Fulcrum responds to pandemic with strong Q2 performance and strategic investments for growth
3 Dec 2020
Fulcrum, the leading independent multi-utility infrastructure and services provider, has successfully responded to the COVID-19 pandemic by maintaining revenues and increasing its order book in the first half of its current financial year.
The Sheffield-based national company, which is focused on delivering infrastructure for the UK’s net-zero future, confirmed its progress in its interim results for the six months ending 30 September 2020.
In this period, and despite the impact of COVID-19, Fulcrum achieved revenues of £19.5 million, matching levels for the corresponding six months in 2019. In addition, its order book has grown to £68.5 million, increasing by 9.4% from £62.6 million.
Its adjusted EBITDA records a loss of £1m, reflecting the impact of COVID-19, combined with the investments made by the business in the period for strategic growth.
During the period, Fulcrum has maintained its focus on retaining a strong balance sheet and healthy cash flow, balanced with its strategic investment activity.
Supporting this strategy was the second asset transfer to E.S. Pipelines Ltd (ESP), which completed on 30 November 2020 and generated cash of £4.7 million. This follows on from an additional £0.4m in cash received relating to the first tranche of the asset sale, which was generated when Fulcrum achieved an enhanced payment milestone in the agreement, following a strong series of new housing contract wins.
To fund the future acquisition of utility assets, Fulcrum entered into a new two-year £10 million Revolving Credit Facility on 1 December 2020. The majority of these utility assets, once installed, will be sold to ESP and the funds used to repay the credit facility.
Following the initial impact of the pandemic on the UK economy, Fulcrum recovered quickly and remained operational throughout the national lockdown, which led to its activities returning to pre-COVID levels in Q2.
It has also secured several key contracts in the industrial and commercial, housing, and smart metering sectors.
In the industrial and commercial sector, Fulcrum secured a number of new projects, most notably a £4.2 million contract to provide 13.5km of new of high voltage electrical infrastructure for a major redevelopment project and a £1.5 million contract to install 3.8km of gas infrastructure to feed Combined Heat & Power units that will serve a large manufacturing facility.
In the housing sector, these include £1.6 million and £1.1 million contracts to provide multi-utility infrastructure to two major housing developments, which combined will create more than 1,000 new homes.
As part of Fulcrum’s commitment to support the UK’s journey to net zero, it has continued to invest in its Electric Vehicle (EV) charging infrastructure operation, expanding its team and winning a number of projects across the country, including contracts for two national UK retailers, fleet charging facilities for a logistics organisation and infrastructure for a major EV charging hub development.
Fulcrum also continues to grow its smart metering service, helping energy suppliers deliver on their metering exchange obligations. In the period, the Group secured six new agreements with energy suppliers.
It has also built relationships with hydrogen industry stakeholders, leveraging on its existing gas sector expertise to offer infrastructure solutions for hydrogen networks.
Daren Harris, Fulcrum CEO, said: “We responded quickly to the initial impact of the COVID-19 pandemic, allowing a strong recovery in Q2, with activity levels returning to pre-COVID levels. The business and its people have performed incredibly well, with agility and resilience and I am proud of the recovery we have achieved, together.
At the same time, we made strong progress against our strategic objectives, winning key new contracts in our core markets and selectively investing in the business to support our future growth. We also continued to secure a variety of significant new contracts, achieving a year-on-year order book growth of 9.4%.
Whilst COVID-19 continues to create economic uncertainty in the UK, Fulcrum remains in a strong position. First, we have financial strength, supported by a robust balance sheet along with current and future cash from the sale of our domestic gas assets and associated meters to ESP.
“Second, we have a healthy and growing order book and an improved ability to compete on and secure larger schemes, and third we are supported by strong strategic tailwinds driven by the need to decarbonise the UK’s economy.
The Board is very pleased with the progress made in the period. We are encouraged by the various and significant opportunities that a net-zero future presents for long-term growth and are confident Fulcrum is well positioned to capitalise on this.”