Trading Update

RNS Number : 2210U

Infrastrata PLC

01 April 2021

 

1 April 2021

InfraStrata plc

("InfraStrata" or the "Company")

Trading update

InfraStrata plc (AIM: INFA), the UK quoted company focused on strategic infrastructure projects and physical asset lifecycle management is pleased to provide a trading update at the end of the first quarter of this calendar year.

Key highlights:

· Revenues of circa £6.50 million booked in the eight months to 31 March 2021; further growth momentum expected this year

· Cash breakeven within the cruise and ferry market maintained; larger contract wins established

· Acquisition of assets of Bifab in February; the Company now has the UK's largest fabrication footprint

· Harland & Wolff (Appledore) is now fully operational and generating revenue

· DAERA's recommendation on the Marine Licence now issued to the Minister   

The Company has been making steady progress since the beginning of the new financial year and the Company's management accounts show revenues in the eight-month period to 31 March 2021 stood at c£6.50 million. This is significant growth from the year-end results, where revenues of c£1.4 million were recorded. We outlined our strategy of building our business at Harland & Wolff across five core markets, viz, cruise & ferry, commercial fabrication, oil & gas, defence and renewables. We are pleased to report that Harland & Wolff has achieved a cash break-even position within the cruise & ferry market since October last year and continues to maintain a similar position through Q1'21.

Cruise & Ferry Market

Contract values within the cruise and ferry market have seen a quarter-on-quarter increase, with average contract values now in the range of between £600,000 and £1 million. We are pleased to report repeat business from our clients, and we expect contract values to increase further over time, as confidence in our skills and expertise grows. COVID-19 has had an adverse impact on passenger and cargo movements and, consequently, ferry operators are currently only placing contracts for emergency and the most necessary works required to be undertaken on their vessels in order to maintain their classification society approvals. We expect to see a rebound in client spend as the economy opens up and lockdown restrictions are further lifted. Following the UK Government's announcement allowing cruising to commence around the UK from May onwards, we have seen a rise in the level of inquiries for dry-docking of cruise vessels ahead of their sailings. Subject to the cruise industry witnessing continued buoyancy, we expect to see a number of dry-docking contracts signed in Q2 and Q3 of this year.

Acquisition of BiFab's Assets

The Company acquired the assets of Burntisland Fabrications Limited (in administration) (Bifab) on 12 February 2021 along with the leases on two sites: Methil on the east coast of Scotland; and Arnish on the west coast of Scotland. Both sites are strategically located to service the wind farm fabrication sector that is currently witnessing significant growth momentum, especially following the UK Government's plans of a new Green Industrial Revolution. Three sites (Belfast, Appledore and Methil) are now fully operational with Arnish being ready in June. We now have the largest fabrication  footprint in the UK, with the capacity and capability of attracting large fabrication contracts by offering clients optimised delivery schedules, spreading fabrication risk across four sites and significant cost savings.

Works on the Appledore dock gates have now been completed and they have been fully reinstalled. We welcomed our first clients on the newly refurbished slipway last month and a ramp-up of the Appledore facilities is now taking place in a systematic and controlled manner. Alongside this, a number of contracts for Appledore are currently in advanced negotiations and, as they come to fruition towards the end of this year, we shall be increasing our workforce proportionately.

The Company has been informed by the Department for Agriculture, Environment and Rural Affairs (DAERA) that it has issued its recommendation on the Marine License application to the Minister for Department for Agriculture, Environment and Rural Affairs, Mr Edwin Poots MLA. The Company expects to make a further market announcement as soon it has received any further formal notification from the Minister's office in relation to the grant of the Marine Licence.

John Wood, CEO of InfraStrata commented:

"We believe that we have now built significant growth momentum over the past few months that will lead to large contract wins across the five core markets within which we operate.

With the gradual lifting of lockdown restrictions, we anticipate larger spending patterns that will eventually lead to higher revenues across the second half of the calendar year.

We have set ourselves up in strategic locations, which are in close proximity to major renewable and fabrication projects that will come to fruition in the months ahead.

We continue to pursue defence related work and have made significant inroads with the Ministry of Defence on a number of defence and quasi-defence contracts. Defence contracts tend to take longer to be awarded but will be a key market within our portfolio.

Looking ahead, we shall be announcing our interims shortly and endeavour to provide similar and regular trading updates to the market."

This announcement contains inside information.

For further information, please visit  www.infrastrataplc.com  or contact:

InfraStrata plc John Wood, Chief Executive Seena Shah, Head of Marketing & Communications	[phone] [e-mail]
Cenkos Securities plc (Nominated Adviser & Broker) Stephen Keys, Callum Davidson(Corporate Finance) Michael Johnson (Sales)	[phone]

 

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