RA International Group PLC’s shares plummeted on Wednesday, following its report that trading in 2021 had been hit hard by pandemic-related disruptions.
The Africa and Middle East-focused construction and support services provider said it expects revenue of $54 million for 2021, which would be a 16% drop year-on-year from $64.2 million in 2020. RA said it expects underlying earnings before interest, tax, depreciation and amortisation of $7 million, which would be half that of $14.2 million in 2020.
Shares in RA were down 25% to 28.60 pence each in London on Wednesday afternoon.
RA said the revenue was as expected, but it had consequently affected gross margin. Gross margin was also hit by ‘general inefficiencies’ related to Covid-19, including travel restrictions, quarantine, and supply chain delays.
The order book as of December 31 was $100 million, which reflected revenue drawdown and ongoing delays in securing new contracts and tenders. Whilst confident of eventual rewards from these projects, RA said ‘timelines are beyond [their] control’.
Year-end cash was $9 million, with a ‘modest’ net debt of $1 million.
Having identified commercial clients as particularly prone to incurring risks and delays, RA plans to work with more government clients moving forward to reduce the risk profile of clients. It also plans to diversify its geographies to mitigate operational risks.
‘This has been a frustrating period, with client and Covid-19 related operating constraints continuing to cause inefficiencies and exceptional delays in executing projects, in tender issues, awards and in project mobilisations,’ said Chief Executive Officer Soraya Narfeldt.
‘This has impacted our profitability for the last six months of 2021 and also stalled our order book momentum. However, the underlying business has remained profitable through this disruption and our solid balance sheet supports our forward looking requirements.’
Audited full-year results for 2021 are expected in late April.
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