Strong second half helps marine technology group exceed annual forecasts
OTAQ, the Lancaster-based marine technology group, expects to achieve better than forecast revenues for the year ending December 31, 20233, and a reduced adjusted EBITDA loss.
In a trading update ahead today, it said it had experienced a better second half than the previous financial year.
It said it expects to report revenues of approximately £4.4m for fiscal year 2023, compared with £4m in 2022, exceeding management’s prior revenue expectations driven by a particularly strong second half to the year.
Revenues in the second half are expected to be not less than £2.5m, up 93% on the same period last year (FY22: £1.3m) and up by more than 40% on the first half of FY23.
The company expects to report a reduced adjusted EBITDA loss for the year of approximately £245,000, down from a loss of £331,000 in the prior year, which was adjusted for a one-off deposit returned in respect of SealFence and other restructuring costs.
Revenue generation has been underpinned by the Offshore division, particularly benefiting from the continued demand and increased orders for its Connector solutions and OceanSense products.
The company also benefited from strong traction during the second half of the year in its Aquaculture division, in particular delivering two orders of Shrimp Sonar Device orders, totalling 200 units, to Minnowtech.
Additionally, 42 Live Plankton Analysis Systems (LPAS) are now deployed with customers, feeding vital plankton images back to OTAQ. The company anticipates that at the year-end it will have 16 of its LPAS beta systems deployed with salmon farmers in Scotland, Ireland, Chile, Australia, and New Zealand, on a trial basis.
The group, through careful management of its cash resources, said it has managed to weather the brunt of the well documented inflationary pressures and supply chain challenges experienced by the wider economy, while delivering pleasing progress and, as at December 18, 2023, the company had a cash balance of £400,000, with a strong debtor book of £1.1m (30 June 2023: £900,000 cash, £800,000 debtors).
From June 30, 2023, to December 18, 2023, £189,000 of the group’s CBILS loan had been repaid – the balance outstanding is £1.1m.
Chief executive, Phil Newby, said: “The board is pleased to note the progress made across the company, and particularly the improving market backdrop in Offshore, where OTAQ is well positioned to target developing global growth opportunities for its OceanSense, Eagle IP, Lander seabed survey, and subsea electrical connector and penetrator solutions.
“With an improved reported revenue expected for year, the board remains confident in its current growth strategy, part of which is to commercialise a number of opportunities in the Aquaculture space.
“With LPAS systems now live, OTAQ is in constant receipt of highly valuable data that will, through a machine-learning process, further enhance the AI engine and improve customer outcomes.”
OTAQ targets the aquaculture, geotracking and offshore markets. It already has a number of established products in its portfolio and is focused on further developing its presence, customer base and cross-selling opportunities within core markets, both organically and via acquisition.
Its aquaculture products, which include a sonar device to scan shrimp in ponds and water quality monitoring, are focused on maximising welfare and production yields. It also continues to target opportunities in the acoustic deterrent devices market via its Sealfence product, which is used by salmon farmers, with global opportunities in Chile, Australia, Canada and Norway.
And the company is developing high accuracy location trackers for specialist applications. Having already added clients within safety and multiple participant sport/racing applications, OTAQ is investigating wider market potential – including opportunities in the seafood industry.
