GYG PLC Trading Update

GYG Plc (LON:GYG) has released a trading update, which highlights a number of delays to its Refit contracts stemming from hurricane activity in the US and Caribbean as well as a further delay to a substantial contract. We are downgrading our 2017 forecasts to reflect this timing, and conservatively leave our 2018 forecasts unchanged for now (implying 50% growth from 2017 outturn).

Trading update: GYG has given a trading update this morning, which has highlighted it has experienced several delays on the start dates of some of its refit contracts resulting from the two hurricanes that hit the US and Caribbean in Q3 (a large proportion of mega yachts go to St Barts and St Martin who were both hit extremely hard). This is a timing issue rather than contracts being lost or cancelled. In addition, a substantial contract scheduled to start in September has also been delayed due to the vessel not arriving in dock until the middle of November.

Key performance drivers: The contract delays occurred exclusively within the Refit division. The impact of the hurricanes has disrupted cruising patterns with owners extending their Mediterranean season while facilities were assessed in the Caribbean, hence decisions relating to refit programmes were delayed. The “substantial” contract was also a Refit contract, with the majority of revenue now not being recognised until December and into Q1 2018. Elsewhere, the New Build division has performed in line with expectations, which should be a useful pre-cursor for future market growth. The Technocraft division, which fits scaffolding on and around vessels has also performed with record Q4 revenue +66% YOY, reflecting the shift in contracted work into Q4 and early 2018. Savannah was not impacted by the hurricane activity.

Forecasts: We are downgrading our 2017E forecasts to reflect the timing of these Refit contracts, which generate gross margins in excess of 30% and therefore has a disproportionate impact on profitability. We are now assuming revenues of €61.0m (-8% vs. previous forecasts) with adjusted EBITDA of €7.1m (-12% vs. previous forecasts). We have also tweaked up our depreciation number by €0.2m to reflect the increased activity levels in Technocraft, which involves the hiring of equipment. The upshot is a 17% cut to 2017E EPS. We are maintaining our 2018E forecasts at this juncture, which should prove very conservative given this timing impact on Refit contracts.

Zeus Investment view: While the downgrade to 2017E EPS is disappointing, we believe the Group is well positioned with superyacht numbers at their highest ever levels and growing, with the order book dynamics firmly intact. The dividend yield in excess of 5% from 2018E should also offer some support in our view.

Click to view all articles for the EPIC:
Or click to view the full company profile:
Facebook
Twitter
LinkedIn
GYG Plc

More articles like this

GYG plc

The Superyacht Refit Report

The Superyacht Refit Report arrives in timely fashion, with refit yards in both the North and South of Europe reporting a full house for the season. This issue is a must-read for stakeholders looking for real,

GYG plc

Reducing its environmental footprint

Paint and application remain one of the most fraught elements of any superyacht build and yet, to a certain extent, it also remains one of the most archaic and wasteful. With the adoption of new technologies

GYG plc

Expert insight into the rise of the East Med superyacht scene

In recent years, the landscape of superyacht ownership and chartering has witnessed a radical revolution. We heard from Christina Economou, Business Development Director at Trident Trust Cyprus, on how various factors – both new and old

GYG plc

Superyacht Forum Live Tour: Monaco Yacht Show

Episode One of The Superyacht Forum Live Tour is out now! Starting in Monaco The Superyacht Forum Live Tour will travel all over the world, visiting different locations, sectors, businesses and individuals to engage in interesting

GYG plc

Pinmar Yacht Supply introduces first premium retail partner

Pinmar Yacht Supply, the international superyacht supply company, is delighted to announce the launch of its first Premium Retail Partner in collaboration with Yachting Spirit, based in the new Yachting Village at La Ciotat Shipyard. A

GYG plc

The official Monaco Yacht Show 2021 promotional trailer

In partnership with the Monaco Yacht Show, Superyachts.com brings you the official MYS 2021 promotional trailer. Produced and edited in-house by Superyachts.com, we highlight all of the myriad activities and experiences visitors to the docks of

GYG plc

Everything you need to know about chartering a superyacht

What’s the traditional duration for chartering a superyacht? One to two weeks is the most common length of time. However, any length is possible, so it really depends on what you’re looking for. Brokers scour the market

GYG plc

What should the superyacht industry look like in 2030?

The Superyacht Forum Live returns with a bang to the RAI Amsterdam from 15-17 November with a new mission statement – Superyacht 2030. In line with the UN’s Sustainable Development Goals and the requirements of the

GYG plc

Join Pinmar at the Monaco Yacht Show 2021

The Pinmar team will be returning to the Monaco Yacht Show this year, once again based at the Yacht Club de Monaco hosting meetings at the Pinmar Lounge & office and lunches every day at the

GYG plc

How to work on a yacht like Below Deck

TV series Below Deck follows the lives of crew members as they work on board a superyacht.  The show offers a glimpse into the often secretive world of yachting and has brought the idea of having

GYG plc

Superyacht sales are booming

It looks like things are going great in the yachting industry, particularly when it comes to superyachts. No worries there, because sales are skyrocketing, and owners from the U.S. are at the top of the list.