GYG pushes expectations into next year after job delays

Superyacht painting, supply and maintenance company GYG has experienced a number of small delays on the start dates of some refit contracts, it announced in a trading update on Tuesday, adding that while work on those contracts has now started, a greater portion of the work would now be undertaken in the first quarter of 2018.

The AIM-traded firm said that as a result, the level of revenue deferred was in the range of €3.3m to €4.9m, with an associated reduction in adjusted EBITDA of between €0.67m and €1.0m.

It said the two hurricanes that hit the US and Caribbean in the third quarter were a factor, resulting in disrupted cruising patterns and owners extending their Mediterranean season while they assessed the facilities in the Caribbean cruising grounds.

“During this period decisions relating to refit programmes were delayed and this will result in a lower than expected revenue in the group's refit businesses,” the board explained in its statement.

Additionally, it said a “substantial contract” that was scheduled to start in late September had been delayed due to the vessel not arriving in dock until the middle of November.

“Therefore a substantial proportion of this revenue will not be recognised before 2018.”

However, the company’s management said it was “particularly pleased” with the performance in the group's Technocraft division, which fits scaffolding on and around vessels ahead of refit work being undertaken.

The business was experiencing its busiest ever quarter with record fourth quarter revenue up 66% to date, reflecting the shift in contracted work into the fourth quarter and early 2018.

“As a result of the above factors impacting refit, management expects to report revenue and group profit below expectations,” the board confirmed.

Allowing for the lower range, revenue was now expected to be at least €61.0m, up 12% on 2016, and EBITDA at least €7.08m, up 6% on 2016.

“Importantly, none of the group's contracts have been cancelled and, therefore, the scheduled work will be undertaken in 2018 with the company expected to go into 2018 with its highest ever level of in-year order book.”

GYG’s current order book stood at €18.1m - up 37% on the same date in 2016.

“The board therefore remains confident in the group's expectations for 2018.”