Healthy performance as listed utilities business recovers from pandemic

Fulcrum, a utilities infrastructure and services provider, says it has successfully coped with the pandemic by maintaining revenues and increasing its order book in the first half of its current financial year.

The Sheffield-based company has released its interim results for the six months ending 30 September 2020.

Despite the impact of COVID-19, it achieved revenues of £19.5m, matching levels for the corresponding six months in 2019.

In addition, its order book has grown to £68.5m, increasing by 9.4% from £62.6m.

The company reports adjusted pre-tax loss of £2.4m (2019: £0.1m profit). And its adjusted EBITDA records a loss of £1m, reflecting the impact of COVID-19, combined with the investments made by the business in the period for strategic growth.

Fulcrum says it has maintained its focus on retaining a strong balance sheet and healthy cash flow, balanced with strategic investment.

Supporting this strategy was its second asset transfer to ES Pipelines Ltd, which completed on 30 November 2020 and generated cash of £4.7m.

This follows on from an additional £0.4m in cash received relating to the first tranche of the asset sale, which was generated when Fulcrum achieved an enhanced payment milestone in the agreement, following a series of new housing contract wins.

To fund the future acquisition of utility assets, Fulcrum entered into a new two-year £10m Revolving Credit Facility on 1 December 2020. The majority of these utility assets, once installed, will be sold to ESP and the funds used to repay the credit facility.

In the industrial and commercial sector, Fulcrum secured new projects, most notably a £4.2m contract to provide 13.5km of new of high voltage electrical infrastructure for a major redevelopment project and a £1.5m contract to install 3.8km of gas infrastructure to feed Combined Heat & Power units that will serve a large manufacturing facility.

In housing, deals include £1.6m and £1.1m contracts to provide infrastructure for two big property developments, which combined will create more than 1,000 homes.

Daren Harris, CEO, said: “We responded quickly to the initial impact of the pandemic, allowing a strong recovery in Q2, with activity levels returning to pre-COVID levels.

“At the same time, we made strong progress against our strategic objectives, winning key new contracts in our core markets and selectively investing in the business to support future growth.

“We also continued to secure a variety of significant new contracts, achieving a year-on-year order book growth of 9.4%.

“Whilst COVID-19 continues to create economic uncertainty in the UK, the Group remains in a strong position.  

“First, we have financial strength, supported by a robust balance sheet, current and future cash from the sale of our domestic gas assets and associated meters to ESP.

“Second, we have a healthy and growing order book and an improved ability to compete on and secure larger schemes, and third we are supported by strong strategic tailwinds driven by the need to decarbonise the UK’s economy.”