GYG reports ‘positive momentum’ despite Covid-19

opinion

by Superyacht Investor Contributor

25 September 2020

Superyacht painting, maintenance and supply firm, GYG has released its interim results for the first half of 2020. The firm, which trades primarily as Pinmar, Pinmar Supply, and Technocraft, said it has positive momentum with a record order book going into the fourth quarter.

Remy Millott, chief executive, GYG, said: “I am pleased with the group’s performance in H1 [first half] given the unprecedented circumstances that remain prevalent across the globe. Our teams have worked hard to ensure that we can continue to deliver projects on time and on budget, while working with the additional safety measures that we have put in place. I would like to take this opportunity to thank all of our employees for their continued efforts and resilience in the face of the pandemic.”

Overall group revenue fell 12% to €29.1m, compared with €33.1m in 2019 due to the impact of Covid-19. . Coatings (refit and new build) revenue decreased 10.2% to €24.5m from €27.3m last year. Supply revenue dropped 19.3% to €4.6m compared with €5.7m the previous year.

Adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased 6.7% to €1.6m in H119 at €1.5m. Adjusted EBITDA margin therefore increased 21.4% to 5.6% from 4.5% in H119. Operating profit maintained at €0.1m. There was a loss before tax of €0.5m down from a profit before tax of €0.1m in the first half of last year. GYG reported net debt of €10.9m on 30th June 2020 up from €8.1m last year. Finally, cash of €3.0m on 30th June 2020 reduced from €5.5m on 30th June last year.

GYG noted that bank facilities were improved and the balance sheet was strengthened to provide resilience against COVID-19 uncertainties. While a record Order Book on 22nd September 2020 provides “more forward visibility than ever before”. The total Order Book increased €11.1m, up 26% since 30th June 2020, with 24% increase in the current year.

GYG has started work on three of the six new build contracts signed in 2019, with three to start in the fourth quarter of this year. The company also signed a major contract and begun work in Q320 on an 80m-plus new build in a new shipyard. GYG has reported “strong momentum” in refit during 2019, which has continued into the first of 2020 with several major refit contracts signed for an immediate start. Whilst the supply division’s “new branding and renewed focus on direct yacht sales through Pinmar Yacht Supply delivering positive results”.

Millott concluded: “GYG’s order book is the strongest it has ever been and we continue to have positive discussions with both the new build shipyards across Europe and also yacht owners, captains and management companies with regards to their refit requirements. I am confident that this positive momentum will continue through H2 [second half] and into 2021 as the industry prepares and hopes for a more normalised cruising season in 2021.”

Investment research analyst, Mike Allen, employed by Zeus Capital to publish a piece on GYG’s results, commented: “Following a number of recent contracts wins GYG’s order book now stands at record levels, which we believe should give investors confidence in current forecasts. We leave our published numbers unchanged at this juncture but believe our assumptions to be well underpinned by increasing trading momentum backed by the record order book, coupled with efficiencies and cost savings evident in the H1 margin trends.”

GYG first half results – at a glance

• Adjusted EBITDA up 6.7% to €1.6m (H119: €1.5m)

• Adjusted EBITDA margin up 21.4% to 5.6% (H119: 4.5%)

• Operating profit maintained at €0.1m (H119: €0.1m)

• Loss before tax of €0.5m (H119: profit before tax €0.1m)

• Net debt of €10.9m at June 30th 2020 (June 30th 2019: €8.1m)

• Cash of €3.0m at June 30th 2020 (€5.5m at June 30th 2019)

• Bank facilities improved and balance sheet was strengthened to provide resilience against Covid -19 uncertainties

• Record order book at September 22nd 2020

• Total order book increased €11.1m, up 26% since June 30th 2020, with 24% increase in current year.