Business
Trading Statement and the Impact of Corona Virus
Trading Statement and the Impact of Corona Virus.
About this update from Tekmar Group Plc
[{"type":"text","content":"\n \nRNS Number : 2699D Tekmar Group PLC 18 February 2020 \n\n18 February 2020\n \nThe information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.\n \nTEKMAR GROUP PLC\n(\"Tekmar Group\" or the \"Group\")\n \nTRADING UPDATE AND THE IMPACT OF CORONAVIRUS\n \nTekmar Group (AIM: TGP), a leading technology provider of subsea protection systems for the global offshore energy markets, announces a trading update, which reflects the foreseeable impact of the outbreak of the coronavirus on the Group's performance in the year ending 31 March 2020 (\"FY20\").\n \nThe Board stated, in the Half Year Results announced on 3 December 2019 (RNS Number 4083V), that seasonal weighting in the Group's performance was in line with our expectations and that the Group was firmly on track to meet market expectations for FY20. These expectations included identified sales into China in Q4. In addition to this, some of the Group's estimated cost of sales was based on pricing for components sourced from China.\n \nChina's necessary and prudent response to the outbreak of the coronavirus, including the restriction of travel in the country, is affecting the Group's performance materially in a number of ways. The Board now expects that the Group's earnings in FY20 will be broadly in line with those achieved in FY19, as a result of the following factors:\n \n· all of the Group's projects scheduled for shipment to China have been delayed and there is little visibility as to when travel restrictions will be lifted;\n \n· the supply of components from China has ceased pending further notice. The Group has the ability to source replacement components from Europe and any resulting delay will not affect contractual delivery schedules for clients, but does affect the timing of revenue recognition and margins on affected projects; and\n \n· the Group's office in Shanghai, which services the whole of APAC, has been placed on official shutdown, as have many of our clients' and suppliers' offices in the region. \n \nChina accounted for circa 10% of our revenue ...