GYG – Revenue increased, short-term debt racks up


Superyacht painting and maintenance firm GYG increased its annual revenue and cut non-current debt in 2017. But this latter figure overlooks the fact that short-term debt, particularly trade creditors, increased sharply.

The company listed on London’s Alternative Investment Market (AIM) in July last year, raising a total of £6.9 million in new equity through an IPO – which it promptly used to mitigate its outstanding shareholder loans, interest and fees and the IPO expenses.

This contributed to the company’s net debt being reduced from €10.4 million at end-2016, to €6.7 million at the end of 2017.

Revenue saw double-digit growth from a 2016, reaching €62.6 million, up 14.7% from 2016’s comparable €54.6 million. Most of this growth can be attributed to its refit and new-build operations which generated 16.7% more revenue, up from €46.0 million in 2016 to €53.7 million in 2017.

The company’s supply business saw smaller growth of 4.2%, reaching €8.9 million, up from €8.6 million in FY2016.

GYG had a record orderbook at the end of 2017, with a total of €20.4 million projects booked up until 2020 and is confident that its market share in the yacht coating space is set to grow. Remy Millott, CEO of GYG said:

“We have had an encouraging start to 2018, with a busy first quarter in refit, and good progress to the forward Order Book, having signed some major new-build projects which will come on-stream later this year and during 2019 and 2020. I am particularly excited that our first major project has started at the newly refurbished Savannah Yacht Center in the US. This is an important milestone for GYG and this will further accelerate the growth of our US operations”.

“GYG is well placed to increase its coating market share through an organic growth strategy and to capitalize on the 6% estimated annual growth in our addressable market, as a result of the continued growth of worldwide billionaires buying larger yachts and increasing the global superyacht fleet. As a result, the Board looks to the future with confidence”.

In September last year, GYG’s interim results showed a 19.4% increase in revenue, with a 23.3% rise in its coatings and paint business and a 3.9% rise in the supply revenue. Whilst GYG still closed off 2017 with double-digit increase in overall revenue, the growth of its core coating and painting business slowed during the year’s second half.

Financial standing

The company’s core coating and refit division is seeing solid repeat business. This helped drive the company’s operating margin to a solid 11.5% though on an EBITDA basis the increase was 7.6%,

GYG’s total year-end liabilities grew to €35.4 million at the end of 2017against €32.5 million at end- 2016. The company also saw a taxed loss of €0.48m in 2017, almost half of 2016’s comparable €0.90m. If this sounds unpromising, it’s worth bearing in mind that acquisitions are being bedded down and that, it its early stages, organic growth is not cost free.

The group’s operating profit fell by €0.5 million in 2017 to €1.4 million. This is on top of €3.9 million of exceptional items – which mainly comprised IPO fees and costs associated with 2016’s acquisition of ACA Marine. Before the IPO in July, GYG acquired a majority stake in ACA Marine, a competitor superyacht painting firm located in the South of France in March 2017. This decision was bolstered to give the Spain-based GYG a footing in the important France region.

The company’s share price closed at £1.14 today after a period at the end of March when the price dipped to a 52-week low of £0.95 and averaged around £1.06.