Interim Report for the six months ended 30 June 2014
Corac Group ("Corac" or "the Group"), a group of companies that design, deliver and support advanced engineering systems in the global energy and security markets, today announces its interim results for the six months ended 30 June 2014.
- revenue growth and improved financial performance in each business
- HTT delivering growth with improved margins
- broadening of ACI customer base and additional orders from existing customers
- appointment of Simon Kings as MD at ACI with extensive Naval and international business development experience
- successful build and testing of CET renewable energy solutions with progress to manufacturing agreement expected with partners in the second half of the year
- refocused CET in the upstream gas sector on highest economic value applications
Group financial commentary
Growth in all three operating companies improved Group revenues by almost 20% to £9.9m (2013: £8.3m).
Total R&D2 spend was £1.4m (2013: £1.4m) and was focused on supporting ongoing testing of the proven technology within the CET business. Central costs include a charge of £250k as settlement of a legal claim resolved in June 2014.
The Group loss before tax was reduced to £2.1m (2013: loss before tax of £2.4m), and the Adjusted Group EBITDA1 loss was £1.4m (2013: loss £1.7m).
The timing of working capital flows and the continued investment programmes have led to a reduction in cash balance to £8.9m in the first half of the year (31 December 2013: £13.7m), which was in line with management expectations. The working capital movements are expected to reverse in the second half of the year.
Group order book stood at £12.2m as at 30 June 2014 (30 June 2013: £13.2m) and reflects timing factors on the issue of certain major contracts. Together with strong order intake since 30 June, this provides good visibility of revenue in the second half of the year.
Commenting on the results, Chief Executive Officer Phil Cartmell said:
"The results issued today demonstrate how the Group businesses are maturing and are on the path to making good returns on their activities. They have focused on their technical advantages and their strongest relationships whilst eliminating those activities that have proved to be a drain on their resources and performance.
"The Group continues to evolve and grow, and with each of the operating businesses making stronger contributions we anticipate demonstrating the true value that exists in our technologies and propositions.
"The Board is confident in Corac's outlook and expect an improved performance in the second half of the year. We anticipate being ahead of market expectations with reduced losses and in a robust financial position."
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