Half-year results
Entech is reporting €12.8m of half-year revenues at 30 September 2022, up +55%. The half-year results are negative, reflecting the structuring initiatives rolled out from the start of the year to prepare for strong growth across the three business segments over the full year. EBITDA therefore shows a €(528)k loss, representing 4.1% of revenues. As last year, these results do not reflect the profitability for the full year, with the outlook for profitable growth in the second half of the year confirmed by a sizeable order book.
“Our first-half results, in line with expectations, reflect the very strong growth momentum and the success of our recruitment plan. Entech is structured to achieve a new record level of activity in the second half of the year and continue growing in line with the ambitions that we set out last year at the time of our IPO”, confirms Christopher Franquet, Entech’s Chairman and CEO.
Growth across all business segments, winning contracts for increasingly large-scale projects
The revenue growth benefited all business segments, with +68% for storage (€6.6m) and +41% for production (€5.9m). The hydrogen business has also continued to ramp up.
The projects delivered during the first half of the year, including the 8 MW battery storage system delivered for Neoen, confirm the development of the business on increasingly large projects
Results: human investments for growth
Despite a context of continued supply chain pressures, the gross margin rate is up slightly from 27.1% for the first half of the previous year to 27.9%. After factoring in other purchases and external expenses, which are growing less quickly than revenues, the value added shows strong growth, up +66% to €2.4m, compared with €1.5m one year earlier.
The contraction in EBITDA, to -€0.53m compared with -€0.25m, reflects, as expected, the increase in payroll from €1.7m to €3.0m (+74%). The increase in the average headcount over the period, over a rolling six-month period, climbing from 64 to 90 people in one year, focused primarily on management staff (up from 34 to 54 FTEs). The increase in the average rate of social charges (39.2% vs 24.6%) is linked to the gradual phasing out of the entitlement to the exemption from employer contributions for “innovative young companies”.
Following €0.4m of depreciation and provisions and -€40k of financial income and expenses, income from ordinary operations came to -€957k, with an operating margin of -7.5%, comparable with the first half of the previous year (-7.3%).
After -€43k of non-recurring income and expenses and €152k of provisions for research tax credits, net income totalled -€849k.
€13.7m of available cash
At 30 September 2022, Entech is reporting a healthy financial position, with shareholders’ equity up to €29.0m following the conversion in April of the convertible bonds subscribed in September 2021 by Epopée Gestion for €3m, as well as €13.7m of available cash.
The strong growth in business is reflected in a €3.5m increase in working capital requirements, linked primarily to trade receivables. Thanks to the conversion of the bonds for €3m and the net repayments of bank borrowings for €0.3m, financial debt was reduced from €10.5m at 31 March 2022 to €7.2m at 30 September 2022.
Outlook: sustained growth
The high pace of deliveries during the second half of the year is in line with the schedules and Entech expects positive results for the half-year period underway.
With an order book that continues to be very robust, a high level of client satisfaction and strong growth in the pipeline of client projects, the company is able to confirm its medium-term objectives for 2025 (year ending 31 March 2026), with revenues of around €130m and an EBITDA margin of around 20%.
- The Half-Year Financial Report at 30 September 2022 will be published and registered with Euronext on 16 December 2022. It will also be available on the company’s website.
- Next date: Full-year revenues at 31 March 2023 on 30 May 2023.
