FY22 Annual Report, March 2023: click here to

Commercial in confidence

Tekmar Group Plc

Company number: 11383143

Year ended: 30 September 2022

Annual Report 2022

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Commercial in confidence

Contents

Strategic Report

1. Chairman Statement
2. CEO Review

11 CFO Review

1. Vision, Mission & Values
2. Strategic Review

21 Market Review

1. Our Business Model
2. Our Business Model in Action

1. Key Performance Indicators
2. Sustainability Report

Governance

1. Message from the Chairman
2. Corporate Governance Statement

1. Board of Directors
2. Key Management

1. Risk Management

1. Audit Committee Report

1. Remuneration Committee Report

1. Nomination Committee Report
2. Directors' Report

1. Statement of Directors' Responsibilities

Financial Statements

57 Independent Auditor's Report

1. Consolidated Statement of Comprehensive Income
2. Consolidated Balance Sheet
3. Consolidated Statement of Changes in Equity
4. Consolidated Cash Flow Statement
5. Notes to the Group Financial Statements

1. Parent Company Balance Sheet
2. Parent Company Statement of Changes in Equity
3. Notes to the Parent Company Financial Statements

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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

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Highlights

• Revenue of £30.2m (18M to 30 September 2021: £47m, 12M to September 2021: £31.8m) and Adjusted
  EBITDA loss of £2.1m for the year (18M to 30 September 2021: loss of £2.1m, 12M to 30 September
  2021: loss of £2.9m).
• Revenue of £17.2m for H2 22 (6M to 31 March 2022: £13.0m) and Adjusted EBITDA loss of £0.3m (6M
  to 31 March 2022: loss of £1.8m) highlights an improved second-half performance.
• Gross margin of 23% represents a 330 basis points improvement on prior year (FY21: 20%) and shows business transition continues.
• Secured and delivered the Group's largest project to date in excess of £10m for pipeline protection systems in the Middle East.
• Selected for Dogger Bank C Offshore Wind Farm (in continuation of the previously announced Dogger Bank A & B contracts), when delivered will be the largest global offshore wind project.
• The above contract awards support growth in our order book to £22.9m as at the end of December
  2022, which is the largest reported since the Company's admission to AIM.
• On a statutory basis Group loss before tax was £5.2m (18M to 30 September 2021: £5.8m loss)
• The Group held £8.5m of cash as at 30 September 2022, including the drawdown of bank facilities from the £3.0m CBILS loan and £4.0m trade loan facility. Both these facilities were renewed post year end to 2023.
• The formal sale process and strategic review process continues and the Board anticipates drawing this process to a successful conclusion for the benefit of stakeholders.

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Strategic Report

The Board has established a strategic plan that will see us capitalise on our strong foundations, diversifying further into the offshore wind industry by disciplined investment in new technology and innovation. We will do this through:

1. Leveraging our market advantage
2. Expanding and deepening our value proposition
3. Innovation in applied engineering
4. Disciplined investment
5. Operational excellence
6. Initiatives to return to profitability followed by high quality profitable growth
7. Sustainable shareholder returns

The strategy is supported by our core building blocks

1. Organic Growth: Ambition to double organic revenue growth
2. Business Improvement: Deliver a sustainable mid-to high teens EBITDA margin in the later years of the plan
3. Acquisition Strategy: Bolt-on technologies and services that align with our offshore wind focused growth plan

In June 2022 the Board announced the intention to seek a strategic partner to support the Group's opportunities for growth with an option to accelerate the plan.

Strategic Report Contents

1. Chairman's Statement
2. CEO Review

11 CFO Review

1. Vision, Mission & Values
2. Strategic Review

21 Market Review

1. Our Business Model
2. Our Business Model in Action

1. Key Performance Indicators
2. Sustainability Report

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