embracing
future opportunities ensures that
the company will continue to lead in
the global offshore energy sector.
www.tekmargroup.com
68
www.tekmargroup.com
69
www.tekmargroup.com
Our Mission: Innovating for the Global Offshore
Energy Market
To fulfil our vision, we are guided by our mission: to
provide innovative engineering solutions and products
for the global offshore energy market. This mission
reflects our technical expertise, our commitment
to solving complex challenges, and our focus on
delivering value to clients around the world.
Innovation is at the core of what we do. As the offshore
energy sector evolves, so too do the demands for
robust and efficient solutions. Our engineering and
geotechnical services, combined with our advanced
subsea products, provide clients with the tools they
need to succeed in a competitive and fast-changing
industry.
Our 100,000 subsea stabilisation products, currently in
service, are a testament to our ability to deliver solutions
that stand the test of time. These products, alongside
our cable protection systems and engineering
expertise, ensure that our clients’ offshore assets are
safeguarded in the most challenging environments.
Global reach is another cornerstone of our mission.
With projects in over 120 locations worldwide, Tekmar
is a trusted partner for offshore energy developers
across continents. By combining local insights with
global expertise, we deliver solutions that are tailored,
effective, and forward-looking.
Our Values: The Heart of Tekmar’s Culture
At the heart of Tekmar are our values: work together,
do things right, and break the boundaries. These
principles define our culture, guide our decision-
making, and influence how we engage with our clients,
partners, and colleagues.
Work Together: Collaboration is essential to our
success. At Tekmar, we believe that by working
together, we can achieve more—both as a team and
with our clients and partners. This spirit of collaboration
fosters innovation, ensures seamless delivery, and
builds strong relationships that stand the test of time.
Do Things Right: Integrity and excellence are non-
negotiable.
Whether
it’s
delivering
high-quality
subsea stabilisation products, performing meticulous
geotechnical
designs,
or
conducting
thorough
analysis, we are committed to doing things the right
way. By adhering to the highest standards of safety,
quality, and sustainability, we maintain the trust and
confidence of our stakeholders.
Break the Boundaries: Innovation means pushing
limits. At Tekmar, we encourage our people to think
differently, embrace challenges, and explore new
possibilities. Breaking boundaries is about more than
technological advancements; it’s about finding better,
smarter, and more sustainable ways to serve our
clients and contribute to the offshore energy market.
Living Our Principles Every Day
Bringing our vision, mission, and values to life is an
ongoing journey that involves every aspect of our
organisation. It’s evident in the way we design and
deliver our products, the relationships we build with our
clients, and the contributions we make to the offshore
energy industry.
At Tekmar, we are not just meeting the demands
of today’s energy market; we are shaping its
future. By working together, doing things right, and
breaking the boundaries, we are enabling the energy
transition and building a legacy that we—and future
generations—can be proud of.
We invite you to join us on this
journey as we continue to innovate,
collaborate, and deliver for a better
tomorrow.
Vision, Mission and
Values
Bringing Our Vision, Mission, and Values to
Life at Tekmar Group
At Tekmar Group, we are proud to share the
guiding principles that define who we are and
what we do: our vision, mission, and values.
These principles are not just statements—
they are the foundation of our organisation,
shaping our strategy, culture, and day-to-day
operations. Whether you are new to Tekmar or
already familiar with our work, we are excited
to show how we bring these principles to
life, creating meaningful impact in the global
offshore energy market.
Our Vision: A Responsibility to Future
Generations
Our vision is both ambitious and purpose-
driven:
to
enable
the
world’s
energy
transition, reflecting our responsibility to
future generations. This encapsulates our
commitment to addressing one of the world’s
most pressing challenges—climate change—
by supporting the transition to renewable
energy sources.
At
Tekmar,
we
don’t
just
talk
about
sustainability; we deliver tangible results.
We have already safeguarded over 40GW of
offshore energy capacity and supplied over
10,000 cable protection systems across more
than 120 projects worldwide. These solutions
play a crucial role in the reliability and longevity
of offshore wind and tidal energy projects,
ensuring they perform optimally for decades.
Our commitment extends beyond products
to include world-class expertise. We have
delivered over 180,000 hours of analysis and
more than 160,000 hours of geotechnical
design, helping clients optimise their projects
for performance, safety, and sustainability.
Additionally,
with
over
100,000
subsea
stabilisation products in active service, we are
making a measurable impact on the global
offshore energy infrastructure.
Our vision is a call to action for
every member of the Tekmar
team, driving us to innovate,
collaborate, and lead in the
transition to a cleaner, greener
future.
www.tekmargroup.com
70
www.tekmargroup.com
71
www.tekmargroup.com
The Board is focussed on effective strategy
development and deployment to ensure
the long-term sustainable success of the
Group, generating value for shareholders
whilst managing risk. We adhere to the QCA
Code in support of this and demonstrate our
commitment to all stakeholders, including
shareholders, with a description of how we
apply the ten governance principles is provided
below.
Principle 1. Establish a strategy and a
business model that promote long-term
value for shareholders
The Board has a clear strategy for delivering
long-term shareholder value. Our ambition is
to:
Create greater scale, resilience and return on
capital by;
•
Doubling Tekmar’s revenue within 3-5
years
through
organic
growth
and
complement this growth through targeted
M&A
•
Delivering
EBITDA
growth
that
out
performs revenue growth
•
Further underpinning Tekmar’s technology
leadership position within the offshore
energy industry
•
Diversifying Tekmar’s offering, expanding
service
revenues
and
expanding
geographical reach to capitalise on
expanding global offshore energy markets
•
Creating
a
diverse
and
dynamic
environment that provides our people with
the platform to drive success and to grow
with our business
The key focus areas within our growth strategy:
•
Organic Growth – Capitalising on our
industry pedigree and improving market
conditions to significantly expand our
orderbook to support sustainable revenue
growth
•
Utilising existing capacity and benefiting
from operational gearing to as well as
continuously improving our operational
efficiency and commercial discipline to
deliver higher % profits and positive cash
generation
•
Sustainable business – target ongoing
business improvement, underpinned by
our People Strategy and our ESG Strategy
•
Invest strategically in businesses and
technology that further reinforce our
position as a complete subsea systems
solutions provider
Our organic & acquisitive strategic pillars are
deployable in parallel as Tekmar benefits from
its position on the public markets and has the
additional flexibility of the £18m Convertible
Loan Note facility with major shareholder
SCF Partners. This will enable us to realise
our growth potential more quickly and to
outperform our markets maximising returns
and shareholder value.
Goverance
Message from the
Chairman
We have developed our corporate governance
processes in line with practices appropriate to
the size of the Group to ensure good business
conduct and culture. We seek to drive the right
values and behaviours throughout the Group
and ensure the Board remains visible and
accountable.
Our corporate governance covers the way
that we behave with each other and how
we interact with our wider stakeholders –
including customers, suppliers, shareholders,
employees and the communities around us.
We have provided more detail on these areas
in our Sustainability Report and in other areas
of this report. We strive to create a culture at
Tekmar based on the highest ethical standards
as this is fundamental to the Group’s success.
The Directors acknowledge the value of high
standards of corporate governance and
adopt and comply with the QCA Corporate
Governance Code which is an effective and
flexible governance model for the Group. Our
Corporate Governance Statement (overleaf
and on our website) provides more detail.
In delivering our strategic growth ambitions
it is important that the Board composition
provides a balance of experience and healthy
challenge to the Executive team. I believe that
the different experiences and backgrounds
of the Board brings a suitable range of
skills in light of the Group’s challenges
and opportunities. At the same time, the
composition of the Board ensures that no
individual (or a small Group of individuals) can
dominate the Board’s decision-making. The
Board meets regularly to formulate, approve
and review progress against the Group’s
strategy, budgets, corporate actions and goals.
The Board delegates some duties and
responsibilities to representative committees,
Audit, Remuneration and Nomination, each
having agreed terms of reference and a
process for making recommendations to the
Board. Details of the activities for each of the
committees are included in this governance
section of the Annual Report.
The Executive Team have the appropriate
delegated authorities from the Board to ensure
the right decision-making takes place across
the business and that the right controls are
embedded into these processes. They are
responsible for the day-to-day management
of the Group and driving the execution of our
strategy.
This next section of the Annual Report covers
our corporate governance and how it operates
for the Group. I hope it provides the detail
you require and am always happy to receive
feedback from our stakeholders in this regard.
Corporate Governance
Statement
www.tekmargroup.com
72
www.tekmargroup.com
73
www.tekmargroup.com
Principle
4.
Embed
effective
risk
management, considering both opportunities
and threats, throughout the organisation
The Board has overall responsibility for the
determination of the Group’s risk management
objectives and policies, as well as the Group’s
risk appetite. This risk management is
included in and reviewed as part of our annual
business plan and Strategic Review. Operating
in the offshore energy sector, managing risk is
fundamental to our everyday responsibilities
and our policies, procedures and behaviours
are continuously reviewed to ensure these are
appropriate.
The Board aims to set policies that provide
a balance between reducing risk as far as
possible, without unduly impacting the Group’s
competitiveness and flexibility. The Board
believes this helps to sustain stakeholder value;
including the Group’s supply chain through to
the end-customer; while also protecting the
Group’s established corporate culture.
A breakdown of the Company’s key risk factors
can be found in the Risk Management report.
Risk management, including financial and
non-financial controls; what the Board does to
identify, assess and manage risk and how it
obtains assurance that our risk management
and control systems are operating effectively,
is covered by the Group’s business risk
assessment procedures.
Principle 5. Maintain the Board as a well-
functioning, balanced team led by the Chair
The Directors recognise the importance of
high standards of corporate governance and
believe the QCA Code provides the most
appropriate guidance for the Group by setting
out a standard best practice for small and
mid-size
quoted
companies,
particularly
those listed on AIM. The Chairman maintains
overall responsibility for ensuring the Group’s
compliance with the QCA Code. The Non-
Executive Directors share responsibility for the
effective running of the Board’s committees
which comprise an important element of the
governance process.
In line with QCA guidance, three of the Non-
Executive Directors are independent. The
Non-Executive Directors of the Board have
been selected with the desire to increase
the breadth of skills and experience of the
Board and bring constructive challenge to the
Executive Directors.
The Company Directors are:
•
Steve Lockard, Non-Executive Chairman
•
David Wilkinson, Senior Independent
Non-Executive Director
•
Richard Turner, Chief Executive Officer
•
Leanne Wilkinson, Chief Financial Officer
•
Colin Welsh, Non-Executive Director
•
David Kemp, Non-Executive Director
•
Lars Bondo Krogsgaard, Non-Executive
Director
The
Group
has
determined
that
the
composition of the Board and its committees
brings a desirable portfolio of skills, personal
qualities and experience for delivering our
strategy, based upon the size and nature of
the business.
All Directors are subject to re-election
by shareholders at the Annual General
Meeting within a three-year period of their
appointment. Any Directors appointed during
the financial year must be formally elected at
the Annual General Meeting following their
appointment.
Further incremental investments will support
growth and be self-funded where possible,
to protect the business and shareholder
interests. We will manage risk closely to
limit any potential adverse effects in the
implementation of our strategy. We do this by
ensuring that we have a framework in place
to identify and monitor risk and uncertainty
in line with our business risk assessment
procedures.
Principle 2. Seek to understand and meet
shareholder needs and expectations
We are dedicated to communicating clearly
and openly with shareholders to ensure that
our strategy, business model and performance
are clearly understood.
Understanding what analysts and investors
think about us, including the factors which
drive their investment decisions towards us,
and helping our stakeholders understand our
business, is a key component in driving our
business forward.
Maintaining regular and positive engagement
with shareholders is a priority. Our primary
methods of communication are through
the Annual Report; interim and full-year
results announcements; the Annual General
Meeting and other information shared on
the Group’s investor website. We will also
continue to carry out investor roadshows at
significant times throughout the year, attend
investor conferences and a commitment to
host investors at Tekmar’s facilities where
appropriate. The Company also seeks
improved levels of communication with a
bolstered financial PR and Investor Relations
function and the use of the Investor Meet
Company platform. Information in relation
to the Company, garnered from these
engagements will be relayed back to the Board
by the CEO and CFO, to ensure the concerns of
shareholders are promptly addressed
If and when voting decisions at AGMs or
General Meetings deviate from the Company’s
expectations, the Board will communicate
with shareholders to understand and address
any issues informing those decisions.
Requests for information on any of these
matters, including details of investor days, can
be made to investors@tekmar.co.uk. Note: no
unpublished price sensitive information will
be provided by this email address. All Tekmar
Group plc communications will align and
accord with official AIM guidelines.
Principle 3. Take into account wider
stakeholder and social responsibilities, and
implications for longer term success
The Board strives to create a socially and
ethically responsible business and has
developed an ESG Strategy to formalise
our alignment to the UN Sustainable
Development Goals. The Executive Team
maintain oversight over the delivery of this
strategy going forward including delivery
against targeted improvements.
The Board appreciates the need to maintain
effective working relationships across a wide
range of stakeholders, including investors,
employees, partners and local communities.
Our ESG Strategy will continue to evolve
as we respond to feedback from our wider
stakeholders and actions taken as a result
seen as an essential part of ensuring long
term success.
Our
operational
processes
are
also
externally audited and reflected by the
ISO accreditations within our subsidiary
businesses. Our commitment to these areas
is shown through their inclusion in our annual
strategic planning process, including a SWOT
analysis, and thus they are embedded into the
Group’s strategy and business model.
Corporate Goverance Statement continued
www.tekmargroup.com
74
www.tekmargroup.com
75
www.tekmargroup.com
Each of the Directors are active in the energy
sector and continually refine and improve
their knowledge of the latest techniques and
strategies in order to ensure they are adding
maximum value to the Board.
For acquisition activity we use a range of
professional advisors to protect and enhance
the Group’s position as it delivers on its
strategy.
Principle 7. Evaluate Board performance
based upon clear objectives and reassess
continuously
The Board has an annual process for the
performance appraisal of its members, the
scope of which includes skills, experience and
capabilities, and incorporates consideration
of additional responsibilities such as chairing
or membership of the Board committees.
The annual appraisal is carried out by the
Chairman with regards to the competencies
and responsibilities set out by the Nomination
Committee pursuant to each Board role. As
part of this process, any training and personal
development needs will be identified and a
plan formulated to ensure these are met over
an appropriate timeframe.
The
Chairman’s
performance
is
also
appraised through a process managed by
a Chairman Appraisal Group, comprising
the Chief Executive Officer and the Chief
Financial Officer.
The responsibilities of the Board are to
review, formulate and approve the Group’s
strategy, budgets and corporate activities,
and to oversee the Group’s progress towards
its goals. The Group has a defined process
for evaluating the performance of the Board,
its committees and the individual Directors,
including the Chairman, in respect of these
objectives.
The Board carries out an evaluation of its
performance
regularly,
covering
Board
composition
and
skills,
strategy
and
performance, governance and organisation,
Board dynamics, and communication with
shareholders and other key stakeholders.
This evaluation is based upon the self-
assessment of the Chairman and Directors.
If deemed necessary, an external adviser may
be brought in to support with the evaluation.
The Nomination Committee may use the
output of the evaluation process when
evaluating the composition of the Board
for selecting new Board members, and in
succession planning for the Directors of
the Board as well as key executive team
members.
Principle 8. Promote a culture which is based
on ethical values and behaviours
We have a clear vision and values. Our values
are:
•
Work Together - We foster teamwork
without boundaries, to ensure the best
results are delivered in an environment
where people feel empowered, safe,
trusted, confident and inspired to develop.
•
Do Things Right - We take a united
approach towards Safety, Quality and
Delivery. We lead by example and
constantly find ways to raise standards.
We challenge the norm and have courage
to stand up for what is right.
•
Break the boundaries - We collaborate
with our customers and constantly look
for ways to develop our technology and
services to make today’s impossible
tomorrow’s deliverable.
It is considered that the composition of the
Board is appropriate for the Group’s current
size and structure and supports our strategic
aims. This is reviewed on an annual basis. The
Group believes that the successful functioning
and effectiveness of the Board is predicated
upon a number of key factors, in addition to its
composition. These are:
•
Operations – the agenda and frequency of
meetings, and monitoring of attendance;
•
Access
to
appropriate
advice
and
administrative
services
–
via
both
the Company Secretary and external
resources, as required;
•
Detailed induction of new Directors to the
Board and its committees; and
•
Regular
assessment
of
Board
performance – both as a unit and of its
members individually.
Both the Chairman and the other members
of the Board hold these factors in the highest
regard and are dedicated to performing
ongoing evaluation to evaluate how they are
applied in practice.
The time commitments of the Non-Executive
Directors are as follows:
•
Steve Lockard minimum time commitment
of four days per month.
•
David
Wilkinson
minimum
time
commitment of three or four days per
month.
•
Colin Welsh minimum time commitment
of two days per month.
•
David Kemp minimum time commitment
of two or three days per month.
•
Lars Bondo Krogsgaard minimum time
commitment of two or three days per
month.
Principle 6. Ensure that between them, the
Directors have the necessary up-to-date
skills, experience and capability
The Board is confident that its members have
an appropriate balance of backgrounds, skills
and knowledge in order to deliver on its core
objectives. The members of the Board have
particular experience in offshore energy;
engineering; manufacturing; operations and
finance, covering both private and public
companies.
Linked to the strategic investment in April
2023, Colin Welsh and Steve Lockard joined
the Board as representatives of SCF. Colin
is a Partner of SCF with global energy sector
experience and experience as an advisor and
investor. Steve is an Operating Partner within
SCF and has over 35 years’ experience in
global operations and executive leadership.
In August 2024, in light of Ian Ritchey and
Julian Brown stepping down from the Board,
the Group announced the appointment of two
Non-Executive Directors, David Kemp and Lars
Bondo Krogsgaard. David is an accomplished
and experience FTSE 250 CFO with a strong
track record leading diverse global teams.
Before joining Tekmar, David was the CFO at
John Wood plc. Lars brings considerable wind
industry experience and an extensive track
record leading global organisations for over
20 years, including publicly listed companies.
The Nomination Committee is responsible
for overseeing the selection of Board
members that possess an appropriate range
of experience, knowledge, integrity and
ethics. Throughout the year, the Directors can
access advice and services of independent
professional advisors, at the expense of the
Company.
Corporate Goverance Statement continued
www.tekmargroup.com
76
www.tekmargroup.com
77
www.tekmargroup.com
The Board advocates ethical responsibility and good
conduct within the Group, encouraging a culture
of inclusion, responsibility and openness which is
consistent with the Group’s objectives. We constantly
strive to actively promote a proactive attitude towards
HSQE by all stakeholders and we have a safety-first
approach in everything we do.
The Group is an equal opportunities employer and
actively encourages diversity at all levels. These
values are embedded in the Group’s leadership and
throughout the organisation.
Principle 9. Maintain governance structures and
processes that are fit for purpose and support good
decision making by the Board
Quality underpins everything we do. Within the offshore
energy industry, standards and the protection of those
standards are paramount and something which the
Tekmar Board has a wealth of experience in. Our
independently audited quality management systems
and ISO accreditations demonstrate our commitment
in this area.
The
Group
operates
an
effective
governance
framework.
Within
this
framework
the
Board
encourages and challenges the Executive Team in
developing and delivering the Group’s strategy. An
open and constructive dialogue is entered into before
decisions within these governance structures are
concluded.
The Chairman leads the Board and takes responsibility
for its governance structures, performance and
effectiveness. This includes ensuring that the
dynamics of the Board are functional and productive,
and that deliberations and discussions are not
dominated by any individual member. The Chairman
is also responsible for ensuring that links between
the Board and the Executive Team and the Board and
shareholders, are strong and effective. Meanwhile, the
Chief Executive Officer takes responsibility for the day-
to-day management of the Group’s operations and for
delivering the strategic goals agreed by the Board.
The Board maintains an agenda of regular financial and
operational matters for discussion, as well as reviewing
each committee’s area of work. The Board takes
ultimate responsibility for making any key strategic or
business decisions. Members of the Executive Team
are invited to attend appropriate portions of meetings
of the Board in order to facilitate these processes.
In other instances, the Chief Executive Officer
communicates their relevant views and information to
the rest of the Board.
The effectiveness of the corporate governance
structures and processes is formally assessed as part
of the annual Board evaluation.
Principle 10. Communicate how the company is
governed and performing by maintaining a dialogue
with shareholders and other relevant stakeholders
We are committed to communicating openly with
our shareholders to ensure our strategy, business
model and performance are all clearly understood.
Understanding what key stakeholders think about us,
including the drivers behind their investment decisions,
is a key part of developing our business. We also
maintain a strong focus on ensuring our stakeholders
understand our business.
The principal methods of communication with
shareholders are the Annual Report, the interim and
full-year results announcements, the Annual General
Meeting and other announcements as and when
applicable on the Group’s investor website. In support
of this communication the company meets at least bi-
annually with institutional investors and also utilises
the Investor Meets Company platform at relevant
points during the year to address the retail investor
community. Where possible, we proactively support
investor roadshows at key dates throughout the
year, attend investor conferences and host site visits
to Tekmar premises, including ad-hoc meetings by
exception.
The website is updated regularly with information
regarding developments across the Group, and users
can register to receive email alerts regarding new
announcements, reports and events, including Annual
General Meetings.
Corporate Goverance Statement continued
The Board
Steve Lockard
Chair and Non-Executive Director
Steve Lockard was appointed Chair of Tekmar Group
in 2024, having joined the Board in 2023 following
investment from SCF Partners. With 40 years of
global operations leadership experience, Steve
brings invaluable expertise in renewable energy and
company platform building. In addition to his role at
Tekmar, Steve is an operating partner and supports
energy transition investments and company platform
building for SCF.
Steve is the former CEO and current Chairman of TPI
Composites (NASDAQ: TPIC), where he transformed
the business into the world’s largest independent
wind blade manufacturer, driving significant growth
in the global offshore and onshore wind sectors.
He brings extensive board experience from roles at
D2Zero and leadership positions with the American
Wind Energy Association (AWEA) and the American
Clean Power Association (ACP).
Steve’s strategic guidance and deep industry
expertise position him to help drive Tekmar’s growth
and leadership in offshore wind and energy transition
markets. Based in Arizona, Steve enjoys golf, skiing,
and spending time with his family.
Richard Turner
Chief Executive Officer
Richard Turner joined Tekmar Group as CEO in 2024,
bringing extensive leadership experience in the
offshore energy sector, including offshore wind, oil
and gas, and renewables. With a strong track record of
driving transformational growth, Richard has delivered
significant value through strategic vision, operational
excellence, and commercial acumen in his previous
roles.
Richard joined Tekmar from Geoquip Marine, where
he served as CEO. During his tenure, he developed
and executed a clear strategy that delivered
substantial revenue and EBITDA growth in just 12
months. This was achieved through restructuring the
business, enhancing operational performance, and
implementing new front-end processes to rebalance
risk.
Prior to Geoquip, Richard was CEO of BEL Valves,
where he successfully led a significant rightsizing
program, rebuilt key customer relationships, and
developed a spares and O&M business, turning a
£(10)m EBITDA loss into a £3m profit. At JDR Cable
Systems, as President and CEO, Richard positioned
the company as an early mover in offshore wind
cables, delivering a fourfold increase in order intake
and overseeing major factory builds while driving the
successful sale of the business to a trade buyer.
www.tekmargroup.com
78
www.tekmargroup.com
79
www.tekmargroup.com
The Board continued
Leanne Wilkinson
Chief Financial Officer
Leanne Wilkinson became Chief Financial Officer
and an Executive Director of the Board in June 2023,
following her tenure as Group Finance Director. Leanne
joined Tekmar in July 2020 as Tekmar Energy Finance
Director before progressing to senior leadership roles
within the Group.
A CIMA-qualified accountant with over 20 years of
experience as a senior finance professional and
business leader, Leanne brings extensive expertise
in business change, transformation, and integration,
gained from her work in the manufacturing and
technology sectors.
Leanne has played a pivotal role in Tekmar’s success,
co-leading the investment process with SCF and
driving key fundraising activities to strengthen the
Group’s financial platform. As Chair of the ESG
Committee, Leanne oversees Tekmar’s commitment
to sustainability and its environmental, social, and
governance strategy. Her leadership was integral to
Tekmar’s return towards profitability in 2024, where
she focused on operational improvements and
financial discipline to deliver sustainable growth.
Leanne’s strategic vision and deep understanding of
Tekmar’s business position her as a critical leader in
executing the Group’s transformative Project Aurora
strategy.
Alasdair MacDonald
Executive Director (Resigned February 2025)
Alasdair (“Ally”) MacDonald has over 30 years of
experience in the offshore energy sector, bringing
deep industry expertise and strategic leadership to
Tekmar Group. An engineer by trade, Ally holds an
honours degree in mechanical engineering and has
built a distinguished career in senior executive roles
across the sector.
Ally spent 19 years with Technip UK Limited, a global
engineering and construction company, where he
held a number of senior leadership roles, including
Managing Director of Technip Umbilicals Limited from
2005 to 2008, a leader in its global markets. He later
joined Wellstream Holdings plc, a FTSE 250 designer,
manufacturer, and supplier of flexible pipeline
products to the offshore oil and gas industry, where
he held senior executive positions and contributed
to the company’s growth and operational success.
Ally has also served as a Director for several privately
funded businesses, further broadening his leadership
experience.
Having served as Tekmar Group’s CEO, Ally stepped
down in 2024 and continued as a member of the
Board as an Executive Director until January 2025.
His extensive industry knowledge and engineering
expertise continued to play a vital role in supporting
Tekmar’s strategic direction.
David Wilkinson
Senior Independent Non-Executive Director
David is a Fellow of the Institute of Chartered
Accountants and holds the ICAEW’s Corporate
Finance qualification. He was a Partner at Deloitte
for almost 30 years, initially being responsible for
Corporate Finance advisory and transaction support
work, but later in his career undertook audits as the
Responsible Individual for large private companies
and plcs within a diverse range of industries, including
the technology, manufacturing, and engineering
sectors. In recent years, David has taken up several
Non-Executive Director roles in Technology and
engineering companies.
Colin Welsh
Non-Executive Director
Colin Welsh joined the Board of Tekmar Group as
a Non-Executive Director in 2023, following the
investment from SCF Partners. As a Partner at
SCF Partners, Colin brings extensive experience
in international energy investment banking and
corporate finance, contributing valuable strategic
insights to the Group.
Prior to joining SCF Partners in 2017, Colin served
as Chief Executive Officer and Head of International
Energy Investment Banking at Simmons & Company
International. Joining Simmons in 1999, he was
instrumental in expanding the firm’s activities outside
North America, establishing offices in Aberdeen,
London, and Dubai. Under his leadership, Simmons
&
Company
International
grew
significantly,
culminating in its sale to Piper Jaffray (NYSE: PJC)
in February 2016.
A Scottish Chartered Accountant, Colin has over
30 years of experience in the energy sector. Before
his tenure at Simmons & Company, he spent 16
years with Ernst & Whinney, Touche Ross, and RMD,
where he gained extensive experience in accounting,
auditing, and financial advisory services.
Colin’s deep understanding of the global energy
market and his expertise in strategic growth and
investment align with Tekmar’s ambitions. His
involvement strengthens the Board’s capacity to
drive Tekmar’s expansion and deliver long-term value
to shareholders.
www.tekmargroup.com
80
www.tekmargroup.com
81
www.tekmargroup.com
The Board continued
Lars Bondo Krogsgaard
Non-Executive Director
Lars Bondo Krogsgaard joined the Board of Tekmar
Group as a Non-Executive Director in 2024, bringing
over 20 years of leadership experience in the global
wind industry. Lars has an extensive track record of
leading publicly listed companies and driving growth
across wind turbine manufacturing, renewable energy
project development, and supply chain activities.
Previously, Lars served as Onshore CEO at Siemens
Gamesa Renewable Energy, a leading global wind
turbine manufacturer with revenues of approximately
€10.2 billion. Before his role at Siemens Gamesa, Lars
was Co-CEO at MHI Vestas Offshore Wind, where
he played a pivotal role in advancing offshore wind
technology and market growth. He also served as a
member of the Management Board and CEO of Nordex,
a publicly listed German wind turbine manufacturer,
where he oversaw significant organisational and
market expansions.
Lars’ deep industry knowledge, operational expertise,
and proven leadership in the renewable energy sector
make him an invaluable member of Tekmar’s Board.
His experience aligns with Tekmar’s strategic focus
on the offshore wind market and supports the Group’s
ambitions.
David Kemp
Non-Executive Director
David Kemp joined the Board of Tekmar Group as a
Non-Executive Director in 2024, bringing extensive
financial and strategic leadership experience from
a distinguished career in FTSE 250 companies and
global organisations.
Most recently, David served as Group CFO at
John Wood Group Plc (“Wood Group”), a global
engineering and consulting company with over
35,000 professionals across 60 countries and
revenues of approximately US$6 billion. During his
decade-long tenure, David played a key leadership
role in transforming Wood Group from an oil and gas-
dominated, unintegrated organisation into a global,
multi-sector engineering and consultancy business.
His responsibilities included extensive capital raising,
where he oversaw over US$4 billion in public and
private markets, as well as executing over US$3 billion
of strategic acquisitions.
Prior to Wood Group, David served as Group CFO of
Jersey Oil and Gas plc, an AIM-quoted exploration
company, where he was responsible for driving
financial and operational performance.
David’s proven expertise in strategy development
and execution, business transformation, and M&A
aligns closely with Tekmar’s ambitions. His deep
understanding of capital markets and experience
leading diverse global teams make him a key
contributor to the Board as Tekmar accelerates its
growth and transformation agenda.
Key Management
Fraser Gibson
Managing Director of RYDER
Fraser Gibson is the Managing Director of RYDER, Tekmar
Group’s global engineering powerhouse formed in 2024
through the merger of Ryder Geotechnical and AgileTek
Engineering. A Chartered Engineer with the Institution of
Civil Engineers, Fraser brings over 16 years of experience
as a geotechnical engineering consultant in the offshore
sector.
Fraser began his career at UTEC Geomarine, where he
progressed from Senior Engineer to Principal Engineer
and later Regional Manager for APAC. During his time
in Singapore, Fraser successfully established an office
for UTEC Geomarine in the region, further expanding its
presence in the Asia-Pacific market.
In 2016, Fraser founded Ryder Geotechnical to provide
specialist
geotechnical
consultancy
services
to
the offshore energy industry. Under his leadership,
the company built a strong reputation for technical
excellence, contributing to Tekmar Group’s unrivalled
track record of over 340,000 engineering hours delivered.
Now, as Managing Director of RYDER, Fraser leads a
multidisciplinary team, combining geotechnical and
advanced engineering expertise to offer integrated
solutions to the offshore wind, oil and gas, and marine civil
engineering markets.
Fraser’s entrepreneurial spirit, deep technical knowledge,
and leadership have been instrumental in establishing
RYDER as a trusted partner for complex offshore projects
worldwide.
Marc Bell
Chief Operations Officer
Marc Bell was the Managing Director of Tekmar Energy,
bringing over 25 years of technical and operational
leadership experience across manufacturing, service,
and project engineering-focused organisations. A
Mechanical Engineer with a Master’s in Business
Management from the University of Durham, Marc
has spent the past 15 years working within the Global
Energy Sector, holding key roles in offshore wind and
subsea industries.
Before joining Tekmar Energy as Managing Director in
2021, Marc served as Global Operations Director for
JDR Cables, Head of Offshore Wind UKI for Siemens
Gamesa, and Global Manufacturing Manager for
Technip Umbilicals. In each of these roles, Marc
demonstrated a strong ability to drive operational
excellence, deliver complex projects, and embed
innovative practices within global organisations.
From January 2025, Marc transitioned to the role
of Chief Operations Officer, overseeing Pipeshield
operations in addition to Tekmar Energy. Marc’s focus
will be on embedding the best practices established
at Tekmar Energy across RYDER and Pipeshield,
ensuring operational consistency and continuous
improvement across the Group.
Marc’s
extensive
experience
and
leadership
capabilities position him to play a pivotal role in driving
Tekmar Group’s operational excellence as part of its
Project Aurora strategy.
www.tekmargroup.com
82
www.tekmargroup.com
83
www.tekmargroup.com
Key Management continued
Tallulah Whitewood-Spedding
Group Legal Counsel / Company Secretary
Tallulah Whitewood-Spedding is Tekmar Group’s
Group Legal Counsel and Company Secretary, bringing
over a decade of experience in supporting businesses
and public corporations with complex science and
engineering projects. She has particular expertise in
commercial law and intellectual property within the
offshore, energy services, and defence sectors.
Prior to joining Tekmar, Tallulah held senior legal roles
at Siemens and Royal IHC Limited, where she provided
strategic legal advice and managed high-value
negotiations. As Head of Legal and Procurement at
the National Physical Laboratory (NPL Management
Limited), the United Kingdom’s National Measurement
Institute, Tallulah gained significant experience in
leading negotiations, advising on commercial strategy,
and drafting complex cross-jurisdictional contracts.
Tallulah also sits on Tekmar’s ESG Committee, where
she provides key governance and legal expertise
to support the Group’s environmental, social, and
governance initiatives. Her strategic approach
and deep understanding of legal and commercial
frameworks ensure Tekmar operates with robust
governance while supporting its global operations and
long-term objectives.
Alistair Cutting
Group Head of Finance
Alistair Cutting is Tekmar Group’s Head of Finance and
a member of the Institute of Chartered Accountants
in England and Wales. With a decade of experience
in finance, Alistair brings a strong background in
financial reporting, audit, and the development and
implementation of financial controls.
Alistair joined Tekmar Group as Financial Controller
of the former subsidiary Subsea Innovation Limited
before progressing to the role of Group Financial
Controller. His dedication, deep understanding of
the business, and strong work ethic have been
instrumental in his promotion to Group Head of
Finance.
During his tenure, Alistair has played a pivotal role
in audits, investment activities, and key account
reporting. His expertise and attention to detail have
ensured the Group’s financial processes remain
robust and transparent, supporting Tekmar’s ongoing
growth and operational excellence.
Michael Manning
Head of Marketing
Michael Manning is Tekmar Group’s Head of Marketing,
bringing over a decade of experience in delivering
impactful marketing strategies across both the
private and public sectors. With a proven track record
of driving brand awareness and growth, Michael’s
passion for design and brand identity has enabled him
to craft campaigns that resonate with target audiences
while effectively communicating the unique value
proposition of Tekmar’s products and services.
In 2024, Michael transitioned to the role of Head
of Marketing, where he has led the rebranding and
repositioning of RYDER, establishing its identity as a
global engineering powerhouse. As the sole marketing
professional within the Group, Michael works across
all subsidiaries, managing key projects such as
exhibitions, communications, and investor relations.
Michael also plays a pivotal role in internal
communications, ensuring clarity and alignment
across the Group. Additionally, he supports the
development of strategic marketing plans and lead
generation initiatives, working closely with sales teams
to achieve company targets and financial goals.
Chloe Ainsworth
Group Head of People
Chloe Ainsworth is Tekmar Group’s Head of People,
playing a pivotal role in driving the company’s growth
through strategic, people-focused initiatives. With
a first-class degree and Chartered CIPD (MCIPD)
status, Chloe is an active member of the North East
HR community, contributing to its development and
championing innovative, future-focused practices.
Chloe’s passion for people science, psychology, and
business strategy underpins her commitment to
fostering talent, cultivating a culture of innovation,
and aligning Tekmar’s people strategy with its
broader business objectives. Her efforts are
instrumental in making Tekmar Group an employer
of choice.
In 2024, Chloe was a key member of the team
responsible for the successful disposal of Subsea
Innovation. She also led the TUPE process for
AgileTek and Ryder, ensuring a smooth transition
during their integration. Chloe provided critical
guidance to the Board on complex employee
relations matters. Additionally, she managed
international HR complexities in China, Saudi
Arabia, and the UAE, demonstrating her expertise in
navigating cross-border workforce challenges.
www.tekmargroup.com
84
www.tekmargroup.com
85
www.tekmargroup.com
Why Invest in Tekmar?
Our engineering and technical excellence
sets us apart.
Tekmar is a leader in offshore protection
and stabilisation solutions, offering cutting-
edge technologies and expert engineering
services that underpin some of the most
challenging projects in the energy and
marine sectors.
•
No one else does what we do: Tekmar
holds a unique market position,
delivering innovative solutions that are
critical to the success of offshore wind,
oil and gas, and marine civil engineering
projects.
•
Protection and stabilisation
technologies: We provide advanced
subsea protection and stabilisation
solutions, enabling our customers to
optimise their projects while reducing
risks, improving safety, and lowering
costs.
•
Engineering services: Tekmar’s expertise
spans the entire project lifecycle, from
initial feasibility studies to Operations &
Maintenance (O&M), delivering tailored
solutions for offshore wind, oil and gas,
and marine infrastructure.
•
Pioneers and pedigree: With decades
of experience, Tekmar is a trusted
partner for developers worldwide, with a
reputation for innovation, reliability, and
technical excellence.
Favourable markets support sustained
demand for Tekmar’s technology
Tekmar operates at the intersection of
several high-growth industries, each
benefitting from strong, long-term market
fundamentals.
•
Offshore wind: As governments and
industries accelerate towards net
zero carbon emissions, offshore
wind is a critical component of the
energy transition, providing significant
opportunities for Tekmar’s market-
leading solutions.
•
Offshore oil and gas: Tekmar’s proven
technologies and expertise support the
continued need for secure and reliable
subsea infrastructure in this vital energy
market.
•
Ports and marine civils: Investment
in port development and coastal
infrastructure provides further growth
opportunities, where Tekmar’s protection
and stabilisation solutions deliver
proven benefits in these challenging
environments.
We are building a durable and successful
company, “no matter what” the path of
energy transition
Tekmar is built to thrive across energy and
marine sectors, combining innovation and
resilience to deliver long-term success.
•
Refreshed management team: Under
the leadership of Richard Turner, our
strengthened management team is
driving a clear and focused strategy to
deliver results.
•
Results-driven Board: Our Board, with
its wealth of experience, is committed
to overseeing disciplined execution and
delivering value for shareholders.
Investment Case
“I joined the Board in April 2023, initially as Non-Executive
Director and was appointed Chair in June 2024. The period
of time with which I have been involved with Tekmar has
strengthened my conviction about the opportunity we have
to make Tekmar a stand-out offshore energy business – a
business that delivers exceptional value for customers,
creates significant value for shareholders and is a rewarding
and stimulating environment for our colleagues. This is
what drives us.”
Steve Lockard, Chair of Tekmar
www.tekmargroup.com
86
www.tekmargroup.com
87
www.tekmargroup.com
•
Sound stewards of capital: Tekmar is
committed to disciplined investment,
ensuring
shareholder
returns
are
maximised while maintaining a strong
financial position.
•
Profitable growth and cash generation: Our
focus is on enhancing EBITDA margins,
generating free cash flow, and delivering
sustainable returns on capital employed.
Our three-year strategic plan supports a
step-change in Tekmar’s scale and financial
strength
Project Aurora is a bold and transformative
plan that will position Tekmar for growth,
profitability, and resilience.
•
Order book: An expanding order backlog
across offshore wind, oil and gas, and
marine civil markets highlights the strength
of demand for Tekmar’s technologies and
services.
•
Well-run
business
with
capacity:
Operational discipline and efficient use of
existing capacity ensure Tekmar is well-
prepared to scale as market opportunities
grow.
•
Operational gearing: Improved utilisation
rates
and
disciplined
investment
are
delivering
enhanced
profitability,
positioning Tekmar for strong financial
performance over the coming years.
Our ambitious M&A strategy drives additional
scale and diversification
Tekmar’s mergers and acquisitions strategy
complements our organic growth plan by
targeting
opportunities
that
strengthen
our market position, broaden our product
offering, and diversify into new markets and
geographies.
•
Leveraging
strategic
capital:
Our
partnership with SCF provides access to
£18m of capital through the Convertible
Loan Note (CLN), enabling us to execute
targeted acquisitions.
•
Focused approach: The executive team
has conducted an initial mapping of
the M&A “universe,” identifying over 40
potential acquisition targets. These have
been prioritised against key criteria,
with further evaluation underway in
collaboration with the M&A committee.
Key criteria for acquisitions:
•
Positive EBITDA and cash generative
businesses
•
Opportunities for market consolidation
•
Complementary products and services
•
Expansion into new geographies
•
Strengthening offshore services
•
Future-facing technology and growth
potential
•
“Brown to green” transition opportunities
Our disciplined M&A strategy aims to create
value through carefully selected acquisitions,
ensuring they align with Tekmar’s long-term
vision and growth objectives.
Investment Case continued
This investment case demonstrates why Tekmar is
uniquely placed as a market leader in offshore wind,
oil and gas, and marine civil engineering. With a robust
strategy, clear growth opportunities, and a commitment to
sustainable and profitable performance, Tekmar offers a
compelling proposition for long-term investors.
www.tekmargroup.com
88
www.tekmargroup.com
89
www.tekmargroup.com
Risk 2. Project timings and delay to contract awards
Risk Type: Strategic, Financial performance, Liquidity
Description: The project-based, contractual nature of
the Group’s business, coupled with its concentrated
customer base, leads to a revenue profile that is
inherently uneven over the year. Most contract awards
and associated revenues are dependent on large
capital projects within the energy sector, the timing of
which is out of the business’ control.
Impact: There is an associated risk that the fulfilment
of any contract, together with its revenue, may fall
outside the financial period that was originally forecast.
This, in turn, may have a material adverse impact on
the Group’s reported financial performance for the
specific period. As noted in the basis of preparation of
the financial statements on page 125, there is a risk
that delays in contract award could lead to liquidity
challenges for the Group.
Mitigation: The business has produced a 5-year
strategic plan that includes an assessment on project
timing and the revenue streams macro climate. The
wider Group portfolio offers a mix of project timings
due to new markets and regions as well as further
diversification into service based revenue streams.
Evaluation: Monitored by Board
Risk 3. Macroeconomic environment
Risk Type: Financial, Operational
Description: General economic conditions: This
risk relates to the Group’s exposure to short-term
macroeconomic conditions in our sector such as
inflation, cost increases and supply chain logistics.
The factors driving the market changes can be outside
of the Group’s control and difficult to forecast.
Impact: The Group has experienced increased
supply chain costs and general cost inflation. These
Macroeconomic changes have the potential to reduce
the financial resources available to the Group.
Mitigation: The Group cannot control the market
conditions in which it operates. The Group has
implemented effective cost initiatives, enhanced
controls surrounding pricing and gross margin
management.
Evaluation: The Board continues to closely monitor the
increased macroeconomic risks which are mitigated
by enhanced controls.
Risk Management
Identifying, evaluating and monitoring the key indicators
to the success of our business is pivotal to informing
our strategic decision making.
The Board has overall responsibility for setting the
course for the Group’s risk management objectives
and policies. Working within the offshore energy
industry, managing risk is integral to our business and
we continuously review our policies, procedures and
behaviours to mitigate our risks and reduce them to
acceptable levels.
The objective of the Board is to set policies that seek
to mitigate ongoing risk as far as possible whilst
maintaining the Group’s competitiveness and flexibility.
The Board believes this helps to sustain stakeholder
value; from key suppliers to end-customers; while also
protecting the Group’s established corporate culture
and creating shareholder value.
The Group operates a structured process in relation
to risk management, including both financial and
non-financial controls, which identifies and evaluates
risks and uncertainties and reviews activity to mitigate
those risks. The most salient and significant risks
that the Board considers could potentially impact the
business are described below. We consider the nature
of the Group’s principal risks and uncertainties have
not materially changed since last year:
Risk 1. Access to capital (Liquidity Risk & Cashflow
Risk)
Risk Type: Strategic, Finance
Description: Access to capital is a significant factor in
the Group’s ability to maintain sufficient liquidity which
underpins the trading activity of the Group. There is
uncertainty in relation to how, when and to what extent
developments will impact on the markets we operate
in, the wider economy, levels of investor activity and
confidence.
Impact: Without access to sufficient finance the
company may struggle to maintain sufficient liquidity
or undertake all aspects of its organic growth
plan alongside as Groups acquisition strategy for
accelerated growth.
Mitigation: The business has ongoing relationships
with banks and other financial institutions that offer
the required level of support. The Group has previously
strengthened its cash position with the extension on
banking facilities and the equity fundraise. As noted
in the basis of preparation of the financial statements
on page 125, there is a risk that bank facilities are not
renewed. The business has a strong relationship with
Barclays and as a result, management are confident
that bank facilities will continue to be available to the
Group for the foreseeable future.
In April 2023, the Group received capital investment
from SCF Partners and related parties of £4.3m
alongside a placing and retail fund raise of £2.1m raised
cash proceeds of £5.3m, net of expenses. In addition,
SCF Partners have committed, with conditions an
additional investment of £18.0m available through the
convertible loan note facility. The strategic investment
from a global institutional investor in the energy
sector provides funding for the Company to follow
an ambitious plan for growth, both organically and by
acquisition.
Evaluation: Monitored by Board
www.tekmargroup.com
90
www.tekmargroup.com
91
www.tekmargroup.com
Risk 6. Recruitment and Retention of Key People
Risk Type: Operational, Compliance;
Description: The business may fail to attract, develop
and retain key individuals with the skillsets required
to maintain a successful business and culture,
particularly within engineering and leadership.
Impact: A major impact on Tekmar’s ability to fulfil its
contractual obligations. Adverse impact on the future
growth aspirations for the Group.
Mitigation: Key KPI’s are reviewed monthly by the
Executive Team and Board.
In addition, the People Strategy has been developed
to focus on the retention and development of talent.
Annual appraisal assessments are undertaken and
a skills matrix and succession plan developed from
this, including risk mitigation plans.
Annual review of remuneration and benefits to
ensure we are consistent across the Group and are
competitive in the relevant region. Executives and
senior management incentive plan in place.
Regular pulse surveys to invite feedback on a range of
issues over the period.
Evaluation: Monitored by board.
Risk 7. Risk of claims and failure to meet contractual
obligations
Risk Type: Strategic, Financial, Operational
Description: The Group enters contracts that
contain terms that, in some cases, contain wide
reaching indemnities and warranties. These terms
are commonplace in the subsea industry and do not
unfairly prejudice the Group, nor do they put the Group
in a materially worse position than its competitors.
These warranties and indemnities lead to an inherent
risk that the Group’s liability for any breach could
be extensive, especially if these are given on an
uncapped basis.
Impact: A major impact on the business’ ability to
fulfil its contractual obligations. Adverse impact on
the future growth strategy for the business.
Mitigation: Contracts are reviewed extensively prior
to signing, and the likelihood of risks assessed by
legal and technical teams. Uncapped liabilities are
kept to a minimum and only agreed to for areas of the
contract that Directors believe are very low risk. Where
possible the Group insures against risks to minimise
the potential financial impact. There is a strong focus
across the Group on high quality project execution
which is regularly reviewed under independent ISO
certification where appropriate.
Evaluation: Monitored by board.
Risk 4. Systems and processes
Risk Type: Operational, Compliance
Description: IT systems are vital to the operations
of the Group. Failure to adequately invest in and
maintain the Group’s systems could lead to the loss
or theft of sensitive data or compromise the Group’s
ability to effectively carry out operations.
Impact: Systems failures could lead to an inability
to meet customers’ needs and lead to reputational
damage. The loss of sensitive information could lead
to significant damage with an associated risk of fines.
Mitigation: The Group predominantly outsources
provision of IT services to a suitably qualified
third-party, whose competence and service are
regularly reviewed. Regular staff training is offered
or mandated, depending upon the nature of the
training, to ensure that all staff maintain awareness
of their responsibilities with respects to IT security,
with particular focus on cyber-security. The Group is
currently undertaking the implementation of a new
finance and business system which is scheduled to
be implemented by March 2025.
Evaluation: Risks remain low due to continuous
review and upgrade of systems as required.
Risk 5. Technology and competition
Risk Type: Strategic
Description: The risk of new competitors leading to
a reduction in pricing. Design changes could lead to
technology obsolescence and subsequently reduced
volume of sales.
Impact: Reduced volume of sales. Increase in capital
expenditure to develop new products. Resulting in a
reduction in the Group’s financial performance.
Mitigation: The business undergoes a detailed
technology
readiness
level
(TRL)
programme
when developing new products, which includes an
assessment of competition and what our ultimate
value proposition would be. Significant investment
is made in the continuous development of existing
products to ensure they keep pace with current
market trends. Our more diversified product portfolio
allows us to offer a unique proposition to customers.
Evaluation: Monitored by board
Risk Management continued
www.tekmargroup.com
92
www.tekmargroup.com
93
www.tekmargroup.com
Risk 8. Financial management risks
Risk Type: Financial
Description: Price Risk: The Group’s key products are
reliant on key components including Polyurethane
(PU), Cast Iron and Concrete. There is an inherent
risk that price increases outside of Groups control
can have an impact on the trading conditions and
environment in which the Group operates.
Interest Rate Risk: The current economic position
within the UK has led the Bank of England to decrease
the base interest rate. Current economic outlook
suggests that borrowing rates are likely to remain at a
high level in the short term. The current interest rates
will lead to annual borrowing costs for the Group
consistent with FY24.
Exchange Rate Risk: The Group’s continued expansion
into international markets increases the Group’s
exposure to risks associated with changes in foreign
currency exchange rates on sales and operations.
The proportion of revenue denominated in currencies
other than pound sterling is expected to increase.
Exchange rate variations could have an impact on the
Groups reported financial results.
Credit Risk: The ability of the Group along with its
key stakeholders, customers and suppliers to avoid
default on credit is key to future growth strategy of
the business.
Impact: Without access to sufficient finance the
company may struggle to undertake all aspects of
its growth plan, such as the acquisition strategy and
accelerated growth.
Mitigation: The business has ongoing relationships
with banks and other financial institutions that
offer the required level of support. The Group has
strengthened its cash position with the extension on
banking facilities. Cash flow forecasts are updated
and discussed regularly, with analysis prepared at
both a subsidiary and Group level.
Exchange Rate Risk: Where revenues are generated
in international markets, with contracts denominated
in non-sterling currencies, the Group aims to create a
natural hedge by matching the currency of the supply
chain to the currency of the revenue stream. Where
natural hedges are not available or do not sufficiently
cover the exposure, management will consider the use
of forward currency contracts to mitigate exchange
rate risks.
Enhanced due diligence is undertaken at the
contracting stage to understand the price impacts
of a particular contract, detailed financial project
reviews are undertaken with multiple key suppliers
underpinning the core of the Group’s supply chain.
Evaluation: Increased risk due to economic
environment, monitor.
This Strategic Report was approved by order of the
Board.
Leanne Wilkinson
Chief Financial Officer
3 March 2025
Risk Management continued
Audit Committee Report
It is my pleasure to present the Audit Committee
Report for the year ended 30 September 2024. The
Committee comprises David Kemp, a Non-Executive
Director and myself as Chair. As a Chartered
Accountant I bring the relevant financial experience
in this role and this is my third year as Audit Chair for
the Company.
Responsibilities
The Audit Committee oversees the formal and
transparent arrangements for considering how the
Board should apply the financial reporting and internal
control principles for the Company and the wider
Group and it maintains an appropriate relationship
with the Company’s auditors.
We monitor the integrity of the financial statements
of the Company, including its annual and half-yearly
reports, interim management statements, and any
other formal announcements relating to its financial
performance, including reviewing any significant
financial reporting issues and judgements which they
contain.
The full Terms of Reference can be found on the
Group’s website, covering the following areas:
•
Financial Reporting
•
Internal Controls and Risk Management Systems
•
Compliance, whistleblowing and fraud
•
External Audit
Internal Controls and Risk Management Systems
The Audit Committee supports the Board in
reviewing the risk management methodology and the
effectiveness of internal controls. During the year the
Group has continued to enhance its financial internal
controls and governance procedures, including those
relating to cyber-crime, and these are kept under
constant review.
External auditor
The Audit Committee monitors the relationship
with the external auditor, Grant Thornton UK LLP, to
ensure that auditor independence and objectivity are
maintained. Through this review, the Audit Committee
monitors the provision of non-audit services by the
external auditor. The non-audit services provided by
Grant Thornton UK LLP are disclosed in note 8 of the
financial statements. These fees, which amounted to
£8k, are considered to be a low value and therefore do
not impact on the auditor’s independence.
Significant issues considered in relation to the
financial statements
Significant risks relate to those significant non-
routine transactions that are deemed complex and/
or highly judgmental. The significant risks and key
audit matters relating to the financial statements
for this year were considered, discussed with the
auditors and concluded upon. Details can be found in
the Independent Auditor Report and are summarised
below:
•
Revenue Recognition – there are two types of
revenue that require management judgement,
being revenue recognised over time and revenue
recognised at a point in time. The significant
risk relates to the assessment of the revenue
recognised overtime.
•
Valuation of goodwill and intangible assets –
there is a significant risk regarding the valuation
of intangible assets including goodwill, which
are based on management’s assessment and
assumptions in the annual impairment review.
This risk is relevant to the offshore energy CGU.
www.tekmargroup.com
94
www.tekmargroup.com
95
www.tekmargroup.com
•
Accounting for defect notices and insurance
claims – Identifying for completeness all defect
notices received and their appropriate disclosure
in accordance with IAS 37 is a significant risk.
Whilst many of these notices relate to an industry
wide issue alleging CPS failures, they are each
considered separately on their own merits in
determining the appropriate accounting treatment.
This disclosure is based on management’s
assessment of whether a present obligation
exists. The Group has received funds following
commercial settlement with insurers post year
end, a risk exists around the Group’s recognition
and disclosure in relation to the insurance receipts
in accordance with IAS37.
•
Going concern – The Group forecasts show that
the debt facilities which are relied upon, are due for
renewal in June 2025 and the CBIL’s facility due for
renewal in October 2025. Additionally a material
uncertainty regarding the timing of contract
awards is included in the basis of preparation.
•
Contract loss provision - There is a significant level
of management judgement and estimation needed
to assess the provisions. There is a significant
level of judgement, being the estimation in
calculating future expected costs on the contracts
as the contracts are bespoke in nature. As there
are several multi-year projects, the estimate
around forecasting losses is sensitive and has the
potential for material error.
•
Valuation of parent company’s investments in
subsidiaries – this risk associated with valuation
of subsidiaries is increased by the uncertainty
caused by the current economic climate.
•
Management override of controls – this is a non-
rebuttable presumed risk for all companies and is
reviewed for all companies in the Group.
As Chair of the Audit Committee, I am satisfied that
the Audit Committee Report covers the activities of the
Committee over the year to 30 September 2024 along
with the subsequent audit of the financial statements.
I will be available at the Group’s Annual General Meeting
to discuss any matters raised in this report.
David Wilkinson
Chair of the Audit Committee
3 March 2025
Audit Committee Report continued
I, David Wilkinson, Chair of the Remuneration
Committee, present the Directors’ Remuneration
Report for the year ended 30 September 2024. I
chair the Remuneration Committee and am joined by
Colin Welsh Independent Non-Executive Director. The
report provides shareholders with details regarding
our Directors’ remuneration policy and the impact
of this on Executive remuneration outcomes in
the period, along with how this links to the Group’s
financial performance.
Responsibilities
The Remuneration Committee ensures that the
Executive Directors and Executive Management
are fairly rewarded for their individual contributions
to the overall performance of the Group, having
appropriate regard to the views of our shareholders
and other stakeholders. Our policy aims to provide
appropriate incentives to encourage enhanced Group
performance, without paying more than is necessary,
having regard to relevant remuneration trends.
The Committee also oversees any major changes
in employee benefit structures across the Group,
also ensuring changes to employment law are duly
enacted.
The remuneration of Non-Executive Directors is a
matter for the Chairman of the Board along with
the Executive Members, not this Remuneration
Committee, and no Director or Manager is involved in
any decisions as to his or her own remuneration.
Executive Incentive Plan (EIP)
The Group operates an Executive Incentive Plan to
ensure the Senior Management Team are motivated
and rewarded for supporting the growth aspirations
of the Group. The EIP is made up of equal parts long
term share option plans and bonus, with values being
indicative of an individual’s role and tenor. The EIP is
reviewed by this Committee to ensure performance
measures align to the financial targets of the Group,
including reward for material stretch targets.
Targets for the CEO, CFO and the remaining Executive
Management Team are based on Adjusted Earnings
Before Interest & Tax and Cash Generation.
Employee remuneration
Annual Pay Review
In recognition of the hard work and loyalty of our
people during the last twelve months, and to assist
with cost of living, we confirmed an inflationary award
of 3% to all eligible staff from 1 October 2024.
Sharesave Plan 2024 (SAYE )
Following the success of our previous Sharesave
plans we launched a fourth plan in March 2024. The
scheme was again open to all employees subject to
a qualifying service period. A total of 12 employees
subscribed to 1,045,472 share options over a period
of three years.
Remuneration Committee
Report
www.tekmargroup.com
96
www.tekmargroup.com
97
www.tekmargroup.com
Group Remuneration Policy
The key components of the remuneration policy are:
Remuneration Committee Report continued
Why
How
Basic annual salary
To attract and retain the
right talent reflecting the
responsibilities of the role,
along with experience and skills
required.
Inflationary pay rises tracking
national indicators
Pension
To provide a contributory pension
scheme in line with or exceeding
statutory requirements, to provide
employees with support after
retirement
The Group continues to contribute
5% to employees’ pensions
and has transitioned to a salary
sacrifice scheme within the year
Other benefits
Additional benefits to support
the health and wellbeing of our
employees
Life assurance, healthcare
scheme, wellbeing programme
Annual bonus
To reward high-performing
individuals
Annual bonus with performance
criteria based upon financial
targets, to support the Group’s
growth strategy.
The key criteria for performance
is based on revenue growth,
Adjusted EBITDA and cash
generation.
Share Schemes
Share ownership is an important
part of employee incentivisation
and retention
All employee SIP and SAYE
Plans and LTIPs for executive
management
Remuneration of the Board
The Remuneration Committee reviewed the market rates in considering the remuneration of the CEO and CFO
during the period, along with the Non-Executive Director roles, and confirm they remain in line with appropriate
benchmarks.
Director
remuneration
Basic
salary /
fees
Share
awards
Social
security
Bonus
Company
Pension
contributions
FY24
Total
FY23
Total
Name of Director
£000
£000
£000
£000
£000
£000
£000
A MacDonald
241
67
41
-
-
349
486
J Brown
83
-
13
-
13
94
69
D Bulmer
-
-
-
-
-
-
122
I Ritchey
69
-
7
-
7
83
38
D Wilkinson
46
-
11
40
-
97
41
L Wilkinson
168
10
22
-
19
219
234
C Welsh
40
-
4
-
-
44
20
S Lockard
53
-
-
-
-
53
21
DM Kemp
6
-
1
-
-
7
-
LB Krogsgaard
6
-
-
-
-
6
-
R Turner
25
-
3
-
3
31
-
Retention Plan
Following the resignation of the former CEO, James Ritchie, on 3 August 2020 the Board approved a new share
option incentive plan, the Retention Plan, to further incentivise the Executive Management Team. The team
were granted awards for up to 200,000 ordinary shares based on length of service, effectively reallocating a
large proportion of the IPO options that lapsed on James leaving.
Retention plan
Options b/fwd
Options lapsed-
employment
Options exercised
Remaining options
A MacDonald
17,073
-
17,073
-
Under the plan shares became available to exercise on 2nd June 2021. All options in relation to the retention
plan have now been exercised or lapsed.
www.tekmargroup.com
98
www.tekmargroup.com
99
www.tekmargroup.com
LTIPs
In April 2023, the remuneration committee approved a Long term Incentive Plan to incentivise and reward
management for the three financial years, ending 31 March 2026. Management were granted awards for up to
4,819,666 ordinary shares. There are no performance conditions for this tranche of LTIPs.
The table below shows the activity in the period in relation to LTIPs including the position at the period end,
showing those options lapsing due to performance conditions not being met and those lapsing due to the
employment conditions not being met.
Remuneration Committee Report continued
LTIPS
Options Granted
Option lapsed -
employment
Option Exercised
Remaining
options
Alasdair Macdonald
2,427,600
(1,618,400)
(809,200)
-
Leanne Wilkinson
375,000
-
(125,000)
250,000
Other Senior
Management
1,454,565
(645,305)
(246,080)
563,180
The Board recognises the need to ensure the Executive Management Team remain incentivised going
forward and will be launching the FY25 LTIP once clear of the financial closed period. This will include the
arrangements for the current CEO and CFO.
The above report sets out our approach to remuneration for the Executive Management Team and employees.
However, if you have any questions regarding this, I will be available at the Group’s Annual General Meeting to
discuss them.
David Wilkinson
Chair of the Remuneration Committee
3 March 2025
Nomination Committee
Report
I, Lars Krogsgaard, Chair of the Nomination Committee,
present the Nomination Committee Report for the year
ended 30 September 2024. The Committee comprises
Lars Krogsgaard, Steve Lockard and David Wilkinson.
Responsibilities
The Nomination Committee regularly reviews the
structure, size and composition of the Board and
makes recommendations to the Board with regard
to any changes. We give regular consideration to
the succession planning for Directors and Senior
Executives, taking into account the skills and
experience needed both now and in the future.
During 2024, the Committee maintained its focus
on the careful succession planning of the Board and
Executive Management Team to ensure that they
remain effective in driving forward the strategy of the
Company.
There have been three changes to the Board this
year and I provide more detail as to the Nomination
Committee’s involvement and process below.
Appointment of Chief Executive Officer – September
2024
On 2 September 2024, we welcomed Richard Turner
to the board of directors in the role of Chief Executive
Officer.
Appointment of Chairman – September 2024
On 30 September 2024, Steve Lockard was appointed
to the role of Chairman.
Non-Executive directors – August 2024
On 12 August 2024, we welcomed David Kemp and Lars
Krogsgaard to the Board as Non-Executive Directors.
Other changes
On 12 August 2024, Ian Ritchey stepped down from the
role of Non-executive Director.
On 2 September 2024, Alasdair Macdonald stepped
down from the role of Chief Executive Officer taking on
the role of Executive director.
On 30 September 2024, Julian Brown stepped down
from the role of Chairman.
Lars Krogsgaard
Chair of the Nomination Committee
3 March 2025
www.tekmargroup.com
100
www.tekmargroup.com
101
www.tekmargroup.com
Directors’ report
The Directors present their report together with the
audited Group financial statements of the Parent
Company (‘the Company’) and the Group for the year
ended 30 September 2024.
Directors
The directors who held office during the year and up to
the date to the approval of accounts were as follows:
Richard Turner - Appointed 2nd September 2024
Leanne Wilkinson
David Wilkinson
Colin Welsh
Steve Lockard
David Kemp - Appointed 12th August 2024
Lars Krogsgaard - Appointed 12th August 2024
Alasdair Macdonald
Julian Brown - Resigned 30th September 2024
Ian Ritchey - Resigned 12th August 2024
Business review and future developments
The information that fulfils the requirements of the
strategic report and business review, including details
of the results for the year ended 30 September 2024,
principal risks and uncertainties, financial KPIs and the
outlook for future years, are set out in the Chairman’s
Statement and Chief Executive Officer’s and Chief
Financial Officer’s Reviews.
Research and development
The business continuously invests in research
and development activity. The highlight during the
financial year was the continued development of
the next generation TekLink product in the offshore
wind division. A total of £85,000 of Research and
Development costs were incurred in year. All costs have
been capitalised as intangible assets under IAS38.
Major shareholders
As at 1st February 2025 the following interests of
shareholders in excess of 3% have been notified to
the Company:
Number of
ordinary
shares
Ordinary
shares as a
% of issued
share capital
SCF-IX, L.P.
43,616,569
31.69%
Schroders plc
16,825,738
12.21%
J O Hambro
Capital
Management
Limited
12,683,333
9.22%
River Global
Investors
10,081,580
7.33%
Hargreaves
Lansdown,
Stockbrokers
(EO)
6,051,217
4.40%
for the year ended 30 September 2024
Going Concern
The Group meets its day-to-day working capital
requirements through its available banking facilities
which includes a CBILs loan of £3.0m currently
available to 31 October 2025 and a trade loan facility
of up to £4.0m that can be drawn against supplier
payments, currently available to 31 July 2025. The
latter is provided with support of 80% from UKEF
due to the nature of the business activities both in
renewable energies and in driving growth through
export lead opportunities. The Group held £4.6m of
cash at 30 September 2024 including draw down of
the £3.0m CBILS loan and a further £3.1m of the trade
loan facility. There are no financial covenants that the
Group must adhere to in either of the bank facilities.
The Directors have prepared cash flow forecasts to
31 March 2026. The base case forecasts include
assumptions for annual revenue growth supported
by current order book, known tender pipeline, and
by publicly available market predictions for the
sector. The forecasts also assume a retention of the
costs base of the business with increases of 5% on
salaries and consistent gross margin on contracts.
These forecasts show that the Group is expected
to have a sufficient level of financial resources
available to continue to operate on the assumption
that the two facilities described are renewed and
refinanced respectively. Within the base case model
management have modelled the outflow of cash of
£5.8m in relation to note 20 Provisions within the
going concern period which is offset against the
corresponding insurance receivable within the same
period, Management have not modelled anything in
relation to the matter set out in note 20 Contingent
Liabilities, as management have assessed there to be
no present obligation .
The Directors have sensitised their base case
forecasts for a severe but plausible downside
impact. This sensitivity includes reducing revenue
by 17% (£10m equivalent) for 18 month the period
to 31 March 2026, to model the potential loss or
delay of a certain level of contracts in the pipeline
that form the base case forecast, and a further 5%
increase in costs across the Group as a whole for
the same period. In addition, the delays of specific
cash receipts have been modelled. The base case
and sensitised forecast also include discretionary
spend on capital outlay. The Directors note there is
further discretionary spend within their control which
could be cut, if necessary, although this has not been
modelled in the sensitised case given the headroom
already available. These sensitivities have been
modelled to give the Directors comfort in adopting
the going concern basis of preparation for these
financial statements. Further to this, a ‘reverse stress
test’ was performed to determine at what point there
would be a break in the model, the reverse stress
test included reducing order intake by £15m (60%
of unsecured revenue) and increasing overheads
by 7% against the base case. In addition, the delays
of specific cash receipts have been modelled, this
results in elimination of liquidity headroom in the final
month in the going concern period. The severe but
plausible case includes mitigating actions such as
delayed capital expenditure spend.
Facilities - Within the base case, severe but plausible
case and reverse stress test, management have
assumed the renewal of trade loan facility in July
2025 and renewal or conversion of the CBILS loan into
a term loan in October 2025. In the unlikely case that
the facilities are not renewed, the Group would aim
to take a number of co-ordinated actions designed to
avoid the cash deficit that would arise.
The Directors are confident, based upon the
communications with the team at Barclays, the
historical strong relationship and recent bank facility
renewal in November 2024, that these facilities will
be renewed and will be available for the foreseeable
future. The renewal of the two facilities in October
2025 and July 2025 are yet to be formally agreed and
the Group’s forecasts rely on their renewal.
Contract Award and Timings – In the severe but
plausible scenario, management has adjusted the base
case forecast to account for the potential downside
impact of order intake not being converted within the
expected timescales. This adjustment results in a 17%
reduction in revenue over the entire going concern
period. This sensitised model shows that there is
sufficient cash headroom to continue to operate the
business.
www.tekmargroup.com
102
www.tekmargroup.com
103
www.tekmargroup.com
The Group operates on a contract basis and during
the normal course of business, contracts are expected
to be executed within specific timeframes during the
forecast period. If the Group fails to secure a number
of significant contracts, in line with its forecasted
timeframes, during a period of lower cash reserves
cash headroom would be breached. Management
does not consider this to be a likely outcome based
on current backlog levels being representative of
prior periods coupled with a strong pipeline visibility,
opportunities at preferred supplier status and further
anticipated contract awards within the required
timescales. Such contract awards would provide
sufficient cash resources for the going concern period.
Both the required renewal of the facilities and contract
award timing represent events or conditions which
would indicate a material uncertainty that may cast
significant doubt on the Group’s and the parent
company’s ability to continue as a going concern.
The Directors are satisfied that, taking account
of reasonably foreseeable changes in trading
performance and on the basis that the bank facilities
are renewed, these forecasts and projections show
that the Group is expected to have a sufficient level of
financial resources available through current facilities
to continue in operational existence and meet its
liabilities as they fall due for at least the next 12 months
from the date of approval of the financial statements
and for this reason they continue to adopt the going
concern basis in preparing the financial statements.
Dividends
The Directors do not anticipate that the Company will
declare a dividend in the near term, as available cash
will support working capital requirements along with
the identified strategic investment plan. No dividends
have been paid in the period.
Directors and their interests
The Directors of the Company during the period and
their interests in the ordinary share capital at the end
of the year are shown in the table below:
Ordinary
shares of
1p each
30 September
2024
30 September
2023
A MacDonald
3,876,140
3,049,867
S Lockard
3,888,889
3,888,889
L Wilkinson
489,130
-
There have been no changes to the above
shareholdings since the period end. Post year end
Richard Turner (CEO) has acquired 799,313 shares on
28 January 2025.
Further details of the Directors’ interests can be found
in the Remuneration Committee Report.
Directors indemnities
The Group has not made qualifying third-party
indemnity provisions for the benefit of its Directors
during the year.
Streamline energy and carbon reporting (SECR)
The Group does not report under SECR as none of
its subsidiary undertakings are large companies. The
parent company is exempt from reporting as it is a
low energy user consuming less than 40MWh per
annum.
Relations with stakeholders
The Group considers its key stakeholders to be
its shareholders, employees and customers and
suppliers. How the Group engages with these,
and broader stakeholders is described in the s172
statement on page 26.
Financial risk management
Details of the Group’s exposure to financial risks are
set out in Note 22 to the financial statements.
Takeover Directive requirements
The Company has one class of equity share, namely
1p ordinary shares. The shares have equal voting
rights and there are no special rights or restrictions
attaching to any of them or their transfer to other
persons. The rights and obligations attaching to these
shares are governed by the Companies Act 2006 and
the Company’s Articles.
Rules governing the appointment and replacement
of Directors, and those relating to the amendment of
the Company’s Articles of Association, are contained
within those Articles of Association, a copy of which
is located on the Company’s website (investors.
tekmar.co.uk).
Notice of Annual General Meeting
The Annual General Meeting will be held at 9.30am
on 27 March 2025 at Pod 3, The Workplace, Heighton
Lane, Aycliffe Business Park, Newton Aycliffe, DL5
6AH. The Notice of Annual General Meeting which
sets out the resolutions to be proposed at the
forthcoming AGM has been posted to shareholders.
These Group financial statements will be laid before
the Company in a general meeting held at 9.30am on
27 March 2025 at Pod 3, The Workplace, Heighton
Lane, Aycliffe Business Park, Newton Aycliffe, DL5
6AH. The Notice of General Meeting which sets
out the resolutions to be proposed at that meeting
accompanies these Group financial statements.
Events after the reporting date
After the reporting period, the Group received
insurance proceeds of £5.2m in relation to legacy
warranty matters. Further details can be found in
note 20 of the annual report. There were no other
subsequent events.
Independent auditor
The auditor, Grant Thornton UK LLP, has been
re-appointed and a resolution concerning their
appointment will be proposed at the AGM.
Disclosure of information to the auditor
The directors confirm that at the time this report is
approved:
•
So far as each director is aware, there is no
relevant audit information of which the company’s
auditor is unaware; and
•
the Directors have taken all the steps that they
ought to have taken to make themselves aware
of any relevant audit information and to establish
that the company’s auditor is aware of that
information.
This Directors’ Report was approved by order of the
Board.
Leanne Wilkinson
Chief Financial Officer
3 March 2025
Directors’ Report continued
www.tekmargroup.com
104
www.tekmargroup.com
105
www.tekmargroup.com
Independent auditor’s report to the members of Tekmar Group plc
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of Tekmar Group plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 30 September 2024, which comprises the Consolidated
statement of comprehensive income, the Consolidated balance sheet, the Consolidated statement of
changes in equity, the Consolidated cash flow statement, the Notes to the group financial statements,
including material accounting policy information, the Parent company balance sheet, the Parent
company statement of changes in equity and Notes to the parent company financial statements,
including a summary of significant accounting policies. The financial reporting framework that has
been applied in the preparation of the group financial statements is applicable law and UK-adopted
international accounting standards. The financial reporting framework that has been applied in the
preparation of the parent company financial statements is applicable law and United Kingdom
Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’
(United Kingdom Generally Accepted Accounting Practice).
In our opinion:
•
the financial statements give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 30 September 2024 and of the group’s loss for the year then ended;
•
the group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards;
•
the parent company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
•
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit
of the financial statements’ section of our report. We are independent of the group and the parent company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2(b) in the financial statements, which indicates that at the reporting date, the group
meets its day-to-day working capital requirements through reliance on its available banking facilities which
includes a COVID Business Interruption Loan (CBIL) of £3.0m, currently available to 31 October 2025 and a
trade loan facility of up to £4.0m that can be drawn against supplier payments, currently available to 31 July
2025. The note also confirms that it is not certain that the facilities will be renewed or refinanced. The cash flow
forecasts show that the group is expected to have a sufficient level of financial resources available to continue to
operate on the assumption that the two facilities described are renewed however, the renewal of both facilities is
not guaranteed.
Furthermore, Note 2(b) in the financial statements, also indicates that the going concern basis of preparation is
dependent on the group securing significant contract awards in line with the forecast time. If certain significant
contract awards are delayed, the Group may not have a sufficient level of financial resources available to
continue to operate as a going concern.
The Directors are responsible for preparing the Annual
Report and the Group and parent Company financial
statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare Group
and parent Company financial statements for each
financial year. Under the AIM Rules of the London
Stock Exchange, they are required to prepare the Group
financial statements in accordance with UK-adopted
International Accounting Standards (IFRS’s) and
applicable law and they have elected to prepare the
parent Company financial statements in accordance
with UK accounting standards and applicable law (UK
Generally Accepted Accounting Practice), including
FRS 101 Reduced Disclosure Framework.
Under company law the directors must not approve
the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of
the Group and parent Company and of their profit or
loss for that period. In preparing each of the Group and
Parent company financial statements, the directors are
required to:
•
select suitable accounting policies and then apply
them consistently;
•
make judgements and estimates that are
reasonable and prudent;
•
for the Group financial statements, state whether
applicable UK-adopted International Accounting
Standards have been followed, subject to any
material departures disclosed and explained in the
financial statements;
•
for the parent Company financial statements,
state whether applicable UK accounting standards
have been followed, subject to any material
departures disclosed and explained in the financial
statements;
•
Prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the Group and parent company will continue
on that basis;
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the parent Company’s transactions and disclose
with reasonable accuracy at any time the financial
position of the parent Company and enable them to
ensure that its financial statements comply with the
Companies Act 2006. They are also responsible for
safeguarding the assets of the parent company and
hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The directors are responsible for preparing the
annual report in accordance with applicable law
and regulations. Having taken advice from the Audit
Committee, the directors consider the annual report
and the financial statements, taken as a whole, provides
the information necessary to assess the company’s
performance, business model and strategy and is fair,
balanced and understandable.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the company’s website. Legislation in
the UK governing the preparation and dissemination
of financial statements may differ from legislation in
other jurisdictions.
Richard Turner
Chief Executive Officer
3 March 2025
Statement of Directors’
Responsibilities
www.tekmargroup.com
106
www.tekmargroup.com
107
www.tekmargroup.com
As stated in Note 2(b), these events or conditions, along with the other matters as set forth in Note 2(b), indicate
that a material uncertainty exists that may cast significant doubt on the group and parent company’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director's use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
Our evaluation of management’s assessment of the entity’s ability to continue as a going concern
Our evaluation of the directors’ assessment of the group’s and the parent company’s ability to continue to adopt
the going concern basis of accounting included:
•
Obtaining an understanding of how management prepared their base case and sensitised forecasts for
the period to March 2026;
•
Assessing the accuracy of management’s forecasting by comparing the reliability of past forecasts to
management’s actual results, and considering whether management’s historic forecasting accuracy
impacts the reliance we can place upon the forecasts provided;
•
Obtaining an understanding of key trading, balance sheet and cash flow assumptions and testing those
key assumptions to underlying historical financial data, post year end trading information and market
analysis data;
•
Considering the inherent risks associated with the group’s and the parent company’s business model
including effects arising from macro-economic factors such as inflation and assessing how these factors
were incorporated into the base case and sensitised forecasts;
•
Assessing the terms of the external debt held and challenging management’s assessment of the
possibility of renewal during the going concern period including correspondence with the lender;
•
Assessing the plausibility of the mitigating actions available to management to continue as a going
concern if downside sensitivities were to crystalise;
•
Evaluating management’s reverse stress test and worse-case forecasts and management’s
consideration of the magnitude of a decline in cash that would give rise to the elimination of the
headroom in the borrowing facilities;
•
Performing arithmetical and consistency checks on management’s going concern base case, severe but
plausible and reverse stress test models; and
•
Assessing the adequacy of related disclosures within the annual report for consistency with
management's assessment of going concern and whether they are in line with the accounting
standards.
Our responsibilities
We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the group’s and the parent company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the
related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s
opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future
events or conditions may cause the group or the parent company to cease to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Our approach to the audit
Overview of our audit approach
Overall materiality:
Group: £329,000, which represents approximately 1% of the
group’s revenue.
Parent company: £492,000, which represents approximately 1%
of the parent company’s total assets.
In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters
described below to be the key audit matters to be communicated
in our report.
Key audit matters were identified as:
• Accounting for defect notices and the completeness of
the defect provision (updated from the previous year
to include reference to provision);
• Occurrence of contract revenue (same as previous
year); and
•
Valuation of goodwill and intangible assets (same as
previous year).
Our auditor’s report for the year ended 30 September 2023
included one key audit matter that has not been reported as key
audit matters in our current year’s report. This relates to the
valuation of investments in subsidiaries (parent company only).
Scoping of the group has been determined to ensure appropriate
coverage of the significant risks as well as coverage of the key
quantitative benchmarks used to determine significance of
components, specifically:
Group revenue: 96%
Group absolute loss before tax: 47%
In response to changes within the group since the prior year, one
component is no longer subject to specific-scope audit
procedures as it is a discontued operation; it is instead subject to
specified audit procedures at the group level.
Key audit matters
Key audit matters are those matters that, in our professional judgement,
were of most significance in our audit of the financial statements of the
current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified.
These matters included those that had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Key audit
matters
Scoping
Materiality
Description
Audit response
Disclosures
Our results / Key
Observations
KAM
www.tekmargroup.com
108
www.tekmargroup.com
109
www.tekmargroup.com
In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the
audit. This is not a complete list of all risks identified by our audit.
In addition to the matter described in the material uncertainty related to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter – Group
How our scope addressed the matter – Group
Accounting for defect notices and the
completeness of the defect provision
We identified the accounting for defect notices
and the completeness of the defect provision as
one of the most significant risks of material
misstatement due to error.
This is due to the judgement involved in
assessing whether there is a present obligation
for each defect notice received.
The assessment of whether the requirements of
IAS 37 Provisions, contingent liabilities and
contingent assets have been appropriately
applied is a significant judgement by
management.
Where a present obligation has been identified to
exist at the balance sheet date, a provision
relating to the defect notice has been recognised.
There is a high level of estimation uncertainty in
management’s valuation of the present obligation
and the provision required.
Following the receipt of defect notices on
historical contracts and recent contracts,
management have considered whether a
provision or a contingent liability exists for all
contracts.
A provision for defect notices has been
recognised at 30 September 2024 of £5,821,000
(2023: £nil).
In responding to the key audit matter, we
performed the following audit procedures:
•
Assessed the design and
implementation of controls for the
evaluation of the accounting treatment
for defect notices and valuing a
provision;
•
Made enquiries of management, the
group’s internal legal counsel and,
where applicable, the group’s external
legal counsel to understand
management’s conclusion in relation
to the defect notices received;
•
Obtained and read all correspondence
with customers, and assessed
management’s conclusions, where this
has changed from the prior year,
challenged management regarding the
change of opinion;
•
Read board and other meeting
minutes to identify areas in relation to
defect notices and related provision;
•
Met with the Group’s internal legal
counsel to understand ongoing and
potential legal matters;
Key audit matter
Significant risk
High
Low
Potential
financial
statement
impact
High
Low
Extent of management judgement
Occurrence of
contract revenue
Material
uncertainty
related to going
concern
Completeness of contract
liabilities
Accounting for defect notices
and the completeness of the
defect provision
Management override of
controls
Valuation of goodwill
and intangible assets
Key Audit Matter – Group
How our scope addressed the matter – Group
A contingent liability has been disclosed at 30
September 2024 in respect of certain other defect
notices.
•
Challenged managements
assumptions in valuing the provisions
and whether a present obligation
exists at the Balance Sheet date;
•
Assessed the reasonableness of
management’s likelihood and the
quantification of outflow assessment,
obtaining supporting evidence where
management have determined there is
a provision;
• Reviewed the proposed accounting and
disclosure of actual and potential
liabilities; and
•
Considered management’s application
of the requirements of IAS 37 and the
adequacy of the disclosures.
Relevant disclosures in the Annual Report
2024
•
Financial statements: Note 20, Provisions and
contingent liabilities.
•
Audit committee report: Significant issues
considered in relation to the financial
statements
Our results
From the work performed, we did not identify any
material misstatements with regard to the
accounting for defect notices and the
completeness of the defect provision.
Occurrence of contract revenue
We identified occurrence of contract revenue as
one of the most significant assessed risks of
material misstatement due to fraud and error
The group has entered into contracts with
customers which span the 30 September 2024
year end with varying terms and degrees of
complexity, generating revenue over time. The
group uses both the input and output methods for
recognising revenue over time.
There is a significant risk of material
misstatement in open contracts at 30 September
2024 due to the judgement involved in the related
estimates for revenue recognised over time in
accordance with International Financial Reporting
Standard (‘IFRS’) 15 ‘Revenue from Contracts
with Customers’ and the motivation to meet
market expectations. Management’s assessment
includes several key estimates including:
•
Estimated total contract costs; and
•
Estimated stage of completion derived
from the outputs satisfied.
Total revenue recognised over time is
£30,919,000 (2023: £32,381,000).
In responding to the key audit matter, we
performed the following audit procedures:
•
Assessed the design and
implementation of key controls in the
contract revenue recognition process;
•
Evaluated the revenue recognition
policies for consistency with IFRS 15,
through assessment of management’s
IFRS 15 paper; including, specifically,
consideration of management’s
identification of performance obligations
and allocation of the transaction prices
to the performance obligations;
•
Obtained an understanding of the
process and methods of estimating
costs to complete from project
managers. We assessed whether there
were indicators of management bias in
the assumptions used and corroborated
estimates based on prior experience to
historic data;
•
For a sample of contracts where
revenue is recognised using the input
method, we challenged management’s
total expected costs to assess if revenue
had been recognised correctly. We
compared costs expected with post
period end results and tested a sample
of forecasted costs to supporting
www.tekmargroup.com
110
www.tekmargroup.com
111
www.tekmargroup.com
Key Audit Matter – Group
How our scope addressed the matter – Group
evidence such as purchase invoices,
purchase orders and supplier
quotations. We also tested costs
incurred and recorded in the year to
corroborate each project position at
year-end;
•
For a sample of contracts where
revenue is recognised using the output
method, we evaluated the revenue
assigned to each performance obligation
and/or output and tested whether this is
consistent with the outputs achieved in
the period;
•
Tested the historical accuracy of
forecasting by comparing final outturn of
completed contracts to original
forecasts;
•
Tested a sample of contracts held by the
group and recalculated the revenue that
should have been recognised in the
period and revenue that should have
been deferred at the period end; and
•
Recalculated the period-end contract
liabilities based on management’s
schedules and performed procedures on
a sample basis to ensure schedules
were complete and accurate.
Relevant disclosures in the Annual Report
2024
•
Financial statements: Note 4 Revenue and
segmental reporting
•
Audit committee report: Significant issues
considered in relation to the financial
statements
Our results
From the work performed, we did not identify any
material misstatements with regard to the
occurrence of contract revenue.
Valuation of goodwill and intangible assets
We identified the valuation of goodwill and
intangible assets as one of the most significant
risks of material misstatement due to error,
specifically in relation to the offshore energy cash
generating unit (CGU).
The carrying value of goodwill and other
intangible assets at 30 September 2024 was
£16,708,000 (2023: £19,367,000) after an
impairment charge of £1,546,000 (2023:
£4,745,000).
There is an increased risk that the goodwill and
intangible assets held by the group in relation to
the offshore energy CGU are impaired as per
International Accounting Standard (‘IAS’) 36
‘Impairment of Assets’. This is due to the high
level of estimation uncertainty in management’s
assessment of the future performance of the
CGU and in determining appropriate operating
cash flows, long-term growth rates and discount
In responding to the key audit matter, we
performed the following audit procedures:
•
Assessed the design and
implementation of key controls for the
impairment review process;
•
Assessed management’s identification
of the CGUs and the assignment of
assets to those CGUs;
•
Assessed management’s annual
impairment review to determine those
CGU’s that are most at risk and include
the most judgement. Specifically, those
with limited headroom, significant growth
or high susceptibility to changes in
assumptions;
•
Assessed management’s impairment
model to ensure appropriate costs and
expenses are included, and that cash
flows included in the model are
Key Audit Matter – Group
How our scope addressed the matter – Group
rate to apply in calculating the ‘value in use’ of the
CGU.
We identified a significant risk within the offshore
energy CGU as this CGU has a significantly
material carrying value, significant levels of
growth assumed, and actual performance has
been below budget in the current year.
appropriate when taking into
consideration global macro factors
including, but not limited to supply chain
delays, the impact of inflation on
previously agreed fixed price contracts
and the UK and global economic
outlook;
•
Assessed the short-term and long-term
growth rates included in the model by
comparing the actual results to historical
forecasting, evidencing accuracy;
•
Assessed management’s sensitivity
analysis for appropriateness and
whether a reasonably possible change
would lead to an impairment;
•
Engaged valuation experts to assess the
appropriateness of the discount rate
included in management’s impairment
model; and
•
Assessed whether the disclosure
included for the headroom sensitivities is
appropriate and assessed whether the
accounting policy is in line with IAS 36
Impairment of Assets.
Relevant disclosures in the Annual Report
2024
•
Financial statements: Note 11 Goodwill and
Other Intangibles
•
Audit committee report: Significant issues
considered in relation to the financial
statements
Key observations
From the work performed, our challenge of
management regarding the cash flows and
growth rates included in the impairment model
resulted in a material impairment charge being
recorded.
Following the recording of the impairment charge,
we did not identify any further material
misstatement in the valuation of the goodwill and
intangible assets related to the offshore wind
cash generating unit.
We did not identify any key audit matters relating to the audit of the financial statements of the parent company
only.
Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of
identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in
forming the opinion in the auditor’s report.
Materiality was determined as follows:
Materiality measure
Group
Parent company
Materiality for
financial statements
as a whole
We define materiality as the magnitude of misstatement in the financial
statements that, individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the users of these financial
www.tekmargroup.com
112
www.tekmargroup.com
113
www.tekmargroup.com
Materiality measure
Group
Parent company
statements. We use materiality in determining the nature, timing and extent
of our audit work.
Materiality threshold
£329,000 (2023: £410,000), which
represents approximately 1% of the
group revenue.
£492,000 (2023: £316,000), which
represents approximately 1% of total
assets.
Significant judgements
made by auditor in
determining materiality
In determining materiality, we made
the following significant judgements:
•
The metrics most relevant to the
users of the financial statements
which was determined to be
revenue per the previous
financial statements;
•
Whether the metric has been
materially influenced by matters
such as economic uncertainty or
changes in the marketplace; and
•
This benchmark is considered
the most appropriate because of
the stability of revenue
compared to loss before tax.
Materiality for the current year is
lower than the level that we
determined for the year ended 30
September 2023 to reflect reduction
in group’s revenue.
In determining materiality, we made
the following significant judgements:
•
The metrics most relevant to the
users of the financial statements
which was determined to be
total assets for the parent entity;
•
Whether the metric has been
materially influenced by matters
such as economic uncertainty or
changes in the marketplace; and
•
This benchmark is considered
the most appropriate because
the parent company is a holding
company, which does not trade.
Materiality for the current year is
higher than the level that we
determined for the year ended 30
September 2023, as materiity in the
prior year was capped at component
materiality.
Performance
materiality used to
drive the extent of
our testing
We set performance materiality at an amount less than materiality for the
financial statements as a whole to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a whole.
Performance
materiality threshold
£231,000 (2023: £287,000), which is
70% of financial statement
materiality.
£369,000 (2023: £221,000), which is
75% (2023: 70%) of financial
statement materiality.
Significant judgements
made by auditor in
determining
performance
materiality
In determining performance
materiality, we made the following
significant judgements:
•
The strength of the control
environment based on our
assessment of the design and
implementation of controls;
and
•
Quantum and nature of
misstatements identified in
prior year’s audit.
In determining performance
materiality, we made the following
significant judgements:
•
The strength of the control
environment based on our
assessment of the design and
implementation of controls; and
•
Low complexity of the principal
actitvity.
Materiality measure
Group
Parent company
Specific materiality
We determine specific materiality for one or more particular classes of
transactions, account balances or disclosures for which misstatements of
lesser amounts than materiality for the financial statements as a whole could
reasonably be expected to influence the economic decisions of users taken
on the basis of the financial statements.
Specific materiality
We determined a lower level of
specific materiality for the following
areas:
•
Directors’ remuneration; and
•
Related party transactions
outside the normal course of
business.
We determined a lower level of
specific materiality for the following
areas:
•
Directors’ remuneration; and
•
Related party transactions
outside the normal course of
business.
Communication of
misstatements to the
audit committee
We determine a threshold for reporting unadjusted differences to the audit
committee.
Threshold for
communication
£16,500 (2023: £20,500), which
represents 5% of financial statement
materiality, and misstatements below
that threshold that, in our view,
warrant reporting on qualitative
grounds.
£24,600 (2023: £15,800), which
represents 5% of financial statement
materiality, and misstatements
below that threshold that, in our view,
warrant reporting on qualitative
grounds.
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for
communication to the audit committee.
Overall materiality - Group
Overall materiality - Parent
Revenue, £32.8m
FSM £329,000, 1%
Total Assets, £50.3m
FSM £492,000, 1%
www.tekmargroup.com
114
www.tekmargroup.com
115
www.tekmargroup.com
FSM: Financial statement materiality, PM: Performance materiality, TfC: Threshold for communication to the
audit committee.
An overview of the scope of our audit
We performed a risk-based audit that requires an understanding of the group’s and the parent company’s
business and in particular matters related to:
Understanding the group, its components, their environments, including group-wide controls
•
We obtained an understanding of the group and its environment, including group-wide controls and assessed
the risks of material misstatement at the group level; and
•
We obtained an understanding of the effect of the group organisational structure on the scope of the audit, for
example, the level of centralisation of the group control function and the use of service organisations.
Identifying components at which to perform audit procedures
•
We evaluated the identified components to assess their significance and determined the planned audit
response based on a measure of materiality. Significance was determined as a percentage of the group’s
total revenue and the group’s absolute loss before tax as well as considering qualitative factors, such as a
component’s specific nature or circumstances.
Type of work to be performed on financial information of parent and other components (including how it
addressed the key audit matters)
•
Audits of the financial information of the component using component materiality (full-scope audit) procedures
were performed on the financial information of three components. These procedures included a combination
of tests of detail and analytical procedures. These full-scope audits included the majority our audit work on the
identified key audit matters as described in the key audit matters section of our report.
•
Audits of one or more account balances, classes of transactions or disclosures of the component (specific-
scope audit) procedures were carried out on two component using component materiality. These procedures
included a combination of tests of details and analytical procedures and were designed to increase coverage
of the group’s financial statement line items. This specific-scope audit included audit work on one of the
identified key audit matters as described in the key audit matters section of our report.
•
Specified audit procedures were carried out on two components using component materiality.
FSM £329,000,
1%
PM £231,000,
70%
TfC £16,500,
5%
FSM £492,000,
1%
PM £369,000,
70%
TfC £24,600,
5%
•
For the eight components that were not individually significant to the group, or assessed as requiring specific-
scope audits, analytical procedures were carried out at group level, using group materiality.
Performance of our audit
•
the evaluation of management’s going concern assessment was performed at a group level given the group
structure and capital management policies;
•
the group engagement team attended year-end inventory counts in the UK;
•
audit procedures across all components were performed by the group engagement team in accordance with
the scope described. There were no component engagement teams engaged to support the group
engagement team; and
•
as part of planning procedures, the group engagement team assessed the group’s internal control
environment including controls in relation to its IT systems and controls to inform our risk assessment. The
audit testing approach was wholly substantive.
•
Audit approach
No. of
components
% coverage
revenue
% coverage loss
before tax (on
absolute basis)
Full-scope audit
3 (2023: 3)
96 (2023: 83)
47 (2023: 60)
Specific-scope
procedures
- (2023: 1)
- (2023: 11)
- (2023: 3)
Specified audit
procedures
3 (2023: 2)
3 (2023: 4)
50 (2023: 30)
Analytical
procedures
8 (2023: 8)
1 (2023: 2)
3 (2023: 7)
Total
14 (2023: 14)
100
100
Changes in approach from previous period
•
We performed specified audit procedures on the discontinued operation, which in the previous year was
specific-scope procedures.
Other information
The other information comprises the information included in the annual report, other than the financial statements
and our auditor’s report thereon. The directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we
are required to determine whether there is a material misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
www.tekmargroup.com
116
www.tekmargroup.com
117
www.tekmargroup.com
•
the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the group and the parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 86, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent
company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below:
•
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and
the parent company and determined that the most significant are applicable law and UK-adopted international
accounting standards (for the group), United Kingdom Generally Accepted Accounting Practice (for the parent
company) and UK corporation tax regulations.
•
We obtained an understanding of the legal and regulatory frameworks applicable to the company and the
industry in which it operates through our general and commercial and sector experience, discussions with
management and legal correspondence. We also discussed the relevant frameworks with company legal
advisors as appropriate.
•
We obtained an understanding of how the company is complying with those legal and regulatory frameworks
by making inquiries of management and of those responsible for legal and compliance procedures. We
corroborated our inquiries through our review of board minutes.
•
We assessed the susceptibility of the group's and the parent company’s financial statements to material
misstatement, including how fraud might occur, by evaluating management's incentives and opportunities for
manipulation of the financial statements. This included the evaluation of the risk of management override of
controls. We determined that the principal risks were in relation to:
-
journal entries posted by senior finance personnel;
-
journal entries credited to the income statement above earnings before interest, tax, depreciation and
amortisation (‘EBITDA’) and corresponding debit entry below EBITDA or to the balance sheet.
-
journal entries above a set threshold posted to revenue from an unexpected general ledger code; and
-
material post-close and consolidating journal entries;
•
Audit procedures performed by the engagement team included:
evaluating the processes and controls established to address the risks related to irregularities and fraud;
journal entry testing, in particular those journals determined to be in respect of our principal risk
documented above; and
challenging assumptions and judgements made by management in its significant accounting estimates.
•
These audit procedures were designed to provide reasonable assurance that the financial statements were
free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk
of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more
difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment,
forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations
is from events and transactions reflected in the financial statements, the less likely we would become aware
of it;
•
The engagement partner’s assessment of the appropriateness of the collective competence and capabilities
of the engagement team including consideration of the engagement team's:
-
understanding of, and practical experience with, audit engagements of a similar nature and complexity
through appropriate training and participation
-
knowledge of the industry in which the group and the parent company operate; and
-
understanding of the legal and regulatory requirements specific to the group and the parent company.
•
We had team communications in respect of potential non-compliance with laws and regulations and fraud
including the potential for fraud in revenue recognition through manipulation of the forecast costs to complete
and through incomplete contract liabilities.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
www.tekmargroup.com
118
www.tekmargroup.com
119
www.tekmargroup.com
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Victoria McLoughlin
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Leeds
3 March 2025
Financial Statements
Consolidated Statement of
Comprehensive Income
Note
12M ended
30 Sep
2024
12M ended
30 Sep
2023
Restated
£000
£000
Revenue
4
32,808
35,633
Cost of sales
6
(22,291)
(27,319)
Gross profit
10,517
8,314
Other administrative expenses
6
(13,195)
(16,258)
Expected credit loss
16
(520)
-
Warranty provision
20
(656)
-
Total administrative expenses
(14,371)
(16,258)
Other operating income
22
18
Group operating loss
(3,832)
(7,926)
Analysed as:
Adjusted EBITDA[1]
4
1,715
569
Depreciation
12
(1,277)
(1,172)
Amortisation
11
(366)
(586)
Exceptional Share based payments charges
26
(160)
(500)
Impairment of goodwill
11
(1,546)
(4,745)
Exceptional bonus payments
-
(296)
Exceptional IT costs
(169)
-
Foreign exchange (losses)/gains
(623)
(928)
Warranty provision
(656)
-
Expected credit loss
(520)
-
Restructuring costs
(230)
(268)
Group operating (Loss)
(3,832)
(7,926)
Finance costs
(727)
(627)
Finance income
19
4
Net finance costs
7
(708)
(623)
(Loss) before taxation from continuing operations
(4,540)
(8,549)
Taxation
9
(557)
(201)
(Loss) for the period from continuing operation
(5,097)
(8,750)
Discontinued operations
27
(1,316)
(1,374)
(Loss) for the period
(6,413)
(10,124)
for the year ended 30 September 2024
www.tekmargroup.com
120
www.tekmargroup.com
121
www.tekmargroup.com
Consolidated Statement of Comprehensive Income continued
Note
12M ended
30 Sep
2024
12M ended
30 Sep
2023
Restated
Items which will not be reclassified subsequently to profit or loss
Revaluation of property
75
-
Items which will be reclassified subsequently to profit or loss
Retranslation of overseas subsidiaries
(333)
(281)
Total comprehensive loss for the period
(6,671)
(10,405)
Loss attributable to owners of the parent
(6,413)
(10,124)
Total comprehensive income attributable to owners of the parent
(6,671)
(10,405)
(Loss) per share (pence) from continuing operations
Basic
10
(3.74)
(9.24)
Diluted
10
(3.74)
(9.24)
(Loss) per share (pence) from discontinued operations
Basic
10
(0.97)
(1.45)
Diluted
10
(0.97)
(1.45)
1: Adjusted EBITDA, which is defined as profit before net finance costs, tax, depreciation, amortisation, share based payments charge in
relation to one-off awards, material items of a one-off nature and significant items which allow comparable business performance is a non-
GAAP metric used by management and is not an IFRS disclosure.
2: Comparative period has been restated to reclassify Subsea Innovation Limited results as discontinued operations.
3: The statement of other comprehensive income comparative period has been restated to remove equity settled share-based payments,
which has increased the total comprehensive loss by £548,000. This credit entry has now been presented within transactions with owners in
the statement of changes in equity. This has no impact on retained losses.
Financial Statements
Consolidated Balance Sheet
Note
30 Sep
2024
30 Sep
2023
£000
£000
Non-current assets
Property, plant and equipment
12
4,514
6,808
Goodwill and other intangibles
11
16,708
19,367
Investment property
13
2,842
-
Total non-current assets
24,064
26,175
Current assets
Inventory
15
1,878
2,127
Trade and other receivables
16
20,336
19,734
Cash and cash equivalents
17
4,630
5,219
Total current assets
26,844
27,080
Total assets
50,908
53,255
Equity and liabilities
Share capital
24
1,373
1,360
Share premium
72,202
72,202
Merger relief reserve
744
1,738
Merger reserve
(12,685)
(12,685)
Foreign currency translation reserve
(441)
(108)
Retained losses
(33,029)
(27,854)
Total equity
28,164
34,653
Non-current liabilities
Other interest-bearing loans and borrowings
19
924
834
Trade and other payables
18
-
327
Deferred tax liability
21
234
503
Provisions
20
656
-
Total non-current liabilities
1,814
1,664
as 30 September 2024
for the year ended 30 September 2024
www.tekmargroup.com
122
www.tekmargroup.com
123
www.tekmargroup.com
Consolidated Balance Sheet continued
Financial Statements
Consolidated statement of
changes in equity
Note
30 Sep
2024
30 Sep
2023
Current liabilities
Other interest-bearing loans and borrowings
19
6,554
7,046
Trade and other payables
18
8,503
9,398
Corporation tax payable
647
29
Provisions
20
5,226
465
Total current liabilities
20,930
16,938
Total liabilities
22,744
18,602
Total equity and liabilities
50,908
53,255
The Group financial statements were approved by the Board and authorised for issue on 3 March 2025 and
were signed on its behalf by:
Leanne Wilkinson
Chief Financial Officer
Company registered number: 11383143
Share
capital
Share
premium
Merger
relief
reserve
Merger
reserve
Foreign
currency
translation
reserve
Retained
losses
Total equity
attributable to
owners of the
parent
Total
equity
£000
£000
£000
£000
£000
£000
£000
£000
Balance at 1 October
2022
609
67,653
1,738 (12,685)
173
(18,278)
39,210
39,210
Loss for the Period
-
-
-
-
-
(10,124)
(10,124) (10,124)
Exchange difference on
translation of overseas
subsidiary
-
-
-
-
(281)
-
(281)
(281)
Total comprehensive
income for the year
-
-
-
-
(281)
(10,124)
(10,405) (10,405)
Share based payments
-
-
-
-
-
548
548
548
Issue of shares
751
4,549
-
-
-
-
5,300
5,300
Total transactions with
owners, recognised
directly in equity
751
4,549
-
-
-
548
5,848
5,848
Balance at 30
September 2023
1,360
72,202
1,738 (12,685)
(108)
(27,854)
34,653
34,653
Loss for the Period
-
-
-
-
-
(6,413)
(6,413)
(6,413)
Revaluation of property
-
-
-
-
-
75
75
75
Exchange difference on
translation of overseas
subsidiary
-
-
-
-
(333)
-
(333)
(333)
Total comprehensive
(loss) for the year
-
-
-
-
(333)
(6,338)
(6,671)
(6,671)
Share based payments
-
-
-
-
-
169
169
169
Issue of shares, net of
transaction costs
13
-
-
-
-
-
13
13
Total transactions with
owners, recognised
directly in equity
13
-
-
-
-
169
182
182
Transfer following
disposal of subsidiary
-
(994)
-
-
994
-
-
Balance at 30
September 2024
1,373
72,202
744 (12,685)
(441)
(33,029)
28,164
28,164
as 30 September 2024
for the year ended 30 September 2024
www.tekmargroup.com
124
www.tekmargroup.com
125
www.tekmargroup.com
Financial Statements
Consolidated cash flow statement
12M ended
30 Sep 2024
12M ended
30 Sep 2023
£000
£000
Cash flows from operating activities
Loss before taxation
(5,856)
(9,923)
Adjustments for:
Depreciation
1,365
1,327
Amortisation of intangible assets
483
763
Loss on disposal of fixed assets
41
-
Share based payments charge
193
537
Loss on disposal of discontinued operations
1,316
-
Impairment of goodwill
1,546
4,745
Unrealised foreign gains
(276)
-
Finance costs
727
552
Finance income
(19)
(4)
(480)
(2,003)
Changes in working capital:
Decrease in inventories
82
2,496
(Increase) in trade and other receivables
(2,533)
(6,360)
Increase / (decrease) in trade and other payables
790
(272)
Increase in provisions
5,439
465
Cash generated from / (used in) operations
3,298
(5,674)
Tax recovered
-
-
Net cash inflow / (outflow) from operating activities
3,298
(5,674)
Cash flows from investing activities
Purchase of property, plant and equipment
(1,697)
(1,012)
Purchase of intangible assets
(235)
(310)
Proceeds on sale of property, plant and equipment
71
29
Proceeds/(outflows) from sale of subsidiary
(112)
-
Interest received
19
4
Net cash (outflow) from investing activities
(1,954)
(1,289)
Cash flows from financing activities
Facility drawdown
Facility repayment
Repayment of borrowings under lease obligations
11,413
(11,805)
(436)
11,526
(11,941)
(414)
Shares issued
13
5,300
Interest paid
(795)
(505)
Net cash (outflow)/inflow from financing activities
(1,610)
3,966
Net decrease in cash and cash equivalents
(266)
(2,997)
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
5,219
(322)
8,496
(280)
Cash and cash equivalents at end of year
4,630
5,219
Notes to the Group financial
statements
1. GENERAL INFORMATION
Tekmar Group plc (the “Company”) is a public limited
company incorporated and domiciled in England and
Wales. The registered office of the Company is Grindon
Way, Aycliffe Business Park, Newton Aycliffe, DL5 6SH.
The registered company number is 11383143.
The principal activity of the Company and its
subsidiaries (together the “Group”) is that of design,
manufacture and supply of subsea stability and
protection technology, including associated subsea
engineering services, operating across the global
offshore energy markets, predominantly Offshore
Wind.
Forward looking statements
Certain statements in this Annual report are forward
looking. The terms “expect”, “anticipate”, “should be”,
“will be” and similar expressions identify forward-
looking statements. Although the Board of Directors
believes that the expectations reflected in these
forward-looking statements are reasonable, such
statements are subject to a number of risks and
uncertainties and events could differ materially from
those expressed or implied by these forward-looking
statements.
2. BASIS OF PREPARATION AND ACCOUNTING
POLICIES
The Group’s principal accounting policies have been
applied consistently to all of the years presented,
with the exception of the new standards applied for
the first time as set out in paragraph (c) below where
applicable.
(a) Basis of preparation
The results for the year ended 30 September 2024
have been prepared in accordance with UK-adopted
International Accounting Standards (“IFRS”). The
financial statements have been prepared on the going
concern basis and on the historical cost convention
modified for the revaluation of Investment property and
Freehold property, and certain financial instruments.
The comparative period represents 12 months to 30
September 2023.
Tekmar Group plc (“the Company”) has adopted all
IFRS in issue and effective for the year.
(a) Going concern
The Group meets its day-to-day working capital
requirements through its available banking facilities
which includes a CBILs loan of £3.0m currently
available to 31 October 2025 and a trade loan facility
of up to £4.0m that can be drawn against supplier
payments, currently available to 31 July 2025. The
latter is provided with support of 80% from UKEF
due to the nature of the business activities both in
renewable energies and in driving growth through
export lead opportunities. The Group held £4.6m of
cash at 30 September 2024 including draw down of
the £3.0m CBILS loan and a further £3.1m of the trade
loan facility. There are no financial covenants that the
Group must adhere to in either of the bank facilities.
The Directors have prepared cash flow forecasts to
31 March 2026. The base case forecasts include
assumptions for annual revenue growth supported
by current order book, known tender pipeline, and by
publicly available market predictions for the sector.
The forecasts also assume a retention of the costs
base of the business with increases of 5% on salaries
and consistent gross margin on contracts. These
forecasts show that the Group is expected to have
a sufficient level of financial resources available
to continue to operate on the assumption that the
two facilities described are renewed and refinanced
respectively. Within the base case model management
have modelled the outflow of cash of £5.8m in relation
to note 20 Provisions within the going concern period
which is offset against the corresponding insurance
receivable within the same period, Management have
not modelled anything in relation to the matter set out
in note 20 Contingent Liabilities, as management have
assessed there to be no present obligation.
for the year ended 30 September 2024
for the year ended 30 September 2024
www.tekmargroup.com
126
www.tekmargroup.com
127
www.tekmargroup.com
The Directors have sensitised their base case forecasts
for a severe but plausible downside impact. This
sensitivity includes reducing revenue by 17% (£10m
equivalent) for 18 month the period to 31 March 2026,
to model the potential loss or delay of a certain level
of contracts in the pipeline that form the base case
forecast, and a further 5% increase in costs across the
Group as a whole for the same period. In addition, the
delays of specific cash receipts have been modelled.
The base case and sensitised forecast also include
discretionary spend on capital outlay. The Directors
note there is further discretionary spend within their
control which could be cut, if necessary, although this
has not been modelled in the sensitised case given
the headroom already available. These sensitivities
have been modelled to give the Directors comfort in
adopting the going concern basis of preparation for
these financial statements. Further to this, a ‘reverse
stress test’ was performed to determine at what point
there would be a break in the model, the reverse stress
test included reducing order intake by £15m (60% of
unsecured revenue) and increasing overheads by
7% against the base case. In addition, the delays of
specific cash receipts have been modelled, this results
in elimination of liquidity headroom in the final month
in the going concern period. The severe but plausible
case includes mitigating actions such as delayed
capital expenditure spend.
Facilities - Within the base case, severe but plausible
case and reverse stress test, management have
assumed the renewal of trade loan facility in July 2025
and renewal or conversion of the CBILS loan into a
term loan in October 2025. In the unlikely case that the
facilities are not renewed, the Group would aim to take
a number of co-ordinated actions designed to avoid
the cash deficit that would arise.
The Directors are confident, based upon the
communications with the team at Barclays, the
historical strong relationship and recent bank facility
renewal in November 2024, that these facilities will
be renewed and will be available for the foreseeable
future. The renewal of the two facilities in October
2025 and July 2025 are yet to be formally agreed and
the Group’s forecasts rely on their renewal.
Contract Award and timings – In the severe but plausible
scenario, management has adjusted the base case
forecast to account for the potential downside impact
of order intake not being converted within the expected
timescales. This adjustment results in a 17% reduction
in revenue over the entire going concern period. This
sensitised model shows that there is sufficient cash
headroom to continue to operate the business.
The Group operates on a contract basis and during
the normal course of business, contracts are expected
to be executed within specific timeframes during the
forecast period. If the Group fails to secure a number
of significant contracts, in line with its forecasted
timeframes, during a period of lower cash reserves
cash headroom would be breached. Management
does not consider this to be a likely outcome based
on current backlog levels being representative of
prior periods coupled with a strong pipeline visibility,
opportunities at preferred supplier status and further
anticipated contracts awards within the required
timescales. Such contract awards would provide
sufficient cash resources for the going concern period.
Both the required renewal of the facilities and contract
award timing represent events or conditions which
would indicate a material uncertainty that may cast
significant doubt on the Group’s and the parent
company’s ability to continue as a going concern.
The Directors are satisfied that, taking account
of reasonably foreseeable changes in trading
performance and on the basis that the bank facilities
are renewed, these forecasts and projections show
that the Group is expected to have a sufficient level of
financial resources available through current facilities
to continue in operational existence and meet its
liabilities as they fall due for at least the next 12 months
from the date of approval of the financial statements
and for this reason they continue to adopt the going
concern basis in preparing the financial statements.
Notes to the Group financial statements continued
(c) New standards, amendments and interpretations
The new standards, amendments or interpretations
issued in the year, with which the Group has to comply
with, have not had a significant effect impact on the
Group. There are no standards endorsed but not yet
effective that will have a significant impact going
forward.
(d) Basis of consolidation
Subsidiaries are all entities over which the Group has
control. The Group controls an entity when the Group
is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to
affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on
which control is transferred to the Group and are
deconsolidated from the date control ceases. Inter-
company transactions, balances and unrealised gains
and losses on transactions between Group companies
are eliminated.
(e) Revenue
Revenue (in both the offshore energy and the marine civils
markets) arises from the supply of subsea protection
solutions and associated equipment, principally through
fixed fee contracts. There are also technical consultancy
services delivered through subsea energy.
To determine how to recognise revenue in line with IFRS
15, the Group follows a 5-step process as follows:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance
obligations
5. Recognising revenue when / as performance
obligation(s) are satisfied
Revenue is measured at transaction price, stated net of
VAT and other sales related taxes.
Revenue is recognised either at a point in time, or over-
time as the Group satisfies performance obligations by
transferring the promised services to its customers as
described below.
(i) Fixed-fee contracted supply of subsea protection
solutions
For the majority of revenue transactions, the Group enters
individual contracts for the supply of subsea protection
solutions, generally for a specific project in a particular
geographic location. Each contract generally has one
performance obligation, to supply subsea protection
solutions. When the contracts meet one or more of the
criteria within step 5, including the right to payment for the
work completed, including profit should the customer
terminate, then revenue is recognised over time. If the
criteria for recognising revenue over time is not met,
revenue is recognised at a point in time, normally on the
transfer of ownership of the goods to the customer.
For contracts where revenue is recognised over time, an
assessment is made as to the most accurate method
to estimate stage of completion. This assessment is
performed on a contract-by-contract basis to ensure that
revenue most accurately represents the efforts incurred
on a project. For the majority of contracts this is on
an inputs basis (costs incurred as a % of total forecast
costs).
There are also contracts which include the manufacture
of a number of separately identifiable products. In
such circumstances, as the deliverables are distinct,
each deliverable is deemed to meet the definition of a
performance obligation in its own right and do not meet
the definition under IFRS of a series of distinct goods or
services given how substantially different each item is.
Revenue for each item is stipulated in the contract and
revenue is recognised over time as one or more of the
criteria for over time recognition within IFRS 15 are met.
Generally, for these items, an output method of estimating
stage of completion is used as this gives the most
accurate estimate of stage of completion. On certain
contracts variation orders are received as the scope of
contract changes, these variation orders are considered
on a case by case basis to determine whether they form
a seperate performance obligation in their own right or
an addition to the orignial performance obligation. The
same revenue recognition criteria discuss above is then
applied to the variation order.
www.tekmargroup.com
128
www.tekmargroup.com
129
www.tekmargroup.com
In all cases, any advance billings are deferred and
recognised as the service is delivered.
(ii) Manufacture and distribution of ancillary products,
equipment.
The Group also receives a proportion of its revenue
streams through the sale of ancillary products and
equipment. These individual sales are formed of
individual purchase orders for which goods are
ordered or made using inventory items. These items
are recognised on a point in time basis, being the
delivery of the goods to the end customer.
(iii) Provision of consultancy services
The entities within the offshore energy division
also provide consultancy-based services whereby
engineering support is provided to customers. These
contracts meet one or more of the criteria within step 5,
including the right to payment for the work completed,
including profit should the customer terminate.
Revenue is recognised over time on these contracts
using the inputs method.
Tekmar Group plc applies the IFRS 15 Practical
expedient in respects of determining the financing
component of contract consideration: An entity need
not adjust the promised amount of consideration for
the effects of a significant financing component if the
entity expects, at contract inception, that the period
between when the entity transfers a promised good or
service to a customer and when the customer pays for
that good or service will be one year or less.
Accounting for revenue is considered to be a key
accounting judgement which is further explained in
note 3.
(f) EBITDA and Adjusted EBITDA
Earnings before Interest, Taxation, Depreciation and
Amortisation (“EBITDA”) and Adjusted EBITDA are non-
GAAP measures used by management to assess the
operating performance of the Group. EBITDA is defined
as profit before net finance costs, tax, depreciation
and amortisation. Material items of a one-off nature
or of such significance they are considered relevant to
the user of the financial statements and share based
payment charge in relation to one-off awards are
excluded.
The Directors primarily use the Adjusted EBITDA
measure when making decisions about the Group’s
activities. As these are non-GAAP measures, EBITDA
and Adjusted EBITDA measures used by other entities
may not be calculated in the same way and hence are
not directly comparable.
(g) Foreign currency
Transactions in foreign currencies are translated into
the Group’s presentational currency at the foreign
exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign
currencies at the balance sheet date are translated
at the foreign exchange rate ruling at that date.
Non-monetary items carried at fair value that are
denominated in foreign currencies are translated at
the rates prevailing at the date when the fair value was
determined. Non-monetary items that are measured in
terms of historical cost in a foreign currency are not
retranslated. Foreign exchange differences arising on
translation are recognised in the Statement of Other
Comprehensive Income.
(h) Classification of instruments issued by the Group
Instruments issued by the Group are treated as equity
(i.e. forming part of shareholders’ funds) only to the
extent that they meet the following two conditions:
•
they include no contractual obligations upon the
Group to deliver cash or other financial assets or
to exchange financial assets or financial liabilities
with another party under conditions that are
potentially unfavourable to the Group; and
•
where the instrument will or may be settled in the
Company’s own equity instruments, it is either a
non-derivative that includes no obligation to deliver
a variable number of the Company’s own equity
instruments or is a derivative that will be settled by
the Company exchanging a fixed amount of cash
or other financial assets for a fixed number of its
own equity instruments.
Notes to the Group financial statements continued
To the extent that this definition is not met, the items are
classified as a financial liability. Where the instrument
so classified takes the legal form of the Company’s
own shares, the amounts presented in these financial
statements for called up share capital and share
premium account exclude amounts in relation to those
shares.
Finance payments associated with financial liabilities
are dealt with as part of finance expenses. Finance
payments associated with financial instruments that
are classified in equity are dividends and are recorded
directly in equity.
(i) Property, plant and equipment
Property, plant and equipment are stated at cost
less accumulated depreciation and any recognised
impairment loss with the exception of Freehold Property
Properties whose fair value can be measured reliably
are held under the revaluation model and are carried at a
revalued amount, being fair value at the date of valuation
less any subsequent accumulated depreciation and
subsequent impairment losses. The fair value of land
and building is considered to be their market value.
Revaluation gains and losses are recognised in other
comprehensive income and accumulated in equity,
except to the extent that a revaluation gain reverses a
revaluation loss previously recognised in profit or loss, or
a revaluation loss exceeds the accumulated revaluation
gains recognised in equity; such gains and losses are
recognised in profit or loss.
Leased property is accounted for as a “right-of-use” asset
under IFRS 16 Leases. The initial value of a right-of-use
asset is determined by the value of the lease liability.
Depreciation
Depreciation is charged to profit or loss over the
estimated useful lives of each part of an item of
property, plant and equipment. Depreciation is
provided on the following basis:
Freehold property
50 years straight line
Leasehold improvements
Over the life of the
lease
Plant and equipment
3 years straight line
or 6 years reducing
balance or 15–25%
straight line
Fixtures & fittings
4 years straight line
Motor vehicles
4 years reducing
balance or straight
line
Computer equipment
4 years straight line
IFRS16 ROU Assets
In line with lease term
It has been assumed that all assets will be used until
the end of their economic life.
(j) Investment property
Investment property is property held to earn rentals
and is accounted for using the fair value model.
Investment property is revalued annually with
resulting gains and losses recognised in Statement
of Comprehensive Income. This is included in the
consolidated statement of financial position and their
fair values. See note 13.
(k) Intangible assets
Goodwill
All business combinations are accounted for by
applying the purchase method. Goodwill represents
the difference between the cost of the acquisition
and the fair value of the net identifiable assets
acquired. Identifiable intangibles are those which
can be sold separately, or which arise from legal or
contractual rights regardless of whether those rights
are separable and are initially recognised at fair value.
Other identified intangible assets include customer
relationships and brands. These are amortised on
a straight-line basis over the useful economic lives,
which are estimated to be 3 and 10 years respectively.
Goodwill is stated at cost less any accumulated
impairment losses. In cases where the fair value
of the net identifiable assets exceeds the cost
of acquisition, negative goodwill arises which is
recorded immediately in the income statement.
Goodwill is allocated to cash-generating units and is
not amortised but is tested annually for impairment.
www.tekmargroup.com
130
www.tekmargroup.com
131
www.tekmargroup.com
Research and Product Development costs
Research costs are charged to the income statement
in the year in which they are incurred and are presented
within operating expenses. Internal development costs
that are incurred during the development of significant
and separately identifiable new technology are
capitalised when the following criteria are met:
•
It is technically feasible to complete the
technological development so that it will be
available for use;
•
Management intends to complete the technological
development and use or sell it;
•
It can be demonstrated how the technological
development
will
develop
probable
future
economic benefits;
•
Adequate technical, financial, and other resources
to complete the development and to use or sell the
product are available; and
•
Expenditure attributable to the technological
product during its development can be reliably
measured.
Capitalised development costs include costs of
materials and direct labour costs. Internal costs that
are capitalised are limited to incremental costs specific
to the project.
Other development expenditures that do not meet
these criteria are recognised as an expense as incurred
and presented within operating expenses, together
with any amortisation which is charged to the income
statement on a straight-line basis over the estimated
useful lives of product development intangible assets
of 2-5 years.
Computer software
Computer software purchased separately, that does
not form an integral part of related hardware, is
capitalised at cost.
Amortisation
is
charged
to
Statement
of
Comprehensive Income on a straight-line basis over
the estimated useful lives and is presented within
operating expenses. The useful life of computer
software is 3 years.
(l) Impairment
Goodwill is not amortised but is reviewed for
impairment at least annually, or when there is an
indication of impairment. Intangible assets which are
not yet available for use are tested for impairment
annually. For other assets, the recoverable amount
is only estimated when there is an indication that
an impairment may have occurred. The recoverable
amount is the higher of fair value less costs to sell
and value in use.
An impairment loss is recognised whenever the
carrying amount of an asset or its cash-generating
unit exceeds its recoverable amount. Impairment
losses are recognised in profit or loss.
Impairment losses recognised in respect of cash-
generating units are allocated first to reduce the
carrying amount of any goodwill allocated to the cash-
generating unit and then to reduce the carrying amount
of the other assets in the unit on a pro rata basis. A
cash generating unit is the smallest identifiable Group
of assets that generates cash inflows that are largely
independent of the cash inflows from other assets or
Groups of assets.
(m) Inventories
Inventories are stated at the lower of cost and
estimated selling price less costs to complete and
sell. Cost is calculated on a first in first out basis
and includes the cost of acquiring raw materials.
Provision is made for any foreseeable losses where
appropriate.
(n) Defined contribution plans
Obligations for contributions to defined contribution
pension plans are recognised as an expense in profit
or loss as incurred.
Notes to the Group financial statements continued
(o) Provisions and contingent liabilities
A provision is recognised in the balance sheet when
the Group has a present legal or constructive obligation
as a result of a past event, and it is probable that an
outflow of economic benefits will be required to settle
the obligation. If the effect is material, provisions
are determined by discounting the expected future
cash flows at pre-tax rate that reflects current market
assessments of the time value of money and, where
appropriate, the risks specific to the liability.
A contingent liability is a possible obligation that
arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly
within the control of the entity. A contingent liability is
a disclosure in the notes to the financial statements
only.
(p) Leases
At inception of a contract, the Group assesses whether
a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of
time in exchange for consideration.
The Group recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-
use asset is initially measured at cost, which comprises
the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement
date, plus any initial direct costs incurred and an
estimate of costs to restore the underlying asset, less
any lease incentives received.
The right-of-use asset is subsequently depreciated
using the straight-line method from the commencement
date to the earlier of the end of the useful life of the
right-of-use asset or the end of the lease term. In
addition, the right-of-use asset is periodically reduced
by impairment losses, if any, and adjusted for certain
remeasurements of the lease liabilities.
The lease liability is initially measured at the present
value of lease payments that were not paid at the
commencement date, discounted using the Group’s
incremental borrowing rate.
The lease liability is measured at amortised cost
using the effective interest method. If there is a
remeasurement of the lease liability, a corresponding
adjustment is made to the carrying amount of the right-
of-use asset or is recorded directly in profit or loss if
the carrying amount of the right of use asset is zero.
The Group has elected not to recognise right-of-use
assets and lease liabilities for short-term leases that
have a lease term of less than 12 months or leases of
low value assets. These lease payments are expensed
on a straight-line basis over the lease term.
(q) Net financing costs
Net financing costs comprise interest payable and
interest receivable on funds invested. Interest income
and interest payable are recognised in profit or loss as
they accrue using the effective interest method.
(r) Taxation
Tax on the profit or loss for the period comprises current
and deferred tax. Tax is recognised in profit or loss
except to the extent that it relates to items recognised
in other comprehensive income or directly in equity,
in which case it is recognised in other comprehensive
income or in equity, respectively.
Current tax is the expected tax payable on the taxable
income for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and
any adjustment to tax payable in respect of previous
years.
Deferred tax is provided on temporary differences
between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used
for taxation purposes, except to the extent that it arises
on:
•
the initial recognition of goodwill;
•
the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other
than in a business combination;
•
differences relating to investments in subsidiaries
to the extent that they will probably not reverse in
the foreseeable future.
The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax
rates enacted or substantively enacted at the balance
sheet date.
www.tekmargroup.com
132
www.tekmargroup.com
133
www.tekmargroup.com
A deferred tax asset is recognised only to the extent
that it is probable that future taxable profits will be
available against which the asset can be utilised.
(s) Cash and cash equivalents
Cash and cash equivalents comprise cash balances
and call deposits.
(t) Financial instruments
Financial assets
Non-derivative financial assets are classified as
either financial assets at amortised cost, fair value
through profit or loss and fair value through other
comprehensive income. The Group derecognises a
financial asset when the contractual rights to the cash
flows from the asset expire, or it transfers the rights
to receive the contractual cash flows in a transaction
in which substantially all of the risks and rewards of
ownership of the financial asset are transferred. The
basis of classification depends on the Group’s business
model and the contractual cash flow characteristics of
the financial asset. All financial assets of the Group
are held at amortised cost, which the exception of
derivative financial instruments which are held at
FVTPL.
Financial assets include trade and other receivables
and cash and cash equivalents. Trade and other
receivables are amounts due from customers for
services performed in the ordinary course of business.
If collection is expected in one year or less (or in the
normal operating cycle of the business if longer),
they are classified as current assets. If not, they are
presented as non-current assets.
Trade and other receivables are initially recorded
at transaction price and thereafter are measured at
amortised cost using the effective interest rate. A loss
allowance for expected credit losses on trade and
other receivables and contract assets is measured at
an amount equal to the lifetime expected credit losses.
Lifetime expected credit losses are the expected
credit losses that will result from all possible default
events over the expected life of a financial instrument.
This assessment is performed on a collective basis
considering forward-looking information. The Group
considers a financial asset to be in default when the
receivable is unlikely to pay its credit obligations to the
Group in full without recourse by the Group to actions
such as realising security (if any is held).
Financial liabilities
Non-derivative
financial
liabilities
are
initially
recognised at fair value less any directly attributable
transaction costs. Subsequent to initial recognition,
these liabilities are measured at amortised cost using
the effective interest method. The Group’s borrowings,
finance leases, trade and most other payables fall into
this category of financial instruments.
The Group derecognises a financial liability when its
contractual obligations are discharged, cancelled, or
expire.
Interest-bearing borrowings are recognised initially
at fair value less attributable transaction costs.
Subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost with any
difference between cost and redemption value
being recognised in profit or loss over the year of the
borrowings on an effective interest basis.
Trade payables are obligations to pay for goods or
services that have been acquired in the ordinary course
of business from suppliers and are initially recorded at
fair value and thereafter at amortised cost using the
effective interest rate method.
Financial derivatives
The Group uses derivative financial instruments to
hedge its exposure to risks arising from operational
activities, principally foreign exchange risk. In
accordance with treasury policy, the Group does not
hold or issue derivative financial instruments for trading
purposes. The Group does not hedge account for these
items. Any gain or loss arising from derivative financial
instruments is based on changes in fair value, which
is determined by direct reference to active market
transactions or using a valuation technique where no
active market exists. At certain times the Group has
foreign currency forward contracts that fall into this
category. Movement in fair value is recognised in profit
and loss.
Notes to the Group financial statements continued
(u) Contract assets
Contract assets represent the gross unbilled amount
for contract work performed to date, calculated by way
of units assembled using either the input or output
method – refer policy (e). They are presented as part
of “trade and other receivables” in the balance sheet.
If payments received from customers exceed the
income recognised, then the difference is presented
as “accruals and contract liabilities” in the balance
sheet.
(v) Segmental reporting
The Group reports its business activities across
Offshore Energy and Marine Civils and this is reported
in a manner consistent with the internal reporting to
the Board of Directors, which has been identified as
the chief operating decision maker. The Board of
Directors consists of the Executive Directors and the
Non-Executive Directors. Project performance is also
monitored by both business entities and by Offshore
Wind and Subsea markets to provide differing
perspectives.
(w) Share capital
Share capital represents the nominal value of shares
that have been issued.
(x) Share premium
Share premium includes any premiums received
on issue of share capital. Any transaction costs
associated with the issuing of shares are deducted
from share premium, net of any related income tax
benefits.
(y) Merger reserve and Merger relief reserve
The merger reserve and the merger relief reserve
were created as a result of the share for share
exchange under which Tekmar Group plc became
the parent undertaking prior to the IPO. Under merger
accounting principles, the assets and liabilities of
the subsidiaries were consolidated at book value in
the Group financial statements and the consolidated
reserves of the Group were adjusted to reflect the
statutory share capital, share premium and other
reserves of the Company as if it had always existed,
with the difference presented as the merger reserve.
The Merger relief reserve was created on acquisition
of Pipeshield International Limited and Subsea
Innovation Limited as a result of part of the
consideration being settle in equity of the plc.
(z) Translation reserve
For the purpose of presenting consolidated financial
statements, the assets and liabilities of the Group’s
foreign operations are translated at exchange rates
prevailing on the statement of financial position
date. Income and expense items are translated at
the average exchange rates for the period, unless
exchange rates fluctuate significantly during that
period, in which case the exchange rates at the date
of transactions are used. Exchange differences
arising, if any, are recognised in other comprehensive
income and accumulated in equity. On consolidation,
the results of overseas operations are translated
into pounds sterling at rates approximating to those
ruling when the transactions took place. All assets
and liabilities of overseas operations are translated
at the rate ruling at the statement of financial position
date. Exchange differences arising on translating the
opening net assets at opening rate and the results
of overseas operations at actual rate are recognised
directly in other comprehensive income and are
credited/(debited) to the translation reserve.
(aa) Own shares held by ESOP trust
Transactions of the Group-sponsored ESOP trust are
treated as being those of the Group and are therefore
reflected in the financial statements. In particular, the
trust’s purchases and sales of shares in the Group are
debited and credited to equity.
(ab) Retained losses
Retained earnings includes all current and prior year
retained profits and losses.
(a) Share based payments
The Group operates equity-settled share-based
remuneration plans for certain employees. None of
the Group’s plans are cash-settled. All goods and
services received in exchange for the grant of any
share-based payment are measured at their fair
values.
www.tekmargroup.com
134
www.tekmargroup.com
135
www.tekmargroup.com
Where employees are rewarded using share-based
payments, the fair value of employees’ services is
determined indirectly by reference to the fair value
of the equity instruments granted. This fair value is
appraised at the grant date and excludes the impact of
non-market vesting conditions.
All share-based remuneration is ultimately recognised
as an expense in profit or loss with a corresponding
credit to retained earnings. If vesting years or other
vesting conditions apply, the expense is allocated over
the vesting year, based on the best available estimate
of the number of share options expected to vest.
3. CRITICAL ACCOUNTING JUDGEMENTS AND
ESTIMATES
The preparation of the Group financial statements
under IFRS requires the Directors to make estimates
and assumptions that affect the reported amounts
of assets and liabilities. Estimates and judgements
are continually evaluated and are based on historical
experience and other factors including expectations
of future events that are believed to be reasonable
under the circumstances. Actual results may differ
from these estimates.
The Directors consider that the following estimates
and judgements are likely to have the most significant
effect on the amounts recognised in the Group
financial statements.
(a) Critical judgements in applying the entity’s
accounting policies
Revenue recognition
Judgement is applied in determining the most
appropriate method to apply in respect of recognising
revenue over-time as the service is performed using
either the input or output method. Further details on
how the policy is applied can be found in note 2(e).
(b) Critical accounting estimates
Revenue recognition – stage of completion when
recognising revenue overtime
Revenue on contracts is recognised based on the
stage of completion of a project, which, when using
the input method, is measured as a proportion of costs
incurred out of total forecast costs. Forecast costs to
complete each project are therefore a key estimate
in the financial statements and can be inherently
uncertain due to changes in market conditions. For the
partially complete projects in Tekmar Energy at year
end if the percentage completion was 1% different to
management’s estimate the revenue impact would be
£116,830. Within Pipeshield International there were
a number of projects in progress over the year end
and a 1% movement in the estimate of completion
would impact revenue by £36,940 . However, the
likelihood of errors in estimation is small, as the
businesses have a history of reliable estimation of
costs to complete and given the nature of production,
costs to complete estimate are relatively simple.
Recoverability of contract assets and receivables
Management judges the recoverability at the balance
sheet date and makes a provision for impairment
where appropriate. The resultant provision for
impairment represents management’s best estimate
of losses incurred in the portfolio at the balance
sheet date, assessed on the customer risk scoring
and commercial discussions. Further, management
estimate the recoverability of any accrued income
balances relating to customer contracts. This
estimate includes an assessment of the probability of
receipt, exposure to credit loss and the value of any
potential recovery. Management base this estimate
using the most recent and reliable information that
can be reasonably obtained at any point of review.
The Group have recognised a credit loss provision in
relation to a specific historic aged trade receivable
(See note 16)
Notes to the Group financial statements continued
Impairment of non-current assets
Management conducts annual impairment reviews of
the Group’s non-current assets on the consolidated
statement of financial position. This includes goodwill
annually, development costs where IAS 36 requires
it, and other assets as the appropriate standards
prescribe. Any impairment review is conducted
using the Group’s future growth targets regarding
its key markets of offshore energy and marine civils.
Sensitivities are applied to the growth assumptions
to consider any potential long-term impact of current
economic conditions. Provision is made where the
recoverable amount is less than the current carrying
value of the asset. Further details as to the estimation
uncertainty and the key assumptions are set out in
note 11.
Provision for warranty costs and recognition of
related insurance income
In accordance with IAS 37, the company recognises
a provision when it has a present obligation as a
result of past events, it is probable that an outflow
of resources will be required to settle the obligation,
and a reliable estimate can be made of the amount of
the obligation. The estimation and calculation of the
value of provisions involves significant judgement,
particularly in determining the likelihood, cost and
timing of warranty related issues .
Additionally, the company may receive insurance
receipts to cover certain warranty claims. These
receipts are recognised as an asset only when it is
virtually certain that reimbursement will be received
if the company settles the obligation. The timing and
amount of such receipts can be uncertain, requiring
careful assessment and judgement to ensure
accurate financial reporting. Post year end, the Group
had £5.2m of cash receipts from insurance in relation
to warranty related matters. The Group recognised
this balance within other receivables on the balance
sheet at the financial year end.
4. REVENUE AND SEGMENTAL REPORTING
Management has determined the operating segments
based upon the information provided to the Board
of Directors which is considered the chief operation
decision maker. The Group is managed and reports
internally by business division and market for the year
ended 30 September 2024.
Major customers
In the year ended 30 September 2024 there were two
major customers within the Group that individually
accounted for at least 10% of total revenues (2023:
three customers). The revenues relating to these in
the year to 30 September 2024 were £11,085,000
(2023: £13,913,000). Included within this is revenue
from multiple projects with different entities within
the Group.
www.tekmargroup.com
136
www.tekmargroup.com
137
www.tekmargroup.com
Notes to the Group financial statements continued
Analysis of revenue by region
12M ending
30 Sep 2024
12M ending
30 Sep 2023
Restated
£000
£000
UK & Ireland
5,836
7,683
Germany
439
1,133
Turkey
-
983
Italy
101
-
Other Europe
413
1,152
USA & Canada
555
3,006
China
665
1,676
Japan
102
1,083
Philippines
-
1,157
Taiwan
7,696
-
South Korea
828
-
Qatar
5,222
8,036
KSA
4,674
6,888
UAE
2,695
-
Abu Dhabi
225
-
Africa
2,129
-
India
543
-
Other Middle East
40
904
Rest of the World
645
1,932
32,808
35,633
Analysis of revenue by market
12M ending
30 Sep 2024
12M ending
30 Sep 2023
Restated
£000
£000
Offshore Wind
17,100
17,658
Other offshore
15,708
17,975
32,808
35,633
Analysis of revenue by product category
12M ending
30 Sep 2024
12M ending
30 Sep 2023
Restated
£000
£000
Offshore Energy protection systems & equipment
17,916
15,844
Marine Civils
13,688
18,320
Engineering consultancy services
1,204
1,469
32,808
35,633
Note – Engineering consultancy services forms part of the offshore energy segment.
Analysis of revenue by recognition point
12M ending
30 Sep 2024
12M ending
30 Sep 2023
Restated
£000
£000
Point in Time
1,889
3,252
Over Time
30,919
32,381
32,808
35,633
At 30 September 2024, the Group had a total transaction price £15,471k ( 2023: £19,462k) allocated to
performance obligations on contracts which were unsatisfied or partially unsatisfied at the end of the
reporting period. The amount of revenue recognised in the reporting year to 30 September 24 which was
previously recorded in contract liabilities was £2,790k (2023: £3,188k).
Adjusted EBITDA is measured by division and the Board reviews this on the following basis.
www.tekmargroup.com
138
www.tekmargroup.com
139
www.tekmargroup.com
Notes to the Group financial statements continued
Offshore
Energy
2024
Marine
Civils
2024
Group/
Eliminations
Total
2024
£000
£000
£000
£000
Revenue
19,465
13,343
-
32,808
Inventory recognised as an expense
(9,842)
(7,059)
-
(16,901)
Other cost of sales
(3,900)
(1,490)
-
(5,390)
Gross profit
5,724
4,793
-
10,517
% Gross profit
29%
36%
-
32%
Administrative expenses
(6,962)
(3,078)
(3,155)
(13,195)
Warranty provision
(656)
-
-
(656)
Expected credit loss
(520)
-
-
(520)
Other operating income
1
9
12
22
Operating profit / (loss) from continuing
operations
(2,413)
1,724
(3,143)
(3,832)
Analysed as:
Adjusted EBITDA
1,702
2,582
(2,569)
1,715
Depreciation
(811)
(454)
(12)
(1,277)
Amortisation
(268)
-
(98)
(366)
Exceptional share based payment charges
(46)
(6)
(108)
(160)
Impairment of goodwill
(1,546)
-
-
(1,546)
Exceptional IT costs
(46)
-
(123)
(169)
Foreign exchange losses
(222)
(398)
(3)
(623)
Warranty provision
(656)
-
-
(656)
Expected credit loss
(520)
-
-
(520)
Restructuring costs
-
-
(230 )
(230)
Operating profit / (loss) from continuing
operations
(2,413)
1,724
(3,143)
(3,832)
Finance income
18
1
-
19
Finance costs
(74)
(6)
(647)
(727)
Tax
(496)
(334)
273
(557)
(Loss) / profit after tax from continuing
operations
(2,965)
1,385
(3,517)
(5,097)
Offshore
Energy
2024
Marine
Civils
2024
Group/
Eliminations
Total
2024
£000
£000
£000
£000
Other information
Reportable segment assets
17,119
11,405
22,384
50,908
Reportable segment liabilities
(12,022)
(3,673)
(7,249)
(22,944)
The goodwill and other intangible assets allocated to Group for the purposes of internal reporting are
£13,903k for Offshore Energy and £2,805k for Marine Civils.
www.tekmargroup.com
140
www.tekmargroup.com
141
www.tekmargroup.com
Notes to the Group financial statements continued
Offshore
Energy
2023
Restated
Marine
Civils
2023
Restated
Group/
Elimination s
Total
2023
Restated
£000
£000
£000
£000
Revenue
17,313
18,320
-
35,633
Inventory recognised as an expense
(12,272)
(12,166)
-
(24,438)
Other cost of sales
(2,053)
(828)
-
(2,881)
Gross profit
2,988
5,326
-
8,314
% Gross profit
17%
29%
-
23%
Administrative expenses
(11,185)
(2,528)
(2,545)
(16,258)
Other operating income
6
-
12
18
Operating (loss)/ profit from continuing
operations
(8,191)
2,798
(2,533)
(7,926)
Analysed as:
Adjusted EBITDA
(1,195)
3,544
(1,780)
569
Depreciation
(862)
(298)
(12)
(1,172)
Amortisation
(418)
-
(168)
(586)
Exceptional share based payment charges
(55)
(82)
(363)
(500)
Impairment of goodwill
(4,745)
-
-
(4,745)
Exceptional bonus payments
(180)
(34)
(82)
(296)
Foreign exchange gains/(losses)
(675)
(255)
2
(928)
Restructuring costs
(61)
(77)
(130)
(268)
Operating (loss)/ profit
(8,191)
2,798
(2,533)
(7,926)
Finance income
3
1
-
4
Finance costs
(48)
(10)
(569)
(627)
Tax
521
(789)
67
(201)
(Loss) / profit from continuing operations
(7,715)
2,000
(3,035)
(8,750)
Offshore
Energy
2023
Restated
Marine
Civils
2023
Restated
Group/
Eliminations
Total 2023
Restated
£000
£000
£000
£000
Other information
Reportable segment assets
17,391
10,169
25,695
53,255
Reportable segment liabilities
(8,175)
(3,208)
(7,219)
(18,602)
Note - Comparative figures have been restated to remove Subsea Innovation Limited as reclassified as
discontinued operations.
5.EMPLOYEES AND DIRECTORS
(a) Staff numbers and costs
The average number of persons employed by the Group (including directors) during the period, analysed by
category, was as follows:
2024
2023
Restated
No
No
Directors
7
6
Sales
6
7
Administration
48
49
Technical
32
34
Direct labour
41
38
133
134
Staff costs for the Group during the period were:
12M ending 30
Sep 2024
12M ending
30 Sep 2023
Restated
£000
£000
Wages and salaries
6,654
6,983
Social security costs
760
698
Defined contribution pension cost
365
313
Share based payments (note 25)
191
658
7,970
8,652
(b)
Key management compensation
Key management of the Group is considered to be the Board of Directors. Remuneration paid to the
Directors is as follows:
12M ending
30 Sep 2024
12M ending
30 Sep 2023
Restated
£000
£000
Short term benefits:
Salaries including bonuses
839
891
Social security costs
102
110
Total short-term benefits
941
1,001
Post-employment benefits:
Defined contribution pension plan
42
30
Total remuneration
983
1,031
Share options were awarded in the year, see note 26 for details of share option plans.
www.tekmargroup.com
142
www.tekmargroup.com
143
www.tekmargroup.com
Notes to the Group financial statements continued
Director
remuneration
Basic
salary /
fees
Share
awards
Social
security
Bonus
Company
Pension
contributions
FY24
Total
FY23
Total
Name of Director
£000
£000
£000
£000
£000
£000
£000
A MacDonald
241
67
41
-
-
349
486
J Brown
83
-
13
-
13
94
69
D Bulmer
-
-
-
-
-
-
122
I Ritchey
69
-
7
-
7
83
38
D Wilkinson
46
-
11
40
-
97
41
L Wilkinson
168
10
22
-
19
219
234
C Welsh
40
-
4
-
-
44
20
S Lockard
53
-
-
-
-
53
21
DM Kemp
6
-
1
-
-
7
-
LB Krogsgaard
6
-
-
-
-
6
-
R Turner
25
-
3
-
3
31
-
Highest paid director
The aggregate remuneration of the highest paid Director was £349,000 (2023: £486,000), which includes
pension contributions of £nil (2023: £nil), and accrued bonus costs of £nil (2023: £nil). The number of
Directors accruing pension benefits under a defined contribution plan was four (2023: four).
Note - Comparative figures have been restated to remove Subsea Innovation Limited as reclassified as
discontinued operations.
6. EXPENSES BY NATURE
12M ending
30 Sep 2024
12M ending
30 Sep 2023
Restated
£000
£000
Employee benefit expense
7,970
8,652
Amortisation
366
586
Depreciation – leased
494
437
Depreciation – owned
783
735
Inventory recognised as an expense
16,901
24,438
Foreign exchange losses
623
924
Other expenses
6,803
3,060
Warranty provision
656
-
Expected credit loss
520
-
Impairment of Goodwill
1,546
4,745
Total cost of sales and administrative expenses
36,662
43,577
Note - Comparative figures have been restated to remove Subsea Innovation Limited as reclassified as
discontinued operations.
7.
NET FINANCE COSTS
12M ending
30 Sep 2024
12M ending
30 Sep 2023
Restated
£000
£000
Interest payable and similar charges
On other loans
727
627
Total interest payable and similar charges
727
627
Interest receivable and similar income
Interest receivable
19
4
Total interest receivable and similar income
19
4
Net finance costs
708
623
Interest expense on lease liabilities was £78,000 (2023: £49,000).
Note - Comparative figures have been restated to remove Subsea Innovation Limited as reclassified as
discontinued operations.
www.tekmargroup.com
144
www.tekmargroup.com
145
www.tekmargroup.com
Notes to the Group financial statements continued
8. AUDITORS’ REMUNERATION
During the year the Group obtained the following services from the Company’s auditors at costs as detailed
below:
12M ending
30 Sep 2024
12M ending
30 Sep 2023
£000
£000
Fees payable to Company’s auditor for the audit of the parent
company financial statements
159
145
Fees payable to Company’s auditor for other services:
– The audit of Company’s subsidiaries
100
100
– Other non-audit services
8
8
267
253
9. TAXATION
Analysis of credit in year
12M ending
30 Sep 2024
12M ending
30 Sep 2023
£’000
£’000
Current tax
Current taxation charge for the year
305
-
Adjustments in respect of prior periods
313
-
Total current tax
618
-
Deferred tax
Origination and reversal of timing differences
(61)
201
Adjustments in respect of prior periods
-
-
Total deferred tax
(61)
201
Tax on (loss) on ordinary activities
557
201
Reconciliation of total tax charge:
(Loss) on ordinary activities before tax
(4,540)
(9,923)
(Loss) on ordinary activities multiplied by the rate of
corporation tax in the UK of 25% (2023: 22%)
(1,217)
(2,183)
Effects of:
Fixed asset timing differences
(59)
-
Non-deductible expenses
473
1,637
Non-taxable income
(3)
-
Enhanced R&D tax relief
-
(290)
Adjustments in relation to prior periods
313
-
Impact of unrecognised deferred tax assets
1,050
1,037
Total taxation charge
557
201
Factors that may affect future tax charges
Following the Governments announcement in October 2022 to increase the corporation tax rate to 25% from
19% with effect from April 2023, deferred tax has been calculated at a rate of 25%. Our expectation is that
the Group will utilise its losses in future accounting periods at the higher rate. See note 20 Deferred Tax.
10. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the earnings attributable to equity shareholders by the weighted average
number of ordinary shares in issue. Diluted earnings per share are calculated by including the impact of all conditional share
awards.
The calculation of basic and diluted profit per share is based on the following data:
30 Sep 2024
30 Sep 2023
Continuing
operations
Discontinued
operations
Continuing
operations
Discontinued
operations
Earnings (£000)
Earnings for the purposes of basic and diluted
earnings per share being profit/(loss) for the year
attributable to equity shareholders
(5,097)
(1,316)
(8,750)
(1,374)
Number of shares
Weighted average number of shares for the
purposes of basic earnings per share
136,305,536
136,305,536
94,694,962
94,694,962
Weighted average dilutive effect of conditional
share awards
8,281,261
8,281,261
4,346,203
4,346,203
Weighted average number of shares for the
purposes of diluted earnings per share
144,586,797
144,586,797
99,041,165
99,041,165
Profit per ordinary share (pence)
Basic profit per ordinary share
(3.74)
(0.97)
(9.24)
(1.45)
Diluted profit per ordinary share
(3.74)
(0.97)
(9.24)
(1.45)
Adjusted loss per ordinary share (pence)*
(1.00)
(0.97)
(3.19)
(1.30)
The calculation of adjusted earnings per share is based on the following data:
30 Sep 2024
30 Sep 2023
Continuing
operations
Discontinued
operations
Continuing
operations
Discontinued
operations
£000
£000
£000
£000
(Loss) for the period attributable to equity
shareholders
(5,097)
(1,316)
(8,750)
(1,374)
Add back:
Impairment of goodwill
1,546
-
4,745
-
Amortisation on acquired intangible assets
98
-
168
-
Exceptional share based payment
160
-
508
-
Exceptional staff costs (restructuring/bonus)
230
-
296
134
Exceptional IT costs
169
-
-
-
Warranty provision
656
-
-
-
Expected credit loss
520
-
-
-
Tax effect on above
351
-
22
-
Adjusted earnings
(1,367)
(1,316)
(3,011)
(1,240)
*Adjusted earnings per share is calculated as profit for the period adjusted for amortisation as a result of business combinations, one off items, share based
payments and the tax effect of these at the effective rate of corporation tax, divided by the closing number of shares in issue at the Balance Sheet date. This is
the measure most commonly used by analysts in evaluating the business’ performance and therefore the Directors have concluded this is a meaningful adjusted
EPS measure to present.
www.tekmargroup.com
146
www.tekmargroup.com
147
www.tekmargroup.com
Goodwill has been tested for impairment. The method, key assumptions and results of the impairment
review are detailed below:
Goodwill is attributed to the CGU being the division in which the goodwill has arisen. The Group has 2 CGUs
and the goodwill related to each CGU as disclosed below.
Goodwill
2024
£000
2023
£000
Offshore Energy Division
13,218
14,848
Marine Civils Division
2,590
2,590
Goodwill is allocated to two CGUs being Offshore Energy and Marine Civils. Goodwill has been tested for
impairment by assessing the value in use of the cash generating unit. The value in use has been calculated
using budgeted cash flow projections for the next 5 years. The forecasts have been compiled at individual
CGU level with the first year modelled around the known contracts which the entities have already secured
or are in an advanced stage of securing. A targeted revenue stream based on historic revenue run rates
has then been incorporated into the cashflows to model contracts that are as yet unidentified that are
likely be won and completed in the year. The forecasts for years 2 to 5 are based on assumed compound
annual growth rates (CAGR). The CAGR applied across the 5-year period were 15.1% for the Offshore Energy
CGU and 10% for the Marine Civils CGU. Gross margin assumptions applied range from the overall group
margin for FY24 to a level in line with the margin reported for the Marine Civils segment. The value in use
calculation models an increase in revenue for both CGU’s of 2% into perpetuity after year 5.
The cashflow forecasts assume growth in revenue and a corresponding increase in gross margin levels
across the Group to bring the overall group margin broadly in line with the margin reported for the Marine
Civils segment. These growth rates are based on past experience and market conditions and discount rates
are consistent with external information. The growth rates shown are the average applied to the cash flows
of the individual cash generating units and do not form a basis for estimating the consolidated profits of the
Group in the future.
In addition to growth in revenue and profitability, the key assumptions used in the impairment testing were as
follows:
A post tax discount rate of 14.3 % WACC (FY23 15.5%) estimated using a weighted average cost of capital
adjusted to reflect current market assessment of the time value of money and the risks specific to the Group
Terminal growth rate percentage of 2% (FY23: 2%)
The discount rate used to test the cash generating units was the Group’s post-tax WACC of 14.3%. The
goodwill impairment review has been tested against a reduction in free cashflows. The Group considers free
cashflows to be EBITDA less any required capital expenditure and tax.
Marine Civils
The value in use calculations performed for the impairment review, together with sensitivity analysis using
reasonable assumptions, indicate sufficient headroom for the goodwill carrying value in the Marine Civils
CGU.
Notes to the Group financial statements continued
11. GOODWILL AND OTHER INTANGIBLES
Goodwill
Software
Product
development
Trade
name
Customer
relationships
Total
£000
£000
£000
£000
£000
£000
COST
As at 1 October 2022
26,292
294
3,503
1,289
1,870
33,248
Additions
-
-
311
-
-
311
As at 30 September 2023
26,292
294
3,814
1,289
1,870
33,559
Additions
150
-
85
-
-
235
Disposals
-
(272)
(845)
-
-
(1,117)
Discontinued operations
(234)
-
(880)
(738)
(445)
(2,297)
As at 30 September 2024
26,208
22
2,174
551
1,425
30,380
AMORTISATION AND IMPAIRMENT
As at 1 October 2022
4,109
155
2,134
455
1,831
8,684
Amortisation charge for the
year
-
139
456
129
39
763
Impairment charge
4,745
-
-
-
-
4,745
As at 30 September 2023
8,854
294
2,590
584
1,870
14,192
Amortisation charge for the
year
-
-
385
98
-
483
Eliminated on disposal
-
(272)
(844)
-
-
(1,116)
Impairment charge
1,546
-
-
-
-
1,546
Discontinued operations
-
-
(576)
(412)
(445)
(1,433)
As at 30 September 2024
10,400
22
1,555
270
1,425
13,672
NET BOOK VALUE
As at 30 September 2022
22,183
139
1,369
834
39
24,564
As at 30 September 2023
17,438
-
1,224
705
-
19,367
As at 30 September 2024
15,808
-
619
281
-
16,708
The remaining amortisation periods for software and product development are 6 months to 48 months
(2023: 6 months to 48 months).
Depreciation charges
are allocated to
administrative
expenses in the
income statement.
The carrying value of
the right of use asset
relates to property
leases (£1,127k), plant
and equipment assets
(£108k) and employee
electric car scheme
(£23k).
148
www.tekmargroup.com
149
www.tekmargroup.com
Offshore Energy
The value in use calculations performed for the impairment review were £1,546k lower than the carrying
value of the Offshore Energy CGU. As a result, an impairment charge of £1,546k has been recognised in the
P&L for the year ended 30 September 2024 against the goodwill apportioned to the Offshore Energy CGU.
The value in use calculations have a range of assumptions, which if changed would lead to a change in the
impairment charge recognised. To assess these changes management have run a model which sensitises
the assumption on EBITDA generated in the offshore wind division.
In the base case model, management have assumed varying growth rates across the 5 year period, with an
average CAGR across the period of 15.1%. If the CGU fell short of the revenue growth by 1% in each year and
gross margin fell by 1% in each period of the model a further impairment of £4,707k would be recognised. If
revenue is stable but gross margin fell by 1% in each period of the model a further impairment of £X2,042k
would be recognised.
The base case model assumes a post-tax discount rate of 14.3%. If the discount rate used were to increase
by 1%, a further impairment of £1,923k would be recognised.
All amortisation charges have been treated as an expense and charged to cost of sales and operating costs
in the income statement.
12. PROPERTY, PLANT AND EQUIPMENT
Freehold
property
Leasehold
improvements
Plant and
equipment
Fixtures and
Fittings
Motor
vehicles
Computer
equipment
Right of
use asset
Total
£000
£000
£000
£000
£000
£000
£000
£000
COST
As at 1 October 2022
2,988
922
7,088
1,231
11
490
3,409
16,139
Additions
70
23
876
2
22
30
1,262
2,285
Disposals
-
-
(133)
(923)
-
(26)
(1,549)
(2,631)
Forex on consolidation
-
-
(3)
-
-
-
-
(3)
As at 30 September 2023
3,058
945
7,828
310
33
494
3,122
15,790
Additions
-
225
1,294
133
-
46
274
1,972
Disposals
-
(18)
(1,121)
(6)
(12)
(348)
(1,541)
(3,046)
Forex on consolidation
-
-
(12)
-
-
-
-
(12)
Lease modification
-
-
-
-
-
-
201
201
Discontinued operations
-
-
(9043)
-
(21)
-
(138)
(1,063)
Reclassify to Investment
Property
(2,842)
-
-
-
-
-
-
(2,842)
As at 30 September 2024
216
1,152
7,085
437
-
192
1,918
11,000
DEPRECIATION
As at 1 October 2022
22
922
4,781
1,164
11
436
2,920
10,256
Charge for the year
54
1
715
41
-
32
484
1,327
Eliminated on disposal
-
-
(130)
(904)
-
(26)
(1,539)
(2,599)
Forex on consolidation
-
-
(2)
-
-
-
-
(2)
As at 30 September 2023
76
923
5,364
301
11
442
1,865
8,982
Charge for the year
27
2
8710
20
3
27
415
1,365
Eliminated on disposal
-
(18)
(1,031)
(6)
(12)
(344)
(1,542)
(2,95
2)
Revaluations
(71)
-
-
-
-
-
-
(71)
Forex on consolidation
-
-
(7)
-
-
-
-
(7)
Discontinued operations
(9)
-
(740)
-
(312)
-
(75)
(827)
As at 30 September 2024
23
907
4,456
315
-
125
660
6,4856
NET BOOK VALUE
As at 30 September 2022
2,966
-
2,307
67
-
54
489
5,883
As at 30 September 2023
2,982
22
2,464
9
22
52
1,257
6,808
As at 30 September 2024
193
245
2,629
122
-
67
1,258
4,514
Notes to the Group financial statements continued
www.tekmargroup.com
150
www.tekmargroup.com
151
www.tekmargroup.com
As at 30 September 2024, freehold property with a carrying value of £nil were subject to a fixed and floating
charge that forms security for the bank borrowings disclosed in note 19 .
The following information relates to tangible fixed assets carried on the basis of revaluations in accordance
with IAS 16 Property, plant and equipment.
Freehold Property
30 Sep
2024
30 Sep
2023
£000
£000
At fair value
30 September 2022
2,988
2,988
Aggregate depreciation thereon
(137)
(54)
Transfer to investment property
(2,851)
-
Net book value
-
2,934
Historical cost of revalued assets
2,656
2,656
Aggregate depreciation thereon
(530)
(499)
Discontinued operations
(2,126)
Historical cost net book value
-
2,157
13. INVESTMENT PROPERTY
Investment property includes commercial properties in England which are owned to earn rentals and for
capital appreciation.
Changes to carrying amounts are as follows:
30 Sep
2024
30 Sep
2023
£’000
£’000
Fair value 1 October
-
-
Transferred from freehold property
2,842
-
Change in fair value – revaluation
-
-
Fair value 30 September
2,842
-
The investment property is either leased to third parties on operating leases or are vacant. Rental income of
£nil (2023: £nil) is shown within other operating income . There are no expenses in relation to the investment
property.
Although the risks associated with rights the Group retained underlying assets are not considered to be
significant, the Group employs strategies to further minimise these risks. The under guaranteed residual
values do not represent significant risk for the Group, as they relate to property which is located in a location
where market value, year on year, has always remained stable with trivial fluctuations. For example, ensuring
the contract includes clauses requiring the lessee to compensate the Group when a property has been
subjected to excess wear-and-tear during the lease term. The lessee does not have an option to purchase the
property at the end of the lease expiry period.
The lease contract was initially signed for one year at zero rentals, with the option to extend at the end of the
period in May 2025 at which time annual lease charges will be agreed.
The property was valued using by an independent valuer (G F White LLP) on 3rd January 2025 . The
revaluation of investment property in the year resulted in no change in valuation during the period.
Notes to the Group financial statements continued
www.tekmargroup.com
152
www.tekmargroup.com
153
www.tekmargroup.com
14. INVESTMENTS
Subsidiary undertakings of the Group
Details of the investments in which the Group holds 20 per cent or more of the nominal value of any class of
share capital are as follows:
Proportion held
Class of
share capital
held
By Parent
Company
By the
Group
Tekmar Limited
Ordinary
100%
100%
Tekmar Holdings Limited
Ordinary
-
100%
Tekmar EBT Limited
Ordinary
-
100%
Tekmar Energy Limited
Ordinary
-
100%
Pipeshield International Limited
Ordinary
100%
100%
Pipeshield Company Limited
Ordinary
-
100%
Pipeshield International Trading LLC
Ordinary
-
100%
Tekmar Polyurethanes Limited
Ordinary
-
100%
Tekmar GmbH
Ordinary
-
100%
AgileTek Engineering Limited
Ordinary
-
100%
Ryder Geotechnical Limited
Ordinary
-
100%
Tekmar Marine Technology Company Limited
Ordinary
-
100%
On 13th November 2023, the Group purchased a further 200 shares in Ryder Geotechnical limited
representing the remaining 20 per cent of share capital for £200,000. The Group now owns 100 per cent of
the share capital of Ryder Geotechnical limited. There are no non-controlling interests.
All the companies listed above are incorporated in England and Wales, and have a registered address of
Grindon Way, Aycliffe Business Park, Newton Aycliffe, DL5 6SH with the following exceptions:
Company
Country of
Incorporation
Address
Pipeshield International Trading LLC
UAE
C2 Al Buttien Building, Office 642
Pipeshield Company Limited
Saudi Arabia
Dammam, KSA, Po Box 130 31952
Tekmar GmbH
Germany
Möllneyer Ufer 17, 45257 Essen, Germany
Tekmar Marine Technology
Company Limited
China
Room 301,3F,No.1271 West Beijing Road,
Jingan District, Shanghai, China
There are no restrictions on the Group’s ability to access or use the assets and settle the liabilities of the
Group’s subsidiaries. The principal activities of these undertakings for the last relevant financial period were
as follows:
Company
Principal activity
Tekmar Limited
Holding of shares in subsidiary companies and the
management thereof
Tekmar Holdings Limited
Holding of shares in subsidiary companies and the
management thereof
Tekmar EBT Limited
Corporate trustee for an employee benefit trust established
to facilitate employee share ownership
Tekmar Energy Limited
Design and manufacture of subsea protection solutions for
use in offshore subsea industry
Pipeshield International Limited
Design and manufacture of subsea asset protection
Pipeshield International Trading LLC
Design and manufacture of subsea asset protection
Pipeshield Company Limited
Design and manufacture of subsea asset protection
Tekmar Polyurethanes Limited
Dormant
Tekmar GmbH
Investment
AgileTek Engineering Limited
Engineering consulting for subsea environments
Ryder Geotechnical Limited
Geotechnical consulting for subsea environments
Tekmar Marine Technology Company
Limited
Sales and project management for Asia Pacific region
Notes to the Group financial statements continued
www.tekmargroup.com
154
www.tekmargroup.com
155
www.tekmargroup.com
On 2nd May 2024, the Group disposed of its 100% equity interest in its subsidiary, Subsea Innovation Limited.
The subsidiary was classified as held for sale in the March 2024 interim results.
The consideration was deferred but is expected to be fully received by May 2025 . £209k was received by 30
September 2024, with a further £1.2m being received post year end.
At the date of disposal, the carrying amount of Subsea Innovation’s net assets were as follows:
2 May 2024
£000
Non-current assets
Property, plant and equipment
235
Goodwill and other intangibles
863
1,098
Current assets
Inventory
168
Trade and other receivables
3,919
Cash and cash equivalents
59
4,146
Non-current liabilities
Other interest bearing loans and borrowings
(17)
Deferred tax liability
(62)
(79)
Current liabilities
Other interest bearing loans and borrowings
(44)
Trade and other payables
(2,041)
Provisions
(22)
(2,107)
Total net assets
3,058
Total consideration
1,688
(Loss) on disposal
(1,370)
The loss on disposal is included in the loss for the year from discontinued operations in the
consolidated statement of profit or loss. See note 28.
Consideration received:
£000
Cash received in the year
209
Deferred consideration
1,742
Less legal fees
(263)
Total consideration
1,688
15.
INVENTORIES
30 Sep
2024
30 Sep
2023
£000
£000
Raw materials
Work in Progress
1,027
83
1,489
28
Finished goods
769
610
1,879
2,127
All inventory items are carried at the lower of cost or net realisable value.
Notes to the Group financial statements continued
www.tekmargroup.com
156
www.tekmargroup.com
157
www.tekmargroup.com
16. TRADE AND OTHER RECEIVABLES
30 Sep
2024
30 Sep
2023
£000
£000
Amounts falling due within one year:
Trade receivables not past due
3,978
2,963
Trade receivables past due (1-30 days)
1,517
4,822
Trade receivables past due (over 30 days)
2,744
5,547
Trade receivables not yet due (retentions)
259
650
Expected credit loss
(520)
-
Trade receivables net
7,978
13,982
Contract assets
3,590
4,628
Other receivables
637
328
Warranty insurance debtor
5,165
-
Prepayments and accrued income
977
796
Deferred consideration on sale of subsidiary
1,742
-
Derivative asset
247
-
20,336
19,734
Trade and other receivables are all current and any
fair value difference is not material. Trade receivables
are assessed by management for credit risk and
are considered past due when a counterparty has
failed to make a payment when that payment was
contractually due. Management assesses trade
receivables that are past the contracted due date by
up to 30 days and by over 30 days.
The carrying amounts of the Group’s trade and other
receivables are all denominated in GBP, USD, EUR and
RMB.
The Group assesses on a forward-looking basis the
expected credit losses (ECL) associated with its
financial assets. The Group has the following types
of financial assets that are subject to the expected
credit loss model:
•
Trade receivables arising from sale of goods and
provision of consultancy services
•
Contract assets relating to the sale of goods and
provision of consultancy services
The Group recognizes a loss allowance for such
losses at each reporting date. The measurement of
ECL reflects:
1. An unbiased and probability-weighted amount
that is determined by evaluating a range of
possible outcomes.
2. The time value of money.
3. Reasonable and supportable information that
is available without undue cost or effort at
the reporting date about past events, current
conditions, and forecasts of future economic
conditions.
Methodology
The Group applies the simplified approach permitted
by IFRS 9, which requires expected lifetime losses
to be recognized from initial recognition of the
receivables. The Group uses a provision matrix to
calculate ECLs for trade receivables. The provision
rates are based on days past due for Groupings of
various customer segments that have similar loss
patterns by geographical region and product type.
The expected loss rates are based on the payment
profiles of sales over a period of 5 years before 30
September 2024.
To measure the expected credit losses, trade receivables and contract assets have been Grouped based
on shared credit risk characteristics and the days past due. The contract assets relate to unbilled work in
progress and have substantially the same risk characteristics as the trade receivables for the same types
of contract. The Group has therefore concluded that the expected loss rates for trade receivables are a
reasonable approximation of the loss rates for the contract assets.
Key Assumptions
The key assumptions used in estimating ECL are as follows:
- Historical credit loss experience.
- Adjustments for forward-looking information such as economic forecasts and industry trends.
- The impact of macroeconomic factors on the creditworthiness of customers.
On that basis, the loss allowance as at 30 September 2024 and 30 September 2023 was determined as
follows for both trade receivables and contract assets:
31 Sep 24 - £’000
Not yet
due
< 3 Months
past due
3m – 12m
past due
> 12m past
due
Expected loss rate
0%
0%
0%
23%
Carrying amount – Trade receivables
4,273
2,240
-
2,021
Carrying amount – Contract assets
3,590
-
-
-
Loss Allowance
Nil
Nil
Nil
520
Historically the Group has recovered 100% of receivable balances and no credit losses have previously been
accounted for. The Group continues to operate in global markets where payment practices surrounding large
contracts can be different to those within Europe. The flow of funds on large capital projects within China
tend to move only when the windfarm developer approves the completion of the project.
The Group has a number of trade receivable balances, within its subsidiary based in China, which have
been past due for more than 1 year. At 30th September 2024 the value of these overdue trade receivables
was £2.0m, of a total outstanding trade receivable balance for the entity of £2.2m, These amounts remain
outstanding at the approval of the financial statements. The Group made an expected credit loss provision
in relation to the outstanding balances due to its Subsidiary within China. The provision is calculated on the
weighted probabilities of the potential range of outcomes in relation to the outstanding balance.
All other receivables are considered to be 100% recoverable on the basis that previous trading history sets a
precedent that these balances will be received.
Trade receivables and contract assets are written off where there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a
customer to engage in a repayment discussion with the Group.
Impairment losses on trade receivables and contract assets are presented as net impairment losses within
operating profit. Subsequent recoveries of amounts previously written off are credited against the same line
item.
Notes to the Group financial statements continued
www.tekmargroup.com
158
www.tekmargroup.com
159
www.tekmargroup.com
Reconciliation of Loss Allowance
The movement in the allowance for credit losses during the year was as follows:
£’000
30 Sep
2024
30 Sep
2023
Opening balance
-
-
Increase in loss allowance
520
-
Closing Balance
520
-
17.
CASH AND CASH EQUIVALENTS
30 Sep
2024
30 Sep
2023
£000
£000
Cash and cash equivalents
Cash at bank and in hand
4,630
5,219
Cash and cash equivalents were held in the following currencies:
30 Sep
2024
30 Sep
2023
£000
£000
UK Pound
410
2,746
Euro
13
142
US Dollar
4,042
1,892
Other
165
439
4,630
5,219
18. TRADE AND OTHER PAYABLES
30 Sep
2024
30 Sep
2023
£000
£000
Current
Trade payables
5,858
4,396
Tax and social security
554
312
Accruals
1,358
3,010
Contract liabilities
670
1,651
Other creditors
63
-
Derivative financial liability
-
29
8,503
9,398
30 Sep
2024
30 Sep
2023
£000
£000
Non-current
Deferred government grants
-
327
-
327
Trade and other payables are all current and any fair value difference is not material. The derivative
financial liability relates to forward foreign currency contracts. Forward currency contracts are
revalued using the period end spot rate.
The deferred government grant related to the building of innovation in house. This building was
acquired by Tekmar Group Plc prior to the disposal of Subsea Innovation limited in May 2024. The
remaining deferred grant was released by Subsea innovation limited on the sale of the building.
Contract liabilities have reduced in the year mainly due to timing of ongoing projects, how far through
the work we are versus what cash was received in advance.
Notes to the Group financial statements continued
www.tekmargroup.com
160
www.tekmargroup.com
161
www.tekmargroup.com
19. BORROWINGS
30 Sep
2024
30 Sep
2023
£000
£000
Current
Trade Loan Facility
Lease liability
3,183
371
3,575
471
CBILS Bank Loan
3,000
3,000
6,554
7,046
Non-current
Lease liability
924
834
924
834
2024
2023
£000
£000
Amount repayable
Within one year
In more than one year but less than two years
6,554
344
7,049
327
In more than two years but less than three years
351
290
In more than three years but less than four years
175
214
In more than four years but less than five years
54
-
7,478
7,880
The above carrying values of the borrowings equate to the fair values.
2024
2023
%
%
Average interest rates at the balance sheet date
Lease liability
5.92
5.60
Trade Loan Facility
7.19
7.50
CBILS Bank Loan
7.50
7.50
The CBILS Bank Loan was renewed in July 2024 and is due for maturity on 31 October 2025. The trade
Loan Facility has been renewed in July 2024 and is due for Maturity on 31 July 2025, as described in
note 2b.
Lease liability
This represents the lease liability recognised under IFRS 16. The assets leased are shown as a right
of use asset within Tangible Fixed Assets (note 12) and relate to the buildings from which the Group
operates, along with leased items of equipment and computer software.
The asset and liability have been calculated using a discount rate between 3.25% and 7.25% based on
the inception date of the lease.
These leases are due to expire between October 2024 and June 2029.
Cash flows from financing activities
An analysis of cash flows from financing activities is provided as follows:
Lease
liabilities
£000
Loans &
Borrowings
£000
Total
£000
Balance at 1 October 2022
402
6,990
7,392
Changes from financing cash flows
Proceeds from loans & borrowings
-
11,526
11,526
Payment of loans & borrowings
(11,941)
(11,941)
Payment of lease liabilities
(414)
-
(414)
Total changes from financing cash flows
(414)
(415)
(829)
Other changes
New leases
1,270
-
1,270
Interest expense
Payment of interest
47
-
505
(505)
552
(505)
Total other changes
1,317
-
1,317
Balance at 30 September 2023
1,305
6,575
7,880
Balance at 1 October 2023
1,305
6,575
7,880
Changes from financing cash flows
Proceeds from loans & borrowings
-
11,413
11,413
Repayment of Loans & Borrowings
-
(11,805)
(11,805)
Payment of lease liabilities
(514)
-
(514)
Total changes from financing cash flows
(514)
(392)
(906)
Other changes
New leases
494
-
494
Interest expense
78
569
647
Payment of interest
Adjustments to lease calculation
Disposal r.e. discontinued operations
-
(8)
(60)
(569)
-
-
(569)
(8)
(60 )
Total other changes
504
-
504
Balance at 30 September 2024
1,295
6,183
7,478
Notes to the Group financial statements continued
www.tekmargroup.com
162
www.tekmargroup.com
163
www.tekmargroup.com
20. PROVISIONS & CONTINGENT LIABILITIES
Provisions are split between current and non-current. The carrying amounts and the movements in the
provision account are as follows :
Onerous
contracts
£000
Warranty
provision
£000
Total
£000
Carrying amount at 1 October 2022
-
-
-
Additional provision
465
-
465
Amounts utilised
-
-
-
Reversals
-
-
Carrying amount at 30 September 2023
465
-
465
Carrying amount at 1 October 2023
465
-
465
Additional provision
-
5,821
5,821
Amounts utilised
(404)
-
(404)
Reversals
-
-
Carrying amount at 30 September 2024
61
5,821
5,882
£5.2m of the warranty provision has been included as current liability as outflow of economic resources is
expected within one year. The remaining provision (£0.7m) is expected to be paid in a period of greater than
one year and therefore is included in non-current liabilities.
Onerous Contracts
The provision unwound in the year ending 30 September 2024 is for onerous contracts. The Group has
assessed that the unavoidable costs of fulfilling the contract obligations exceed the economic benefits
expected to be received from the contract. The provision relates to one contract in the offshore energy
division (2023: two contracts) which are expected to be completed in the year ending September 2025.
Warranty Provisions
As noted by the Group in prior public announcements, there is a historic industry-wide issue regarding
abrasion of legacy cable protection systems installed at off-shore windfarms. The precise cause of the
issues in each instance is not always clear and could be as a result of a number of factors, such as the
decision by windfarm developers to exclude a second layer of rock to stabilise the cables.
Since the emergence of the issue, Tekmar has been committed to working with relevant installers and
operators, including directly with customers who have highlighted this issue, to investigate further the root
cause and assist with identifying potential remedial solutions. This has been undertaken without prejudice
and on the basis that Tekmar has consistently denied any responsibility for these issues. Given the extensive
uncertainties the, the RCA investigations have not concluded that the Tekmar products are defective.
Post the financial year end, the Group entered commercial settlement discussions with [2 customers] to
resolve disputes related to the legacy defect notifications on 9 projects with alleged CPS failures. The
aggregate of the expected outflows under the proposed settlement is £5.2m in full and final settlement of
the 9 claims. The provision has been estimated based on the proposed settlement value. In addition to
the above a further provision of £0.7m has been made in respect of 1 legacy project with one of the above
customers.
Working in collaboration with the relevant 2 customers, Tekmar have sought to explore insurance available
for such matters not withstanding Tekmar’s position regarding responsibility and liability. In this regard, the
Group have negotiated a commercial settlement with its EXPL insurance provider of £5.2m in relation to
the above claims. The insurance proceeds are available for use at the discretion of the Group in settlement
of the above claims, with any unused cash repayable to the insurer. The insurance receipt post year end is
evidence that the insurance amount was virtually certain at year end, as such the Group have recognised
the insurance income in the year ended 30 September 2024 with a corresponding insurance receivable
recognised in the statement of financial position at 30 September 2024.
Tekmar has received a further defect notification in relation to incorrect/out of specification coating
application on 1 historic project. The nature of this defect notification is entirely separate to the legacy
defect issues disclosed above. There are a number of units which have been installed in relation to the
this legacy project and discussions with the customer are ongoing in regards to the solution. Management
believe that the most likely solution would result in an outflow of economic benefits of c£0.2m to provide a
resolution to the issue.
The expected outflow of economic resources from the warranty matters has been recognised as an expense
on the face of the statement of profit and loss for the year ended 30 September 2024. This value is shown
net of the insurance receivable in accordance with IAS 37.
Tekmar Group plc has taken exemption under IAS37, Paragraph 92 to not disclose information on the
uncertainties in relation to timing and the assumptions used to calculate the provision as this could
prejudice seriously the position of the entity in a dispute with other parties on the subject matter as a result
of the early stage of settlement discussions.
CONTINGENT LIABILITIES
Contingent liabilities are disclosed in the financial statements when a possible obligation exists, the
existence will be confirmed by uncertain future events that are not wholly within the control of the entity.
Contingent liabilities also include obligations that are not recognised because their amount cannot be
measured reliably or because settlement is not probable.
As noted by the Group in prior public announcements, there is a historic industry-wide issue regarding
abrasion of legacy cable protection systems installed at off-shore windfarms. The precise cause of the
issues in each instance is not always clear and could be as a result of a number of factors, such as the
decision by windfarm developers to exclude a second layer of rock to stabilise the cables.
Tekmar is committed to working with relevant installers and operators, including directly with customers
who have highlighted this issue, to investigate further the root cause in each case and assist with identifying
potential remedial solutions. This is being done without prejudice and on the basis that Tekmar has
consistently denied any responsibility for these issues. However, given these extensive uncertainties and
level of variabilities at this early stage of investigations no conclusions can yet be made.
Tekmar have been presented with defect notifications for 2 legacy projects (in addition to those disclosed
as provisions) on which it has supplied cable protection systems (“CPS”). These defect notifications have
only been received on projects where there was an absence of the second layer of rock traditionally used to
stabilise the cables.
At this stage management do not consider that there is a present obligation arising under IAS37 as
insufficient evidence is available to identify the overall root cause of the damage to any of the CPS.
Independent technical experts have been engaged to determine the root cause of the damage to the CPS,
Tekmar have reviewed the assessments and concluded that a present obligation does not exists.
Management acknowledges that there are many complexities with regards to the alleged defects which
could lead to a range of possible outcomes. Given the range of possible outcomes, management considers
that a possible obligation exists which will only be confirmed by further technical investigation to identify the
root cause of alleged CPS failures. As such management has disclosed a contingent liability in the financial
statements.
Notes to the Group financial statements continued
www.tekmargroup.com
164
www.tekmargroup.com
165
www.tekmargroup.com
Tekmar Group plc has taken exemption under IAS37, Paragraph 92 to not disclose information on the range
of financial outcomes, uncertainties in relation to timing and any potential reimbursement as this could
prejudice seriously the position of the entity in a dispute with other parties on the subject matter as a result
of the early stage of discussions.
21. DEFERRED TAX
30 Sep
2024
30 Sep 2023
Asset
Liability
Net
Asset
Liability
Net
£000
£000
£000
£000
£000
£000
At start of year
411
(914)
(503)
267
(580)
(313)
(Charge) / Credit to income statement
(69)
130
61
135
(336)
(201)
Credit on other comprehensive
income
4
-
4
9
2
11
Discontinued operations
(14)
218
204
-
-
-
At end of year
332
(566)
(234)
411
(914)
(503)
The deferred tax liability relates to the
following:
30 Sep
2024
30 Sep 2023
Asset
Liability
Net
Asset
Liability
Net
Accelerated capital allowances on
property, plant & equipment
4
(548)
(544)
-
(603)
(603)
On share based payments
97
-
97
190
-
190
Other timing differences
231
(18)
213
221
(311)
(90)
332
(566)
(234)
411
(914)
(503)
Other timing difference relate to the deferred tax liability arising on the property revaluation.
In addition to the deferred tax liability above, the Group has additional unrecognised gross tax losses
of £22,747,000 (2023: £18,871,000), hence an unrecognised deferred tax asset of £5,686,827 (2023:
£4,717,750). These assets remain unrecognised as there is expected to be sufficient relief available in the
businesses that hold the losses to mean it is unlikely that the losses will be used over the medium term and
therefore the benefit derived from them is too uncertain to warrant recognition of an asset.
22. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
Financial risk management
The Group uses various financial instruments. These have historically included cash, forward foreign exchange
contracts, issued equity instruments and various items, such as trade receivables and trade payables that
arise directly from its operations. The main purpose of these financial instruments are to raise finance for the
Group's operations.
The existence of these financial instruments exposes the Group to a number of financial risks, which are
described in more detail below.
The main risks arising from the Group's financial instruments are market risk, cash flow interest rate risk, credit
risk and liquidity risk. The Directors review and agree policies for managing each of these risks and they are
summarised below.
Market risk
Market risk encompasses three types of risk, being currency risk, interest rate risk and price risk. In this
instance price risk has been ignored as it is not considered a material risk to the business. The Group's policies
for managing interest rate risk are set out in the subsection entitled "interest rate risk" below.
Currency risk
The Group contracts with certain customers in Euros, US dollars and Chinese Yuan. It manages this foreign
currency risk through creating natural hedges on contracts by offsetting outflows in particular currencies
against the inflow in that currency on particular contracts. Further to this, the Group uses forward foreign
exchange contracts and foreign currency options which match the expected receipt of foreign currency income
. At 30 September 2024 this covers the period up to March 2026 (As at 30 September 2023 the period to
October 2024).
The table below shows the impact in GBP to the profit & loss account and net assets of the Group (excluding
any changes in the fair value of derivatives) if there had been a 5% difference in the year end exchange rates:
At 30 September 2024
Eur
USD
QAR
AED
SAR
RMB
Total
£000
£000
£000
£000
£000
£000
£000
+5%
(95)
(302)
(2)
7
(36)
(115)
(542)
-5%
105
334
2
(8)
39
127
599
At 30 September 2023
Eur
USD
SAR
AED
SAR
RMB
Total
£000
£000
£000
£000
£000
£000
£000
+5%
(215)
(289)
21
5
1
(263)
(740)
-5%
163
319
(23)
(5)
291
(1)
744
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs
by closely managing the cash balance and by investing cash assets safely and profitably.
The Group policy throughout the period has been to ensure continuity of funding. Short-term flexibility is
achieved by bank loan facilities.
The table below analyses the Group’s non-derivative and derivative financial liabilities into relevant maturity
Groupings based on the remaining period at the balance sheet date to the contractual maturity date. Derivative
financial liabilities are included in the analysis if their contractual maturities are essential for an understanding
of the timing of cash flows. The amounts disclosed in the table are the contractual undiscounted cash flows.
Notes to the Group financial statements continued
www.tekmargroup.com
166
www.tekmargroup.com
167
www.tekmargroup.com
At 30 September 2024
Less than 1
year
£000
Between 1
and 2 years
£000
Between 2
and 5 years
£000
Over 5 years
£000
Borrowings
6,183
-
-
-
Lease Obligations
371
344
580
-
Trade and other payables
7,216
-
-
-
At 30 September 2023
Less than 1
year
£000
Between 1
and 2 years
£000
Between 2
and 5 years
£000
Over 5 years
£000
Borrowings
6,575
-
-
-
Lease Obligations
474
327
290
214
Trade and other payables
4,181
-
-
-
Interest rate risk
The Group finances its operations through a mixture of retained profits and bank borrowings. The Directors'
policy to manage interest rate fluctuations is to regularly review the costs of capital and the risks associated
with each class of capital, and to maintain an appropriate mix between fixed and floating rate borrowings.
Credit risk
The Group's principal financial assets are cash and trade receivables. The credit risk associated with cash is
limited, as the counterparties have high credit ratings assigned by international credit-rating agencies. The
principal credit risk arises therefore from the Group's trade receivables. The Group continuously monitors the
credit quality of customers based on a credit rating scorecard. Where available, external credit ratings and/or
reports on customers are obtained and used. The Group’s policy is to deal only with credit worthy counterparties.
The credit terms range between 30 and 90 days. The credit terms for customers as negotiated with customers
are subject to an internal approval process which considers the credit rating scorecard. The ongoing credit risk
is managed through regular review of ageing analysis, together with credit limits per customer.
Trade receivables consist of a large number of customers in various industries and geographical areas. The
Group does not hold any security on any trade receivables balance at each annual reporting date.
In addition, the Group does not hold any collateral relating to other financial assets (eg derivative assets, cash
and cash equivalents held with banks) at each annual reporting date.
The Group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade
receivables as these items do not have a significant financing component.
The Directors have assessed Group's trade receivables for the year ended 30 September 2024 and recorded an
expected credit loss provision of £0.5m . See note 3 for critical accounting estimates made regarding credit loss
provisions and note 16 for further information on financial assets that are past due.
Summary of financial assets and liabilities by category
The carrying amount of financial assets and liabilities recognised at the balance sheet date of the reporting
periods under review may also be categorised as follows:
2024
2023
£000
£000
Financial assets
Financial assets measured at amortised cost
Trade and other receivables
20,421
19,807
Cash and cash equivalents
4,630
5,219
Financial assets measured at FVTPL
Forward foreign exchange contracts
247
-
25,298
25,026
Financial liabilities
Financial liabilities measured at fair value through profit or loss
Forward foreign exchange contracts
-
(29)
Financial liabilities measured at amortised cost
Non-current:
Borrowings
(924)
(834)
Current:
Borrowings
(6,554)
(7,046)
Trade payables
(5,858)
(4,859)
(13,336)
(12,768)
Net financial assets and liabilities
11,962
12,258
Financial instruments carried at fair value include forward foreign exchange contracts which are valued using
Level 2 inputs in accordance with IFRS 13.
Capital risk management
The Group’s capital management objectives are:
•
To ensure the Group’s ability to continue as a going concern; and
•
To provide an adequate return to shareholders by pricing products and services commensurately with the
level of risk.
This is achieved through close management of working capital and regular reviews of pricing. Decisions
on whether to raise funding using debt or equity are made by the Board based on the requirements of the
business. Capital for the reporting period under review is shown as total equity in the table above.
Notes to the Group financial statements continued
www.tekmargroup.com
168
www.tekmargroup.com
169
www.tekmargroup.com
23. SHARE CAPITAL
Ordinary
shares
£0.01
Number
Ordinary
Share Total
£
At 30 September 2022
60,960,234
609,602
Issued during the period
75,112,392
751,124
At 30 September 2023
136,072,626
1,360,726
Issued during the period
1,197,353
11,974
At 30 September 2024
137,269,979
1,372,700
The new shares issued during the period arose from the exercise of share options (1,197,353 shares) (see
Note 26). The nominal value of these shares £1,337.40 were not fully paid at year end, all other shares issued
have been fully paid. These shares were issued for £0.01 per share.
4,111,548 shares were issued during 2023 relating to share-based payments (see Note 26 for details on the
Group’s share-based employee remuneration programmes). These shares were issued for £0.09 per share.
The Group issued 71,000,844 shares on 19 April 2023, corresponding to 52% of total shares issued. Each
share has the same right to receive dividends and the repayment of capital and represents one vote at
shareholders’ meetings of Tekmar Group plc. These shares were issued for £0.09 per share
Proceeds received in addition to the nominal value of the shares issued in FY23 have been included in share
premium, less registration and other regulatory fees and net of related tax benefits. The value of new shares
charged to equity amounted to £nil (2023: £ 5,300,000). The costs associated with the issue of new shares
amounted to £nil (2023: £1,141,593) and has been accounted for as a deduction to share premium.
24. RELATED PARTY TRANSACTIONS
The Directors consider there to be no ultimate controlling party following Admission in June 2018.
SCF – IX, L.P hold 32.1% shareholding in Tekmar Group plc and are considered by the directors to be a person
with significant control through ownership of more than 25% but not more than 50% of the ordinary share
capital and voting rights.
Related party transactions with the Company are as follows:
During the period, Tekmar Group plc procured entertainment events from Sport2Group Limited, a business
which Alasdair Macdonald is a director. Costs relating to this purchase during the period were £24,000 (2023:
£24,000). No amounts were due at the period end.
During the period Tekmar Group plc procured consultancy services from Elan Solutions UK Ltd, a business
which Richard Turner is a director. Costs relating to this purchase during the period were £11,000 (2023: £nil).
£11,000 was payable to Elan Solutions Limited at the period end (2023: £nil).
During the period Tekmar Group plc procured consultancy services from Craigshannoch Limited, a business
which Colin Welsh is a director. Costs relating to this purchase during the period were £11,000 (2023: £nil).
£1,000 was payable to Craigshannoch Limited at the period end (2023: £nil).
Key management compensation is given in note 5 (b), this includes remuneration to S Lockard and C Welsh
who are partners of SCF – IX LP.
25. SHARE BASED PAYMENTS
During the year the Group operated four equity-settled share-based payment plans (2023: four) as described
below.
The Tekmar Group plc Long Term Incentive Plan (“LTIP”)
The LTIP is a discretionary executive share plan under which the Board may, within certain limits and subject
to any applicable performance conditions, grant to eligible employees nil or nominal cost options, options
with a market value exercise price, conditional or restricted awards. All employees are eligible for selection
to participate in the plan.
The Tekmar Group plc Retention Plan (“Retention”)
The retention is a discretionary executive share plan under which the Board may, within certain limits and
subject to any applicable service conditions, grant to eligible employees nil or nominal cost options, options
with a market value exercise price, conditional or restricted awards. All employees are eligible for selection
to participate in the plan.
The Tekmar Group plc Share Incentive Plan (“SIP”)
The SIP is an all-employee ownership plan under which eligible employees may be awarded free and/or
matching shares. The SIP operates through a UK-resident trust (the “SIP Trust”). On 13 September 2018 the
Company issued 42,691 shares of £0.01 each in the Company. The shares will be held in trust for a minimum
holding period of 3 years and there is a forfeiture period of 3 years during which employees who participated
in the SIP will lose their Award if they resign or are dismissed from their employment.
On 15 September 2021 the Company issued 241,376 shares of £0.01 each in the Company. The shares will
be held in trust for a minimum holding period of 3 years and there is a forfeiture period of 3 years during
which employees who participated in the SIP will lose their Award if they resign or are dismissed from their
employment.
The Tekmar Group plc Save as you earn Plan (“SAYE”)
The SAYE is an all-employee ownership plan under which eligible employees are invited to subscribe for
options over the Company’s shares which may be granted at a discount of up to 20%. On 31 March 2021 the
Company launched the a further SAYE plan (SAYE 2021) and options over 190,252 shares were granted to 52
staff. There is a forfeiture period of 3 years during which employees who participated in the SAYE will lose
their award if they resign or are dismissed from their employment. On 31 March 2022 the Company launched
the a further SAYE plan (SAYE 2022) and options over 550,393 shares were granted to 21 staff. On 31 March
2023 the Company launched a further SAYE plan (SAYE 2023) and options over 3,306,238 shares were
granted to 43 staff. There is a forfeiture period of 3 years during which employees who participated in the
SAYE will lose their award if they resign or are dismissed from their employment.
The Tekmar Group plc Management shares awarded
In 2013 Tekmar Group plc awarded 4,075,788 shares to senior management team members in settlement of
annual bonuses. These share awards have been accounted for as share based payments under IFRS2.
Notes to the Group financial statements continued
www.tekmargroup.com
170
www.tekmargroup.com
171
www.tekmargroup.com
A summary of the options granted is shown in the table below:
Plan
1 October
2023
Granted in
the period
Exercised
in the
period
Lapsed in
the period
30
September
2024 share
options
outstanding
Vesting
period
Exercise
period
SIP
28,589
-
-
(11,451)
17,138
3 years
10 years
SAYE
3,445,474
1,045,472
-
(2,356,552)
2,134,394
3 years
10 years
Retention
17,073
-
(17,073)
-
-
3 years
10 years
LTIP
4,666,402
-
(1,180,280)
(1,672,942)
1,813,180
3 years
10 years
Plan
1 October
2022
Granted in
the period
Exercised
in the
period
Lapsed in
the period
30
September
2023 share
options
outstanding
Vesting
period
Exercise
period
SIP
53,589
-
-
(25,000)
28,589
3 years
10 years
SAYE
481,410
3,306,238
-
(342,174)
3,445,474
3 years
10 years
Retention
27,833
-
(10,760)
-
17,073
3 years
10 years
LTIP
-
5,257,165
-
(590,763)
4,666,402
3 years
10 years
Management
Award
-
4,075,788
(4,075,788)
-
-
Nil
Nil
The weighted average share price at the date of exercise for share options exercised during the year was
£0.10 (2023: £0.09).
The schemes had a weighted average remaining contractual life as follows:
Plan
2024
2023
SIP
6 Years
6 Years
SAYE
8 Years
8 Years
Retention
8 Years
8 Years
LTIP
8 Years
8 Years
The Group has recognised a total expense of £191,000 (2022: £658,427) in respect of equity-settled
share-based payment transactions in the period ended 30 September 2024. The share-based payment
transactions for the IPO options, management award options have been treated as an adjusted Item in the
profit and loss account when calculating Adjusted EBITDA. These transactions account for a £160,000 (2023:
£508,000) in the year to 30 September 2024. The remaining share based payment transactions are treated as
administrative expenses £31,000 (2023: £151,000).
Valuation model inputs
The key inputs to the Black-Scholes-Merton and Monte Carlo simulation models for the purposes of
estimating the fair values of the share options granted in the year are as follows:
Plan
SIP
SAYE20
SAYE21
SAYE22
SAYE23
SAYE24
Retention
LTIP
Grant date
13/09/18
31/03/20
31/03/21
31/3/22
31/03/23
31/03/24
22/08/20
20/04/23
Share price
at grant date
(P)
161.5
83
63.75
37.50
8.5
9.25
108
10.5
Expiry date
13/09/28
31/03/30
31/03/31
31/03/32
31/03/33
31/03/34
22/08/30
19/04/26
Exercise
price (P)
1.00
78.00
50.20
30.0
6.80
7.40
1.00
1.00
Expected
volatility (%)
44.02
45.02
78.95
45.67
165.50
51.13
53.85
165.71
Risk-free
rate (%)
2.0 %
2.0 %
2.0 %
2.0%
2.0%
2.0%
2.0 %
2.0 %
Expectation
of meeting
performance
criteria
80%
100%
85%
75%
72%
61%
100%
85%
Notes to the Group financial statements continued
www.tekmargroup.com
172
www.tekmargroup.com
173
www.tekmargroup.com
26. DISCONTINUED OPERATIONS
On 2nd May 2024, Subsea Innovation Limited was sold for £1,951,000 with payments due in instalments up
until May 2025 resulting in a loss of £547,000.
Operating profit of Subsea Innovation Limited until the date of disposal, and the profit and loss from
remeasurement and disposal of assets and liabilities classified as held for sale are summarised as follows:
30 Sep 24
30 Sep 23
£000
£000
Revenue
3,792
4,275
Cost of sales
(2,937)
(3,289)
Employee benefits expense
(763)
(1,911)
Depreciation and amortisation
(197)
(223)
Other expenses
(311)
(224)
Other income
327
8
Operating profit
(89)
(1,364)
Net finance income/(costs)
3
(10)
Loss from discontinued operations before tax
(86)
(1,374)
Tax expense
140
-
Profit/(loss) for the period / year
54
(1,374)
Loss on measurement and disposal
Loss before tax on disposal (note 14)
(1,370)
-
Total loss on remeasurement and disposal
(1,370)
-
Loss for the year from discontinued operations
(1,316)
(1,374)
Cash flows generated by Subsea Innovation Limited for the reporting periods under review until its disposal
were as follows:
30 Sep 24
30 Sep 23
£000
£000
Operating activities
48
(1,180)
Investing activities
(3)
(186)
Financing activities
(178)
1,538
Total cash flows
(133)
172
28. POST BALANCE SHEET EVENTS
After the reporting period, the Group received insurance proceeds of £5.2m in relation to legacy warranty
matters. Further details can be found in note 20 of the annual report. There were no other subsequent events.
Notes to the Group financial statements continued
Parent Company Balance Sheet
Note
30 September
2024
30 September
2023
£000
£000
Non-current assets
Property, plant and equipment
4
29
35
Investments
3
24,797
26,804
Investment property
5
2,842
-
Deferred tax assets
57
112
Trade and other receivables
6
15,964
15,869
Total non-current assets
43,689
42,820
Current assets
Trade and other receivables
6
6,348
9,481
Cash at bank and in hand
185
1,425
Total current assets
6,533
10,906
Total assets
50,222
53,726
Equity and liabilities
Share capital
1,373
1,361
Share premium
72,201
72,201
Merger relief reserve
744
1,738
Retained earnings
(33,018)
(29,295)
Total equity
41,300
46,005
Current liabilities
Other loans and borrowings
7
6,195
6,586
Trade and other payables
8
2,716
1,112
Total current liabilities
8,911
7,698
Non-current liabilities
Other loans and borrowings
7
11
23
Total non-current liabilities
11
23
Total equity and liabilities
50,222
53,726
Parent Company profit and loss account
The Company has not presented its own profit and loss account as permitted by Section 408 of the Companies
Act 2006. The Company’s loss after taxation for the period was £4.9m (2023: £8.5m)
The Parent Company financial statements were approved by the Board of Directors on 3 March 2025 and were
signed on its behalf by:
Leanne Wilkinson
Chief Financial Officer
Company registered number: 11383143
www.tekmargroup.com
174
www.tekmargroup.com
175
www.tekmargroup.com
Parent company statement of
changes in equity
Share
capital
Share
premium
Merger
relief
reserve
Retained
earnings
Total
equity
£000
£000
£000
£000
£000
Balance at 1 October 2022
609
67,652
1,738
(21,275)
48,724
Loss for the year
-
-
-
(8,537)
(8,537)
Total comprehensive expense for the
year
-
-
-
(8,537)
(8,537)
Share based payments
-
-
-
517
517
Issue of shares
752
4,549
-
-
5,301
Total transactions with owners,
recognised directly in equity
752
4,549
-
517
5,818
Balance at 30 September 2023
1,361
72,201
1,738
(29,295)
46,005
Loss for the period
-
-
-
(4,880)
(4,880)
Total comprehensive expense for the
period
-
-
-
(4,880)
(4,880)
Share based payments
-
-
-
163
163
Issue of shares
12
-
-
-
12
Total transactions with owners,
recognised directly in equity
12
-
-
163
175
Transfer following sale of subsidiary
-
-
(994)
994
-
Balance at 30 September 2024
1,373
72,201
744
(33,018)
41,300
Notes to the parent company financial statements
1. SIGNIFICANT ACCOUNTING POLICIES
The company has consistently applied the following accounting policies to all periods presented in these
financial statements.
(a) Basis of preparation
Tekmar Group plc (the “Company”) is a public limited company incorporated and domiciled in England and
Wales. The registered office of the Company is Grindon Way, Aycliffe Business Park, Newton Aycliffe, DL5 6SH.
The registered company number is 11383143.
The principal activity of the Company and its subsidiaries (together the “Group”) is that of design, manufacture
and supply of subsea cable, umbilical and flexible protection systems operating across the Offshore Wind, Oil &
Gas and other energy sectors, including associated subsea engineering services.
(b0 Reporting framework
The separate financial statements of the Company have been prepared in accordance with Financial Reporting
Standard 101 “Reduced Disclosure Framework” (“FRS 101”), on the going concern basis under the historical
cost convention, and in accordance with the Companies Act 2006 and applicable Accounting Standards in the
UK. The principal accounting policies are set out below.
The following exemptions from the requirements in IFRS have been applied in the preparation of these financial
statements, in accordance with FRS 101:
•
The following paragraphs of IAS 1 “Presentation of Financial Statements”
•
10(d) (statement of cash flows);
•
16 (statement of compliance with all IFRS);
•
111 (cash flow statement information); and
•
134-136 (capital management disclosures)
•
IFRS 7 “Financial Instruments : Disclosures”;
•
IAS 7 “Statement of Cash Flows”;
•
IAS 24 (paragraphs 17 and 18a) “Related Party Disclosures” (key management compensation); and
•
IAS 24 “Related Party Disclosures” – the requirement to disclose related party transactions between two or
more members of a Group.
•
IAS 8.30 – the requirement to disclose accounting standards issued but not effective
As the Group financial statements include the equivalent disclosures, the Company has taken the exemptions
available under FRS 101 in respect of the following disclosures;
IFRS 2 “Share-based Payments” in respect of Group settled equity share-based payments; and
Certain disclosures required by IFRS 13 “Fair Value Measurement” and disclosures required by IFRS 7 “Financial
Instruments : Disclosures”
(c) Parent Company profit and loss account
The Company has not presented its own profit and loss account as permitted by Section 408 of the Companies
Act 2006. The Company’s loss after taxation for the period was £5.129m (2023: £8.537m)
www.tekmargroup.com
176
www.tekmargroup.com
177
www.tekmargroup.com
Notes to the parent company financial statements continued
(d) Dividend distribution
The distribution of a dividend to the Company’s
shareholders is recognised as a liability in the
Company’s financial statements in the year in which it
is approved by the Company’s shareholders.
(e) Investment in subsidiary undertakings
Investments in Group undertakings are stated at cost,
unless their value has been impaired in which case
they are valued at their recoverable amount.
(f) Property, plant and equipment
Property, plant and equipment are stated at cost
less accumulated depreciation and any recognised
impairment loss.
Leased assets are accounted for as a “right-of-use”
asset under IFRS 16 Leases. The initial value of a
right-of-use asset is determined by the value of the
lease liability.
Depreciation
Depreciation is charged to profit or loss over the
estimated useful lives of each part of an item of
property, plant and equipment. Depreciation is
provided on the following basis:
Motor vehicles
4 years reducing balance
or straight line
It has been assumed that all assets will be used until
the end of their economic life.
(g) Investment property
Investment properties are properties held to earn
rentals or for capital appreciation, or both, and are
accounted for using the fair value model.
Investment properties are revalued annually with
resulting gains and losses recognised in profit or loss.
These are included in the consolidated statement of
financial position and their fair values. See note 13.
(h) Deferred taxation
Deferred tax is provided on temporary differences
between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used
for taxation purposes.
The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax
rates enacted or substantively enacted at the balance
sheet date.
A deferred tax asset is recognised only to the extent
that it is probable that future taxable profits will be
available against which the asset can be utilised.
(i) Share-based payments
The Group operates equity-settled share-based
remuneration plans for certain employees. None of the
Group’s plans are cash-settled. All goods and services
received in exchange for the grant of any share-based
payment are measured at their fair values.
Where employees are rewarded using share-based
payments, the fair value of employees' services is
determined indirectly by reference to the fair value
of the equity instruments granted. This fair value is
appraised at the grant date and excludes the impact of
non-market vesting conditions.
All share-based remuneration is ultimately recognised
as an expense in profit or loss with a corresponding
credit to retained earnings. If vesting years or other
vesting conditions apply, the expense is allocated over
the vesting year, based on the best available estimate
of the number of share options expected to vest.
The fair value determined at the grant date of equity-
settled share-based payments issued to employees of
subsidiary undertakings is recognised as an addition
to the cost of investment in subsidiary undertakings
on a straight-line basis over the vesting period,
based on the Company’s estimate of shares that will
eventually vest and adjusted for the effect of non-
market-based vesting conditions.
Employer social security contributions payable
in connection with the grant of share awards are
considered an integral part of the grant itself and the
charge is treated as a cash-settled transaction.
(j) Share capital
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares
are shown in equity as a deduction, net of tax, from
the proceeds of issue.
(k) Cash and cash equivalents
Cash and cash equivalents comprise cash balances
and call deposits with an original maturity of three
months or less.
(l) Financial assets
Classification
The Company classifies its financial assets as
loans and receivables. Management determines
the classification of its financial assets at initial
recognition.
Loans and receivables
Loans and receivables are non-derivative financial
assets with fixed or determinable payments that
arise principally through the provision of services
to customers. They are initially recognised at the
transaction price and are subsequently stated at
amortised cost using the effective interest method.
They are included in current assets, except for
maturities greater than 12 months after the end of
the reporting year. Loans and receivables comprise
mainly trade and other receivables, including
amounts owed by related entities.
Impairment of financial assets
A loss allowance for expected credit losses on
trade and other receivables and contract assets
is measured at an amount equal to the lifetime
expected credit losses. Lifetime expected credit
losses are the expected credit losses that will result
from all possible default events over the expected
life of a financial instrument. This assessment is
performed on a collective basis considering forward-
looking information. The Group considers a financial
asset to be in default when the receivable is unlikely
to pay its credit obligations to the Group in full
without recourse by the Group to actions such as
realising security (if any is held)
(m) Financial liabilities
The Company initially recognises its financial
liabilities at fair value net of transaction costs where
applicable and subsequently they are measured at
amortised cost using the effective interest method.
Financial liabilities comprise trade and other
payables, amounts owed to Group undertakings,
other liabilities and accruals and are initially
recognised at fair value, unless the arrangement
constitutes a financing transaction, where the debt
instrument is measured at the present value of the
future payments discounted at a market rate of
interest.
Trade and other payables are obligations to pay
for goods or services that have been acquired in
the ordinary course of business from suppliers.
Trade payables are classified as current liabilities
if payment is due within one year or less. If not,
they are presented as non-current liabilities. Other
liabilities include payments in advance from
customers.
Borrowings are recognised initially at fair value,
net of transaction costs incurred. Borrowings
are subsequently carried at amortised cost; any
difference between the proceeds (net of transaction
costs) and the redemption value is recognised in the
income statement over the year of the borrowings
using the effective interest method.
(n) Critical accounting estimates
The preparation of the Parent Company financial
statements requires the Directors to make estimates
and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of
liabilities. Estimates and judgements are continually
evaluated and are based on historical experience
and other factors including expectations of future
events that are believed to be reasonable under the
circumstances. Actual results may differ from these
estimates.
The Directors consider that the following estimates
and judgements are likely to have the most
significant effect on the amounts recognised in the
Group financial statements.
www.tekmargroup.com
178
www.tekmargroup.com
179
www.tekmargroup.com
Notes to the parent company financial statements continued
(a) Critical accounting estimates
Impairment of investments
The carrying amount of the Company’s investments in subsidiaries £24,797,000 as at 30 September 2024
(2023: £26,804,000). The Directors have carried out an impairment review in accordance with the accounting
policies. The forecast cash generation for each investment and the Weighted Average Cost of Capital
(“WACC”) represent significant assumptions.
The cash flows are based on a five-year forecast with a compound average growth rate over the 5 year period
of 15.1%. Subsequent years are based on a reduced growth rate of 2.0% into perpetuity.
The discount rate used was the Group’s pre-tax WACC of 14.3%.
The value in use calculations performed for the impairment review, together with sensitivity analysis using
reasonable assumptions, indicate sufficient headroom for the investments in subsidiaries and therefore do
not give rise to impairment concerns.
2. REMUNERATION OF DIRECTORS AND AUDITORS
Details of Directors’ remuneration are shown in the Directors’ Remuneration Report on page 142 of the Group
financial statements. Details of auditor remuneration are shown in note 8 of the Group financial statements.
The average number of persons employed by the Company (including directors) during the period, analysed
by category, was as follows:
2024
2023
No
No
Directors
7
6
Administration
14
13
21
19
Staff costs for the Company during the period were:
12M ending
30 Sep 2024
12M ending
30 Sep 2023
£000
£000
Wages and salaries
1,834
1,447
Social security costs
242
197
Defined contribution pension cost
80
55
Share based payments (note 25)
117
486
2,273
2,186
3. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
30 Sep 2024
30 Sep
2023
£000
£000
Investment in subsidiaries at 01 October 2023
26,804
32,325
Impairment of investment
-
(5,673)
Additions (Capital contribution in relation to share based payments)
59
152
Disposal of subsidiary
(2,066)
-
Investment in subsidiaries at 30 September 2024
24,797
26,804
The carrying amount of the Company’s investments in subsidiaries £24,797,000 as at 30 September 2024
(2023: £26,804,000). The Directors have carried out an impairment review in accordance with the accounting
policies. The forecast cash generation for each investment and the Weighted Average Cost of Capital
(“WACC”) represent significant assumptions.
The investments in the Groups subsidiaries have been reviewed for impairment on an individual basis by
assessing the value in use of the subsidiary. The value in use has been calculated using budgeted cash flow
projections for the next 5 years. The forecasts have been compiled at individual entity level with the first year
modelled around the known contracts which the entities have already secured or are in an advanced stage of
securing. A targeted revenue stream based on historic revenue run rates has then been incorporated into the
cashflows to model contracts that are as yet unidentified that are likely be won and completed in the year. The
forecasts for years 2 to 5 are based on assumed compound annual growth rates (CAGR). The CAGR applied
across the 5-year period were 15.1% for the Tekmar Limited and 10% for Pipeshield International Limited. This
CAGR is in line with expected market rate. The value in use calculation models an increase in revenue for
both CGU’s of 2% into perpetuity after year 5.
The discount rate used was the Group’s pre-tax WACC of 14.3%.
The value in use calculations performed for the impairment review, together with sensitivity analysis using
reasonable assumptions, indicate sufficient headroom for the investments in subsidiaries and therefore do
not give rise to impairment concerns.
www.tekmargroup.com
180
www.tekmargroup.com
181
www.tekmargroup.com
Notes to the parent company financial statements continued
The Company directly owns the whole of the issued ordinary shares of the following subsidiary undertakings:
Class of
share
capital held
By Parent
Company
Carrying
Value FY24
Carrying
Value FY23
Tekmar Limited
Ordinary
100%
17,494
17,430
Subsea Innovation Limited
Ordinary
0%
-
2,124
Pipeshield International Limited
Ordinary
100%
7,256
7,250
Total
24,750
26,804
All the companies listed above are incorporated in England and Wales and have a registered address of
Grindon Way, Aycliffe Business Park, Newton Aycliffe, DL5 6SH.
There are no restrictions on the Group’s ability to access or use the assets and settle the liabilities of the
Group’s subsidiaries. The principal activities of these undertakings for the last relevant financial period were
as follows:
Company
Principal activity
Tekmar Limited
Holding of shares in subsidiary companies and the management thereof
Subsea Innovation Limited
Design and manufacture of equipment for the offshore subsea industry
Pipeshield International
Limited
Design and manufacture of subsea asset protection
4. PROPERTY, PLANT AND EQUIPMENT
Motor
Vehicles
Total
£000
£000
COST
As at 1 October 2022
46
46
Additions
-
-
As at 30 September 2023
46
46
Additions
-
-
As at 30 September 2024
46
46
DEPRECIATION
As at 1 October 2022
-
-
Charge for the year
11
11
As at 30 September 2023
11
11
Charge for the period
6
6
As at 30 September 2024
17
17
NET BOOK VALUE
As at 30 September 2022
46
46
As at 30 September 2023
35
35
As at 30 September 2024
29
29
www.tekmargroup.com
182
www.tekmargroup.com
183
www.tekmargroup.com
Notes to the parent company financial statements continued
5. INVESTMENT PROPERTY
Investment property includes commercial properties in England which are owned to earn rentals and for
capital appreciation.
Changes to carrying amounts are as follows:
30 Sep 2024
30 Sep 2023
£’000
£’000
Carrying amount 1 October
-
-
Additions
2,842
-
Change in fair value – revaluation
-
-
Carrying amount 30 September
2,842
-
The investment property is either leased to third parties on operating leases or are vacant. Rental income of
£nil (2023: £nil) is shown within other operating income all at a fixed rate. There are no expenses in relation to
the investment property.
Although the risks associated with rights the Group retained underlying assets are not considered to be
significant, the Group employs strategies to further minimise these risks. The under guaranteed residual
values do not represent significant risk for the Group, as they relate to property which is located in a location
where market value, year on year, has always remained stable with trivial fluctuations. For example, ensuring
the contract includes clauses requiring the lessee to compensate the Group when a property has been
subjected to excess wear-and-tear during the lease term. The lessee does not have an option to purchase the
property at the end of the lease expiry period.
The lease contract was initially signed for one year at zero rentals, with the option to extend at the end of the
period in May 2025 at which time annual lease charges will be agreed.
6. TRADE AND OTHER RECEIVABLES
30 Sep 2024
30 Sep 2023
£000
£000
Amounts owed by Group undertakings – non-current
15,964
15,869
Amounts owed by Group undertakings – current
4,234
9,410
Prepayments and accrued income – current
372
71
Deferred consideration
1,742
-
Total - Current
6,348
9,481
22,312
25,350
All of the amounts owed by Group undertakings shown above are repayable on demand and attract interest
at rates between 0% and 3%. No expected credit losses are recognised on intercompany receivables as
historically no balances have been defaulted on.
7. BORROWINGS
30 Sep 2024
30 Sep 2023
£000
£000
Current
Trade Loan Facility
3,183
3,575
Finance lease
12
11
CBILS Loan Facility
3,000
3,000
6,195
6,586
Non-current
Finance lease
11
23
11
23
30 Sep 2024
30 Sep 2023
£000
£000
Amount repayable
Within one year
In more than one year but less than two years
6,195
11
6,586
23
6,206
6,609
The above carrying values of the borrowings equate to the fair values. The trade loan facility is provided at
interest rate of 2% over base rate pa and is available to the Company until 31 July 2025. The CBILS loan facility is
provided at interest rate of 2% over base rate pa and is available to the Company until 31 October 2025.
Finance leases related to electric vehicles purchased as part of an employee benefit scheme. These have been
discounted at a rate of 3.25%.
8. PAYABLES: AMOUNTS FALLING DUE WITHIN ONE YEAR
30 Sep 2024
30 Sep 2023
£000
£000
Trade payables
235
243
Amounts due to Group undertakings
1,623
393
Other taxation and social security
275
99
Accruals and deferred income
583
377
2,716
1,112
9. SHARE CAPITAL
Details of movements in shares are set out in note 24 to the Group financial statements.
10. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the exemption included in IAS 24 ‘Related Party Disclosures’ not to
disclose details of transactions with Group undertakings, on the grounds that it is the parent company of a
Group whose accounts are publicly available.
Directors’ transactions
Details of the Directors’ interests in the ordinary share capital of the Company are provided in the Directors’
Report.
www.tekmargroup.com
184
www.tekmargroup.com
185
www.tekmargroup.com
Notes to the parent company financial statements continued
11. SHARE-BASED PAYMENTS
The Company operates a number of share option arrangements for key executives and employees,
further details of which can be found in note 26 to the Group financial statements. Further details of the
arrangements for senior executives can be found in the Directors' Remuneration Report in the Group financial
statements.
The Company recognised total expense of £118,000 in respect of the equity-settled share-based payment
transactions in the period ended 30 September 2024 (2023: £486,036).
Notes:
www.tekmargroup.com
186
www.tekmargroup.com
187
www.tekmargroup.com
www.tekmargroup.com
Annual Report 2024
Enabling the world’s
energy transition