Crestchic Plc (LON:LOAD), the power reliability company, today issued the following pre-close trading update, ahead of its interim results which will be announced on 29 September 2022.
Trading Update
In the trading update issued at the time of the AGM on 9 June 2022, the Company confirmed that the strong trading seen during the first quarter had accelerated in the second quarter and that the pipelines for both hire and sales were sufficiently robust for the Board to increase further the Group’s outlook for the current year as a whole.
Since then, trading momentum has again accelerated. The Group has benefitted from extensions to ongoing rental projects in various locations across the world, has secured its largest ever hire contract, which will benefit both the second half of 2022 and the first quarter of 2023, and has enjoyed a record level of sales orders, the majority of which will be fulfilled in 2023.
This record contract win, in addition to the strength of ongoing trading, has again led the Board to significantly increase its profit expectations for the year as a whole. This trading update marks the third increase in expectations the Group has announced in 2022.
Moreover, since a significant proportion of the work secured over the past two months will continue into next year, the Board is increasingly confident that the growth achieved this year represents a sustainable step change in the underlying performance of the Group. Additionally, the expanded factory capacity along with the new depots in Texas and Antwerp will underpin the key strategy of growing hire and sales revenue around the world, particularly, in North America and Europe.
All market sectors continue to perform strongly. The Group is continuing to invest in and benefit from servicing the high levels of data centre activity globally and, even more than anticipated, activity in the oil and gas exploration sector, particularly in the Middle East and Asia, has grown substantially as national energy strategies respond to high levels of political uncertainty and the related dramatic increases in fossil fuel prices. Equipment utilisation is at an all-time high and Crestchic’s ability to manage the hire fleet and redeploy it on a global basis has been a critical factor in enabling the Company to win major international hire projects.
Inflation and supply chain challenges remain and will constrain to some extent the pace at which the Group can invest in the hire fleet to meet demand, but the Group has responded by accelerating the purchasing and refurbishment of used equipment, which has proven to be quick and cost effective as well as environmentally responsible. The Group is working closely with its customers to enable input cost increases to be sensitively passed on while maintaining our margins on equipment sales.
We remain very confident in our strategy, the strength of our markets and our prospects for continued growth.
Tasman disposal
The Crestchic Board also announced that contracts have now been agreed for the sale of the Tasman business in the Middle East and a deposit has been received from the purchaser. The transaction is expected to be completed imminently once local regulatory approvals have been received. The provisions made in the 2021 final results, when the assets of Tasman were transferred to held for sale, are sufficient to ensure that no related exceptional costs will be required in 2022.
