Tekmar Group Expects Break-Even EBITDA for FY2025 Due to Order Delays

Tekmar shifts FY2025 guidance to adjusted EBITDA break-even after order delays

Tekmar Group (AIM: TGP) has nudged expectations for the year to 30 September 2025 to adjusted EBITDA break-even, citing slower conversion of a strong bidding pipeline into firm orders. That is a step down from June’s indication that FY2025 could be broadly in line with FY2024’s £1.7 million adjusted EBITDA.

The company still expects a better second half than the first, but with some forecast revenue sliding into FY2026 as customers take longer to make procurement decisions. The direction of travel is positive – improving margins and second-half profitability – but the timing has slipped.

What changed since the interim results?

In June, management highlighted a visible pipeline with in excess of £50 million of projects scheduled for award in the second half of the calendar year to December 2025. The pipeline has stayed strong and Q4 FY2025 was busy for new awards, but conversion to orders has lagged expectations.

As a result, Tekmar now guides to adjusted EBITDA break-even for FY2025. Given the first half delivered a £0.7 million EBITDA loss, that implies a roughly £0.7 million positive EBITDA in the second half – a notable swing, driven by higher margins. The narrative is not about demand drying up; it is about customers taking longer to sign, pushing revenue recognition into FY2026.

Key numbers at a glance

FY2024 adjusted EBITDA	£1.7 million
FY2025 adjusted EBITDA outlook	Break-even
H1 FY2025 EBITDA	£0.7 million loss
Pipeline scheduled for award (H2 CY2025)	In excess of £50 million
Net debt (30 June 2025)	£2.6 million
Run-rate capex (FY2025)	Less than £0.5 million
China aged debt payment plan	£2.1 million agreed; £0.6 million received in June 2025
Asset held for sale (book value)	£2.8 million (former Subsea Innovation site)
CBILs loan due	31 October 2025

Project Aurora: building scale, mix and margin

Under CEO Richard Turner, Tekmar has been reshaped to deliver Project Aurora – a medium-term plan to deliver true scale and record financial performance via operational gearing. That essentially means lifting volumes through a leaner platform so more revenue drops through to profit.

There are several strands to this:

• Sales engine upgrade – stronger and realigned Sales organisation to give customers efficient access to the full breadth of asset protection technology and offshore energy services.
• Two verticals – Asset Protection Technology and Offshore Energy Services – creating a leaner cost base and better operational efficiency.
• Services growth – Offshore Energy Services is running at a materially higher sales run-rate than FY2024, with a mid-term aim to reach 25% of Group revenue (from 6% in FY2024).
• Warranty cloud lifted – two legacy warranty matters settled this year with no admission of liability and no cash impact, fully covered by insurance monies already received.
• M&A pipeline – discussions ongoing with selected targets, with a disciplined approach to ensure value for shareholders.

The near-term order book is described as healthy and well balanced by sector and geography, supporting a strong starting backlog for FY2026. That mix shift towards higher-value services, if sustained, should help margins.

Cash, net debt and the CBILs repayment

Net debt stood at £2.6 million as at 30 June 2025. Management says existing loan facilities provide adequate cash resources to support working capital and the repayment of the CBILs loan due on 31 October 2025.

Cash discipline remains tight: FY2025 run-rate capex is expected to be less than £0.5 million. On receivables, there has been progress on aged debt over the last 12 months, including an agreed plan on £2.1 million of China aged debt, with £0.6 million collected in June 2025.

There is also optionality from the former Subsea Innovation freehold premises, held for sale at a book value of £2.8 million. While book value is not a guide to proceeds, it is a tangible asset that could help liquidity if needed.

Why this update matters for investors

This is a modest downgrade on FY2025 profitability, driven by timing rather than demand. The company still expects higher second-half revenue and EBITDA than the first half, but not enough to match last year’s £1.7 million adjusted EBITDA.

On the positive side:

• Second-half swing to profitability implies underlying improvements in pricing and execution.
• The near-term pipeline and anticipated strong starting backlog set FY2026 up more favourably.
• Services growth and a leaner structure should improve resilience and margin potential.
• Legacy warranty issues have been addressed with no cash hit.

On the watchlist:

• Order timing risk remains the key variable – further slippage would push more revenue into FY2026.
• Liquidity planning is crucial with the CBILs repayment due on 31 October 2025, though facilities are said to be adequate.
• M&A adds potential upside, but also execution risk. The Board’s commitment to discipline is reassuring.

Outlook: set-up for FY2026 looks stronger, but timing is everything

Management describes FY2025 as a transition year – starting with a below par pipeline and significant free capacity, and ending with a healthier backlog and a business aligned to its strategic plan. If the conversion of the in excess of £50 million scheduled awards lands as anticipated, FY2026 should benefit from both higher volumes and better utilisation.

The message today is pragmatic: near-term profitability is flatter than hoped, but the building blocks for growth are in place. For investors, the next catalysts will be order intake, backlog disclosure, and confirmation of CBILs repayment on schedule.

Jargon buster

• EBITDA – Earnings before interest, tax, depreciation and amortisation, a proxy for operating cash profit.
• Adjusted EBITDA – EBITDA adjusted for material one-off or significant items to show comparable performance.
• Pipeline vs backlog – Pipeline is potential work under bid or negotiation; backlog is work contracted but not yet delivered.
• CBILs – Coronavirus Business Interruption Loan Scheme, a UK government-backed loan introduced during the pandemic.

My view in a sentence

A timing-driven reset to break-even is not ideal, but the combination of a stronger pipeline, improving second-half profitability, services growth, and tighter cash control leaves Tekmar better positioned heading into FY2026.