15th Jun 2021 13:30
(Alliance News) - TP Group PLC on Tuesday reported a widened loss despite higher revenue, due to pandemic disruption.
The Hampshire, England-based consulting, software and engineering company said its pretax loss widened to GBP5.2 million in 2020 from GBP1.2 million in 2019, despite revenue increasing by 20% to GBP59.0 million from GBP49.4 million. In keeping with the previous year, the company declared no dividend.
TP said margins were reduced by the coronavirus pandemic, which delayed project execution, disrupted supply chains, and led to higher overall resource use.
Shares were trading down 19% at 4.56 pence each in London on Tuesday afternoon.
More positively, the company won a series of high-value contracts in 2020, it said, including a GBP5.0 million order for an Army headquarters transformation programme and orders worth over EUR30.0 million from its contract with the European Space Agency, which now has been extended until December 2022.
Additionally, TP acquired consultancy and software business Osprey Consulting Services Ltd in August, and this contributed GBP5.8 million to the overall order book and GBP1.4 million to revenue in 2020.
Following the first quarter of 2021, TP said its order book already covers budgeted revenue to 72% in 2021 and 41% in 2022.
For the remainder of 2021, TP said it plans to continue investment into higher-margin artificial intelligence technology and to expand into the US and Middle East markets to maintain growth in the coming years. The company currently operates in six European countries, serving global customers under long-term contracts. In 2020, the company celebrated its first significant contract in the US, for an AI system project.
TP said it will continue to dispose of loss making or non-essential businesses. In 2020, it sold the loss-making Manchester-based fabrication business TPG Engineering Ltd and discontinued a non-core business, Lift BV. Currently, TP is in discussions with a preferred bidder to dispose of TPG Maritime Ltd.
If required, TP expects to be able to use the GBP5 million accordion option on its fully drawn GBP7 million credit facility maturing in 2023. The credit facility was secured in February 2020 and was fully drawn within the year.
Chief Executive Phil Cartmell, said: "Through this period, we were able to grow our revenue by 20%, due to a strong opening order book, continuity of critical programmes, the addition of Osprey and Sapienza, and the continuing capture of new contracts, despite the backdrop of global uncertainty caused by the Covid-19 pandemic. We trust that the uncertain trading conditions of 2020 will eventually stabilise, and so we have taken the opportunity to prepare the group to continue revenue growth and return to improving profit levels."
By Scarlett Butler; [email protected]
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