Fulcrum Utility Services shares slump as expects to swing to loss

(Alliance News) - Fulcrum Utility Services Ltd on Monday reported that it expects to record a significant fall in revenue and a substantially widened loss in its half year results as it battles deep-rooted problems.

Shares in Fulcrum Utility Services were trading 32% lower at 4.01 pence each in London on Monday morning.

In a trading update ahead of its half year results, the Sheffield-based multi-utility infrastructure and services provider said it has "continued to experience the impact of significant challenges of ongoing adverse energy and wider market conditions".

The company expects to report revenue of GBP24.0 million for the half-year that ended September 30, down from GBP28.6 million in the same period the last year.

It expects an adjusted earnings before interest, taxation, depreciation and amortisation loss of around GBP3.0 million, swung from a profit of GBP1.0 million last year.

Ongoing challenges with the legacy and closure of historic projects, and the "unprecedented cost increases" impacting much of the group's supply chain, have continued to erode sales margins, the company noted.

For the full year Fulcrum Utility Services now expects revenue to be GBP49.0 million, down from GBP61.8 million last year, and an adjusted EBITDA loss of GBP6.0 million, from a GBP500,000 profit last year.

The company drew attention to a series of major utility contracts that it had won in the first half of the year. This included a GBP4.1 million contract to design and deliver high voltage electrical infrastructure for a new 158-acre solar farm and a GBP2 million multi-utility infrastructure project to power a leisure resort in the south of England.

While the company has taken actions to reverse the business's operating performance, it noted that it's challenges are "historic in origin" and, as such, the benefits of business improvements are "taking longer than anticipated to realise".

Chief Executive Officer Antony Collins said: "Clearly the board and I are disappointed in these results but I am confident that the steps needed to turn Fulcrum around are well underway. I always knew the task of turning Fulcrum around would be a hard one and the challenges that the group has faced are much deeper and wider spread than anyone previously anticipated. However, I believe the major issues have now been identified and measures and ameliorations put in place to improve performance."

By Chris Dorrell; [e-mail]

Copyright 2022 Alliance News Limited. All Rights Reserved.