TP Group reports interim loss despite nearly doubling revenue

Specialist services and engineering firm TP Group announced on Tuesday that despite increasing revenue 45% in the six months leading to 30 June it had been unable to translate the improved sales performance into profits.

TP Group said it had increased revenue from £9.4m in 2016 to £13.6m a year later as two major contracts with the Ministry of Defence added further long-term stability to its revenue stream.

The group's order book was more than double what it was at the time of its previous interim report, soaring from £13.4m to £30.8m, and thankfully for TP Group that expanding order book guided EBITDA to a £800,000 year-on-year improvement from the previous year's breakeven point.

However, the group failed to capitalise on the aforementioned successes posting an - albeit improved - operating loss of £300,000 against the £800,000 it had reported twelve months earlier.

After having acquired and integrated ALS Technologies and Flexible Software Solutions, TP watched its cash balance drop from £9.2m at 30 June 2016 to £6.7m.

At the end of the reporting period, TPG successfully raised £20.8m via an equity issue to fund further acquisitions and investments.

Chief executive, Phil Cartmell said, "We were delighted with the success of our fundraising in July that raised £20.8m net of expenses. We are actively pursuing a number of opportunities that, if successfully concluded, are expected to be accretive to earnings. The board remains focused on completing the first of these transactions in the second half of this year."

A basic loss per share of 0.07p was reported, a marked improvement on the 0.20 it posted a year earlier and only slightly worse off than the 0.05p it announced on 31 December.

Cartmell concluded by saying, "Having continued this progress into the second half of the year, the Board is confident that the transformed business of TPG will deliver profit at the adjusted EBITDA level in line with market expectations for 2017 and move onward to sustainable profitability."

As of 1525 BST, shares had slipped 5.45% to 6.50p.