8th August 2024

ISIN: KYG368851047

JPJ:FCRM

Fulcrum returns to profitability following major strategic turnaround

Fulcrum Utility Services Limited “Fulcrum” or the “Group”, the leading multi-utility infrastructure and services provider announces its full year results for the period ending 31 March 2024.

The Group is pleased to report growth and a return to profitability as part of its strategic turnaround, which is delivering sustainable, progressive improvements across its operating divisions.

Financial highlights

• Performance was in line with management targets
• Revenue increased 5.5% to £53.4m (2023: £50.6m)
• Adjusted EBITDA* of £(0.5)m (2023: £(6.2)m)
• Operating Profit of £0.5m (2023: Operating Loss of £24.6m)

*Adjusted EBITDA is Operating Profit excluding the impact of exceptional items, other net gains, fair value gains on derivatives, depreciation, amortisation and equity-settled share-based payment charges.

Operational highlights

The Group’s turnaround has been delivered following a comprehensive strategic review of the organisation and its four operating divisions, Dunamis, Maintech Power, Fulcrum (Multi-Utility Operations) and Fulcrum (Asset Ownership):

• A new Fulcrum Group leadership team has been embedded and senior management teams in each division were strengthened and expanded.
• The utilisation of shared services were enhanced and intercompany working opportunities across its divisions were improved.
• The Group now has a sharper focus on its core markets.
• In the year, the Company also delisted from the Alternative Investment Market (AIM), removing complexity from the business and providing cost savings. Some immediate benefit was evident in the period and additional benefits and savings will be realised in future years.

The Group’s turnaround and positive progress continues to be supported by its Major Investors, with the existing Facility Agreement amended and extended in the year. The Group is grateful for this ongoing support whilst it continues on its path of profitable growth.

Divisional overview and performance

Dunamis reports significant growth as it strengthens position in renewable energy sector

• The Group’s High Voltage (HV) connections business, Dunamis, is an Independent Connections Provider (ICP), which specialises in the design and build of HV electricity connections and infrastructure.
• Dunamis delivered exceptional growth in the period with revenue increasing by 67% to £23m (2023: £13.8m).
• The Company also achieved an Operating Profit of £289k (2023: Operating Loss of £5.3m) as it strengthened its position in thriving markets that include renewable energy, by connecting large-scale solar farms, battery energy storage sites and onshore wind projects.
• The demand for Dunamis’ expertise is also reflected in the Company’s current pipeline of quoted opportunities, which has grown to over £150m. 

Growing demand for Maintech Power’s specialist expertise delivers improved profitability

• Maintech Power is the Group’s HV electrical installation and maintenance business that supports major power infrastructure projects, such as large-scale solar farms, wind farms, battery energy storage sites and private electrical networks across the UK.
• The business has an extensive client list including EDF Renewables, the NHS, GlaxoSmithKline, and Cambridge University.
• With a revenue of £7.1m (2023: £7.5m) and an Operating Profit of £245k (2023: Operating Loss of £161k), this positive financial performance has been achieved by both internal improvements and from an increase in demand for its highly specialist expertise in high-growth markets.

Positive progress and recurring revenue opportunities for multi-utility operations and asset ownership divisions

• Fulcrum’s multi-utility operations division delivers multi-utility connections to housing developments and Industrial & Commercial schemes, nationwide.
• Commercial rigour has been a key focus in multi-utility operations, with enhanced commercial contract management and close cost control, resulting in improved contract margins.
• In the period it has supported a portfolio of projects across the UK and secured its first significant framework contracts with a Gas Distribution Network.
• The Group’s Asset Ownership division owns and operates gas and electricity networks that generate healthy and recurring revenues for the group. It consolidated its position in this financial year as it prepares for growth through future ownership opportunities. 

Outlook

The Group is delighted with the positive progress made in the year and these results provide a stronger platform for continued, sustainable growth.

The Group offers specialist services with increasing demand in markets mandated for growth, which is accelerating development, performance, and access to future opportunities. The renewable energy industry, in particular, is providing significant opportunities as the UK drives towards net-zero. This, combined with the advent of a new government with an ambitious housebuilding agenda, and the resurrection of onshore wind farm developments, presents significant and exciting opportunities for the Group.

The Group is focused on its core strengths in sectors where it is very experienced and has increased the efficiency of its central operations. This has been fundamental to the Group’s success and will be central to the delivery of its five-year strategy of growth and profitability.

Commenting on the full year results, Lindsay Austin, Fulcrum CEO, said:

The Group’s leadership team is exceptionally proud of the turnaround we’ve achieved, and the contribution made by our excellent people, that has delivered a return to profitability.

The strong, collaborative approach we have brought to the Group, with the full support of our highly engaged major shareholders, has ensured the outcomes of the strategic review were successfully implemented and have set us on a path to sustainable, progressive improvements.

We have optimised the expertise within the Group, delivered cost improvements and efficiencies through streamlined processes and allowed our divisions the autonomy to pursue and secure new relationships and build on long-term partnerships.

The Group is operating in booming, high-growth markets, offering in-demand specialist services, which is accelerating their growth and access to future opportunities.