GYG plc (LON:GYG), the market leading superyacht painting, maintenance and supply company, has announced its Interim Results for the six months ended 30 June 2021.
Financial Highlights
· Group revenue increased 28.2% to €37.3m (H120: €29.1m)
o Coatings (Refit and New Build) revenue increased 30.8% to €32.0m (H120: €24.5m)
o Supply revenue increased 16.1 % to € 5.3 m (H120: €4.6m)
· Adjusted EBITDA1 decreased 25.0% to € 1.2 m (H120: €1.6m)
· Adjusted EBITDA2 excluding Nobiskrug provision increased 25.0 % to € 2.0 m (H120: €1.6m)
· Operating loss of (€0.6m) (H120: profit of €0.1m)
· Loss before tax of (€ 1.1 m) (H120: profit before tax €0.5m)
· Net debt3 of € 14.8 m at 30 June 2021 (30 June 2020: €10.9m)
· Cash of € 0.9 m at 30 June 2021 (€3.0m at 30 June 2020)
· Bank facilities extended in March 2021. This provided greater flexibility to deal with the short-term working capital challenges presented by the Nobiskrug administration
External events
· On 9 April 2021, Harwood Capital LLP (“Harwood”), one of the Company’s major shareholders, announced that it was in the preliminary stages of evaluating a possible unsolicited offer for the Company
· On 12 April 2021, the Company was informed that Nobiskrug Shipyard GmbH had entered administration where the Company was working on two New Builds and a large Refit with a potential total exposure of €2.8 million (exclusive of VAT) in addition to the subsequent delay in expected future revenues .
o Management immediately engaged with the adminsitrators and owners of the yachts to agree terms for the works to be continued but the situation has taken much longer to resolve than initially expected, partly due to the yard’s takeover and new ownership
o An agreement in principle has now been reached with the relevant parties under which, subject to agreement of legal documentation, the Company expects to complete all three projects
o The Directors are confident that at least €2.0m of the exposure related to the Refit will be recovered before works restarts on it. A bad debt provision of €772k was recognised in the period relating to the two New Build projects but management also believes there is a realistic prospect for this to be recovered
Operational Highlights
· The current financial year started with a strong Order Book, with Q1 2021 revenues 21% ahead of the prior year and improved Q1 EBITDA margin of 10.9%
· Nobiskrug administration led to a significant loss of operational efficiency over the ensuing months as the Company needed to maintain the highly skilled labour force it had built up in anticipation of future demand
· Work continued on seven of the eight New Build contracts signed before 2021, completing two and with one more to start in H2
· Relationships solidified with the majority of key European shipyards due to the high quality service provided on the recent New Build projects. This has led to an uplift in the Group’s core Refit business expanding into these yards alongside on-going discussions for further new multi-ship New Build contracts
· Supply division’s new branding and renewed focus on direct yacht sales through Pinmar Yacht Supply delivering positive results, with yachtowners now appreciating the depth and capabilities of this division
· There remains high interest in the AkzoNobel SF Sprayable filler system which is being applied on two New Builds; the market is welcoming new technologies and innovation across the paint sector where GYG remains the pioneer in this space
Post period end
· On 28 July 2021, the Company entered into a loan agreement with Harwood for €3.0 million to provide additional working capital funding in light of Nobiskrug
· Following an audit by the Spanish tax authorities of periods prior to the Company´s IPO in 2017, the Company reached a settlement covering the periods under review and took an associated provision of €1.1 million in relation to tax and associated interest charges
· Strong momentum continued in Refit during Q3 with contracts being signed earlier in the year than usual
Order Book 4
· Strong Order Book at 22 September 2021 provides significant forward visibility
| Order Book at: | Total Order Book | Current Year | Current Year +1 | ForwardOrder Book |
| 22 September 2019 | €43.6m | €16.4m | €22.1m | €5.1m |
| 22 September 2020 | €53.8m | €20.4m | €27.8m | €5.6m |
| 22 September 2021 | €48.0m | €16.2m | €24.8m | €7.0m |
Outlook
· Coatings division expected to complete three New Build projects in H2 2021 whilst continuing work on two more, driving increased New Build revenue into 2022
· Advanced negotiations underway for multi-ship New Build contracts to commence in 2022 and 2023, attributed to the high quality work performed over the past 18 months and the maturing relationships with the key European shipyards
· The growth in New Build contracts further consolidates the Group’s position as a preferred supplier and strengthens our Refit market share as these New Builds become loyal Refit clients
· We continue to assess further organic and inorganic growth opportunities
· Despite the significant disruptions caused by Nobiskrug in H1, the underlying market remains healthy as demonstrated by the strong order book for H2 2021 and beyond
· The Superyacht industry is seeing a post-Covid boom and significant new demand is being reported by the shipyards both in New Builds and Refit work. The Group is well postioned to meet this growing demand and increase market share
(1) Adjusted EBITDA is defined as operating profit before depreciation, amortisation, impairment, performance share plan costs and exceptional items. This is an alternative performance measure used by Directors to assess the operating performance of the Group
(2) Excludes bad debt provision of €772k relating to certain invoices outstanding with Nobiskrug
(3) Net debt position is defined as the net cash and cash equivalent balances, less short and long-term borrowings and obligations under leases. This is an alternative performance measure used by investors, financial analysts, rating agencies, creditors and other parties to ascertain a company’s debt position
(4) Order Book is defined as contracted but unrecognised revenue from New Build and Refit projects. It does not include revenue already recognised during the year and it does not include any future value for revenue in the Supply division
Remy Millott, Chief Executive of GYG plc, commented:
“The Group experienced a difficult end to the first half of 2021. Q1 trading gave us confidence that we were on track for a significant inprovement in performance in the period however, unfortunately, for reasons outside of our control, external events heavily impacted Q2 and, therefore, H1 overall. As demand and our market share across the industry was increasing, we focused on retaining the majority of our highly skilled labour force. However, the issues at Nobiskrug and the associated delays to planned work schedules and revenue recognition have created unexpected and temporary inefficiencies which impacted the Group’s margins in the period and continued into the second half.
The Group’s more traditional superyacht Refit and Supply markets have remained stable during this period and the Group has experienced a rapid acceleration in contract signings for projects in Q4 2021 and into 2022. Building on our reputation for the highest operating standards and excellence in service delivery, the team continues to work on a number of potential leads on projects for delivery over the remainder of 2021 and beyond in Spain, France and Northern Europe, while maintaining the Group´s keen focus on future gross margin improvement. These projects, when signed, coupled with the robust outlook for the market, will reinforce the strength of the forward Order Book and associated revenue visibility.
Whilst it is difficult to forecast precisely the timing and impact that the potential projects could have on the current year outturn, it is now clear to the Board that, as a result of the protracted and complicated negotiations associated with the Nobiskrug administration, the associated delays in revenue and negative impact on operational efficiency, 2021 will not be the year of progress for the Group that had initially been anticipated. As a result, the Group is trading behind the Board’s previous expectations for the current year. The Board does, however, remain confident in both the medium-term to longer-term growth prospects of the Group and the scope to deliver future margin improvement.”
Chief Executive’s Statement
Overview
The current financial year started with the Group’s disciplined focus and strong momentum in 2020 continuing into the first quarter of 2021. This was the basis for a positive Q1 performance, with revenues well ahead of the same period last year and a significant improvement in Q1 margins, which has been management´s focus for some time. The strong Order Book included a good balance of New Build and Refit projects in the schedule for 2021.
On 9 April 2021 Harwood, one of the Company’s major shareholders, disclosed that it was in the preliminary stages of evaluating a possible offer for the Company for the entire issued and to be issued share capital of the Company at a price of 92.5 pence per share with an unlisted securities alternative.
As part of Harwood’s announcement of its unsolicited Possible Offer, it stated that it had received a letter of intent to accept (or procure acceptance of) or vote (or instruct the vote) in favour of the Possible Offer, if made, from GYG’s largest institutional shareholder, Lombard Odier Asset Management (Europe) Limited.
The Directors immediately commenced discussions with Harwood regarding its intentions. As part of this exercise, the Company also spoke with several other significant shareholders to gauge their response to Harwood’s approach. As a result of these discussions, the Company agreed to allow Harwood a period of due diligence so that Harwood could form a better view from which to make any firm offer under The City Code on Takeovers and Mergers.
Shortly after Harwood’s unsolicited Possible Offer, the Group’s positive operational momentum generated over Q1 was severely disrupted by the sudden administration process initiated on 12 April 2021 at the Nobiskrug shipyard in which we were part way through a large Refit project and two smaller New Builds with a total combined contract value of €14.4m.
These external events arose outside of the Group’s control and have been very time consuming and distracting for the Board and senior management team.
Harwood subsequently informed the Board that, subject to the agreement and recommendation of the Board, it would reduce the cash consideration under any firm offer made by Harwood under the Takeover Code to 70 pence per share, together with a contingent value right (“CVR”) instrument, whereby GYG shareholders could potentially receive additional value predicated, inter alia, on a future exit event occurring. The Board notes that the precise terms of such CVR instrument are still to be agreed between the parties.
Any such offer is also expected to be conditional upon, inter alia, satisfactory resolution of the Nobiskrug administration, including payment of amounts owed to the Company. The Company remains engaged in discussions with Harwood about the terms and conditions of any such offer and has provided a series of extensions to the deadlines set out under the Takeover Code to allow these discussions to reach a conclusion.
With regard to the Nobiskrug administration, further details on the financial impact of this event are set out in the Financial Review but it has led to a significant loss of operational efficiency over the ensuing months as the Group found itself with a significant proportion of its workforce suddenly without work but with the prospect of potentially restarting the three impacted projects in the yard relatively quickly.
Unusually, the Refit project was substantially larger than either of the New Builds and accounted for approximately 72% of the Group´s outstanding invoices with Nobiskrug. Management immediately engaged in discussions with the administrator and the owner of the Refit vessel about resuming work on the project. Those discussions have taken significantly longer to complete than any of the parties initially anticipated, partly because new owners for the shipyard were found during the discussions. However, we continue to have weekly dialogue with the main parties and an agreement in principle has been reached which includes the full repayment of the €2.028m historical debt relating to the Refit contract. The Board is confident that the project will restart in the coming weeks, all outstanding invoices for the Refit project will be paid ahead of the works recommencing, and that the project will be completed on broadly the same commercial terms that were originally in place.
With regard to the two New Build projects, we remain in discussions with the management company that is responsible for overseeing both projects and an agreement in principle has also been reached to complete the projects. Further details will be provided when available but the Board is optimistic about the prospect of completing both projects in H1 2022. At 30 June 2021, the less advanced nature of the commercial discussions with the management company was such that the Group took a provision of €772k in the H1 period end balance sheet for potential bad debts in relation to these two New Build projects. The Board believes, however, that there is a realistic prospect of recovery of the full amount.
Despite the impact of the Nobiskrug situation, revenue for the six months ended 30 June 2021 was €37.3m, an increase of 28.2% over the same period in 2020.
The Coatings division experienced growth across all geographies despite many yachts enjoying an extended winter season following the Covid-related disruption through 2020. The US Refit market took a little longer to recover from the pandemic but trading in the US is anticipated to return to more normal levels in H2.
The Supply division had a solid first half in line with the Board’s expectations, winning several new contracts as a result of its successful strategy to target larger yachts directly for global supply.
Notwithstanding the impact of the Nobiskrug administration, the Group continues its operational focus to deliver improved gross margins, a reduction in fixed costs and business process improvements. As a result of these initiatives, adjusted EBITDA excluding the Nobiskrug provision was up 25% to €2.0m in the period.
Coatings Division
New Build
The Group has enjoyed a significant increase in its market share of the higher value New Build sector as a result of its strategy to develop relationships directly with the leading New Build yards in Northern Europe. As a result, the Group started 2021 with seven New Build projects under way, three of which were completed. New Build revenue for the six months ended 30 June 2021 was €10.1m, an increase of 99% over the same period in 2020.
During 2021, the Group signed two new New Build contracts and is currently in advanced discussions regarding a number of others, which we believe is a direct consequence of the Group´s high quality performance on recent projects and its maturing relationships with the major Northern European shipyards. These projects are all expected to start either later in 2021 or H1 2022. Additionally, for the first time ever, the Group is in discussions with two different yards about contracts for multiple New Builds under single agreements. The Group’s focus on improving its leading industry reputation and pioneering position in the New Build sector has been recognised and is continuing to grow, providing numerous opportunities for the Group.
The Board is confident that there is plenty of headroom for continued growth both within the yards that the Group currently serves and through developing further new relationships with other leading shipyards. The strong future Order Book highlights the significance of these higher margin New Build shipyard relationships to provide greater visibility over forward revenues and will enable further efficiency. The growth in the Group’s market share of the New Build sector will contribute directly to strengthen the Refit pipeline.
Refit
The strong sales momentum experienced in Refit during 2020 continued into 2021. The major Refit project in Nobiskrug was expected to bolster revenue and margins during the summer months, which tends to be a quieter period for Refits due to normal Mediterranean cruising patterns. The entry into administration of Nobiskrug in April effectively delayed the remainder of that revenue until H2 2021 and Q1 2022.
Despite this, Refit revenue for the six months ended 30 June 2021 was €22.0m, an increase of 13% over H1 2020.
Post the period end, the Group has experienced a high level of Refit contract wins for H2 2021 and H1 2022 which gives the Board confidence that there is still room for substantial growth within the Refit segment of the market in terms of both contract value and number of Refits as the fleet continues to grow. La Ciotat Shipyard in France is nearing completion of its new 4,000 ton syncrolift, which will make it one of the most renowned refit shipyards in our industry and the Group, as a preferred supplier, is well placed to satisfy this new capacity as a result of our investment and development. The Board expects that this will be one of the Group’s fastest growing refit hubs over the next 12 months.
Supply Division
During 2020, the Supply division rolled out its new branding across all platforms following the realignment of its growth strategy. This exercise showed positive results as revenues in the period grew to €5.3m, an increase of 16.1% over the previous year. Historically, the Supply division was renowed for its B2B distribution agreements which were driven by the core refit business. However, as the number of superyachts increase along with the demand to supply them, the Supply division has repositioned itself as a Yacht Supply Company with positive results and feedback. Yacht owners are beginning to understand that, with the depth of knowledge, experience and skills of its dedicated staff, Pinmar Yacht Supply can meet all their supply requirements. This will lead to strong growth in this division for the Group.
We have also recently agreed terms with a supply company in La Ciotat to be a Premium Retail Partner. Under this arrangement, we provide a high volume of goods on mutually acceptable terms using our branding in a new facility in the expanding shipyard. This allows strong growth without the Group having to carry additional staff and overheads.
We remain optimistic about the prospects for this division in the second half and beyond as we strive for commercial improvement and delivering value to our customers by focusing on the servicing of superyachts’ purchasing requirements.
Operational Review
GYG provides a highly skilled, mission critical service as part of the construction and refit of superyachts. The Group is well-positioned to benefit from strong structural growth drivers in the premium end (50m +) of the sector, which is our key focus and the fastest growing segment of the market. The implementation of process and system improvements during 2019 and 2020 provided a solid foundation to deliver further operational improvements in 2021, as evidenced by our improved underlying EBITDA contribution in the period.
Greater visibility in the Order Book and rigourous monitoring of manpower and asset utilisation rates improved the Group’s underlying trading performance during the period. The Board expects to see the benefits of these programmes to continue over the remainder of 2021 and in to 2022.
The Group continues to innovate and invest in new application technology and training, leveraging its strong relationship with all the main superyacht paint manufacturers. The collaboration project with AkzoNobel to develop and bring to market an application methodology for its new sprayable filler product is well underway, with early data showing positive reductions in the time taken to fill and fair a large superyacht compared to the traditional manual methods. We intend to disclose the full results when the projects are completed, with management confident that this new filler system, which maximises the speed and efficiency of the application process, will be extremely attractive for shipyards and will help to further differentiate the Group’s New Build proposition.
GYG continues to develop its human resources function through a combination of structured in-house training programmes and strategic recruitment. We continue to strengthen the management team introducing a mix of industry experience and related business expertise, with a focus in H1 to build our project management team in readiness for our increased levels of forecasted activity.
We continue to work on a programme of system developments to automate business processes, consolidate legacy systems and provide better management information leading to improvements in operational planning and control. The significant upgrade of our core IT infrastructure which started in 2020 is progressing to plan and expected to be completed in Q1 2022.
We have successfully adapted our operational model in response to the lessons learnt during the COVID-19 pandemic and continue our ongoing programmes to improve our business processes, systems and infrastructure to support growth and increase the efficiency of the Group.
Market Developments
The overall superyacht market has not only recovered from the downturn caused by the COVID-19 pandemic, but in fact appears to be in a period of strong growth. Sales of superyachts are going from strength to strength in both the new and used yacht markets with demand outstripping supply in certain situations according to the latest market report from Superyacht Times1.
With the disrupted projects carried over from 2020, the Orderbooks of the leading New Build shipyards are nearly full leading to increased build times for new purchases, which has in turn led to a surge in used yacht sales as new owners want to take to the seas as soon as possible.
The alignment of the superyacht market with the wealth of the UHNWI population continues to be apparent. Owners from the United States have the largest share of the existing superyacht fleet, currently standing at 23%1. According to Forbes2, the total American billionaire wealth stood at $4.6 trillion at the end of April 2021. That is an increase of 35% from $3.4 trillion when markets opened on January 1, 2020, just as Covid-19 was beginning to take hold.
The Refit market appears strong with a mix of projects taking place during H1. There were the delayed Refits initially due to engage during H2 2020 alongside the traditional scheduled works during the early months of the year in Europe in preparation for summer cruising. Some owners are also looking to extend the use of their vessels and have scheduled their major Refit work after the summer season and into H2 2021.
The demand for ever increasing support facilities to service the growing superyacht fleet, both in terms of overall fleet size and the growth in larger yachts within the fleet, continues to drive improvements in shipyard infrastructure. ‘Project Atlas’ currently underway at the La Ciotat Shipyard in France will bring online a 40,000m2 refit platform including a 4,300GT shiplift in 2022 which can cater for yachts up to 115m in length.
We remain positive that the New Build and Refit markets that we serve will deliver an improved performance in 2021 against 2020 as the global situation normalises and returns to the stable growth seen across the previous decades.
1. Source – Monaco Yacht Show Market Report 2021 by Superyacht Times, September 2021
2. Source – https://www.forbes.com/sites/chasewithorn/2021/04/30/american-billionaires-have-gotten-12-trillion-richer-during-the-pandemic/
Financial performance
Revenue for the six-month period to 30 June 2021 increased 28.2% to €37.3m (H120: €29.1m). The higher revenue can be attributed to a strong Order Book built up over the course of 2020, significantly less COVID related impact during 2021 and some project delays that pushed revenue from H2 2020 into H1 2021.
Owners of superyachts typically undertake an annual haul out and general maintenance in the off-season to keep the vessels in optimum condition and to ensure availability during the peak cruising months. This has historically introduced a level of seasonality to the Company’s revenue with an H2 weighting to the key Refit revenues. Management still expects the usual H2 weighting of activity in the Refit sector to continue to benefit the Group in the second half of 2021 albeit with some disruption as a result of the aforementioned Nobiskrug administration.
The higher revenues during the period did not translate into higher operating profits or margins as adjusted EBITDA decreased by 25.0% to €1.2m in the period (H120: €1.6m). This translates into an adjusted EBITDA margin of 3.3% for the period (H120: 5.6%).
The principal cause of the drop in profitability can be attributed almost exclusively to the impact of the Nobiskrug administration. If the impact of the provision taken against outstanding invoices related to Nobiskrug is excluded, Adjusted EBITDA increased to €2.0 million, giving an adjusted EBITDA margin of 5.3%, marginally below the 5.6% reported in the prior year. The delay of revenue associated with the three Nobiskrug projects which was scheduled to take place led to significant losses in operational efficiency. Without this impact, management is confident that the adjusted EBITDA margin for the period would have been higher than the 5.6% reported in 2020, as seen in Q1 2021.
The €8.9m increase in operating costs (not including exceptional items, performance share plan costs, depreciation and amortisation) represents an increase of 30.7% on H1 2020 but is tied directly to increased revenue and the aforementioned issues around Nobiskrug. The operating loss for H1 of €0.6m reflects the points made earlier about reduced operating efficiency (H120: profit of €0.1m).
Net finance costs of €0.5m were slightly lower than the previous period (H120: €0.6m).
Following an audit by the Spanish tax authorities for periods prior to the Company’s IPO in 2017, the Company reached a settlement covering the periods under review and took an associated provision of €1.1m during H1 2021. This is materially higher than the charge for the same period in 2020 which was €0.0m. As a result of this, the loss after tax of €1.8m (H120: loss of €0.4m) was significantly higher than the same period in 2020.
Financial Position
As stated in our 2020 Final Results on 26 April 2021, the Group reached an agreement with its banks in March 2021 to change the repayment terms of one of its loans, a bullet loan, to extend the payment dates. The entire loan of €4.0 million was due to be repaid in March 2021 but, under the terms of the new agreement, the loan will be repaid in four equal tranches of €1.0 million starting on 30 June 2021 followed by December 2021, June 2022 and December 2022. The first payment was made on 30 June 2021. The Group´s banks remain supportive.
Net debt at 30 June 2021 was €14.8m (H120: €10.9m) reflecting increased reliance on the Group´s working capital facilities following the administration of Nobiskrug.
See note 9 of the Financial Statements for more details on borrowings.
The administration at Nobiskrug had a material, detrimental short term effect on the Group´s working capital position. Not only did the Group not receive payment for the outstanding amounts due, €2.8 million (net of VAT), but there was also a subsequent delay of revenue that had been expected while the three Nobiskrug projects remained suspended. This exacerbated the normal seasonal trading profile of the business.
To ensure sufficient liquidity to avoid a working capital shortfall, Harwood extended a loan of €3.0 million to the Group, repayable by 31 December 2021. The loan facility was fully drawn on 28 July 2021.
Based on the Group´s most recent financial forecasts, which include assumptions around contract wins, the timing of revenues, the margins achievable on projects, and a successful resolution to the Nobiskrug situation, the Board believes that the Group can generate sufficient working capital to meet its working capital requirements and repay its borrowings as they fall do. As a result, the Board does not believe that it will need to seek additional funding from shareholders in the foreseeable future to maintain operations or to meet its obligations.
Dividend Policy
The Board is encouraged by the positive momentum prior to the disruption described above and has a firm intention to reinstate the progressive dividend policy at the earliest appropriate opportunity.
Environmental Issues and Climate Change
Understanding and managing the environmental impact of our operations across all of our locations is an important part of being a responsible stakeholder in our local communities. It is also strategically important for building resilience into our business. We have a team dedicated to monitoring this across the Group and look to mitigate the environmental impact of our activities.
The Board is also cognisant of the potential impact of climate change. While the ultimate impacts on society and the economy are unclear at this point, it does not believe that climate change will have a material impact on the Group in the short to medium term. Management are also encouraged by developments within the yachting industry as it looks to reduce its impact on the climate through new technologies and better operating practices. The Group is leading the industry with pioneering technologies in the paint application process to reduce its environmental impact.
COVID-19
The Group responded quickly and effectively to mitigate the impacts of COVID-19 during 2020 and saw a positive client response. While the Group is still experiencing additional costs, administrative burdens and some travel restrictions as a result of the pandemic, the Board does not believe that the pandemic will have a material impact on its financial performance assuming current conditions of the pandemic either prevail or improve.
Brexit
In an already volatile year, the Board is pleased to announce that Brexit has not had a material impact on the Group or its operations. The Group has experienced some minor supply chain issues and additional administrative work in relation to moving workers in and out of the UK post Brexit but the Board does not believe that these will have any noticeable impact on the Group´s future prospects.
Outlook
For reasons explained elsewhere, the Group experienced a difficult end to the first half of 2021. The second half also started more slowly than expected due to the delays in restarting work at Nobiskrug and associated deferral of forecast revenue whilst this matter is resolved.
The Group’s more traditional superyacht Refit and Supply markets have remained stable during this period and the Group has experienced a rapid acceleration in contract signings for projects in Q4 2021 and into 2022. This has resulted in a strong Order Book for the Group providing a degree of underpinning to future revenues, as detailed below:
| Order Book at: | Total Order Book | Current Year | Current Year +1 | ForwardOrder Book |
| 22 September 2019 | €43.6m | €16.4m | €22.1m | €5.1m |
| 22 September 2020 | €53.8m | €20.4m | €27.8m | €5.6m |
| 22 September 2021 | €48.0m | €16.2m | €24.8m | €7.0m |
The team continues to work on a number of potential leads on projects for delivery over the remainder of 2021 and beyond while maintaining the Group’s keen focus on enhancing gross margin. These projects are not reflected in the table above and, if and when confirmed as firm orders, would reinforce further the strength of the forward order book.
Whilst it is difficult to forecast precisely the timing and impact that the potential projects could have on the current year outturn, it is now clear to the Board that, as a result of the protracted and complicated negotiations associated with the Nobiskrug administration, the associated delays in revenue and negative impact on operational efficiency, 2021 will not be the year of progress for the Group that had initially been anticipated. As a result, the Group is trading behind the Board’s previous expectations for the current year. The Board does, however, remain confident in both the medium-term to longer-term growth prospects of GYG and the scope to deliver future margin improvement.
