GYG, the superyacht painting, supply and maintenance company, has provided its trading update for the year ending 31 December 2018. The board reports that the group’s trading performance in the last two months of the year, since the trading update announced on 31 October 2018, has improved. As a result, GYG now expects to report revenue for the year ending 31 December 2018 marginally ahead of current market expectations. Revenue is expected to be no less than €44.5m resulting in an Adjusted EBITDA loss of no more than €0.95m.
“Despite 2018 being a very difficult year for the group and the wider market, we have made significant progress internally, through Q4 2018, to improve the business and how we operate,” comments Remy Millott, CEO of GYG. “The changes we have put in place allow us to track operations on a more granular level and provide greater visibility on revenues, gross margins, sales and pipeline. The system also ensures management can address any important issues much earlier than we have been able to do in the past. This will enable the team to spend more time with key clients while focusing on winning business from both new and existing customers.”
By GYG’s own admission, 2018 was a disappointing year for the business. However, GYG was certainly not alone in this, with a number of businesses underperforming in 2018. Most notably, the refit sector in France was hit heavily due to the now-resolved issues relating to French social security payments.
GYG’s total order book on 21 January 2019 of €33.9m is 61 per cent ahead of the same point in the previous year (21 January 2018: €21m). The order book for 2019 is currently €25.3m, representing a 54 per cent year-on-year. See below for the order book breakdown.
“In 2018 it felt like there were a lot of non-yachting factors that were influencing owners,” continues Millott. “To name a few, there has been issues with trade wars, Brexit, sanctions and much in between. However, in a global market it is hard to pinpoint where exactly the blame lies, most likely it was a combination of all these factors. However, I must say, by the end of Q4 the light was back on in the room and the owners were starting to book refits that had been pushed back, as well as a number of owners confirming refits for 2019. We booked a couple of big deals in December to begin in Q1 and Q2, which is incredibly encouraging. We’ve got a really strong order book going into 2019 and it definitely feels like we’ve turned a corner.”
The increase in order book activity has greatly improved the two-year forward visibility and is, in the large part, due to the new built strategy the group has been focussing on through 2018 and 2019. In October 2017, Millott explained to SuperyachtNews that the central tenet of GYG’s long-term growth was to increase its presence in the new build market, a strategy that is clearly now paying dividends. GYG’s strong order book position has been predicated on new build contracts that are spread throughout the year in order to counter balance refit’s seasonality.
"...we are now very engaged with a lot of new build yards and we are soon to have some brilliant projects come online."
“I am very pleased with our order book and what is coming online. Our strategy of going after the new build industry did take longer than we had expected, but it was never likely to be a quick fix. Shipyards are going to need to change their business plan with regards to subcontractors in our field, in order to deal with capacity and quality. That being said, we are now very engaged with a lot of new build yards and we are soon to have some brilliant projects come online.”
Further details of the order book will be provided when GYG releases the group’s final result for the year ending 31 December 2018, in April.
If you like reading our Editors' premium quality journalism on SuperyachtNews.com, you'll love their amazing and insightful opinions and comments in The Superyacht Report. If you’ve never read it, click here to request a sample copy - it's 'A Report Worth Reading'. If you know how good it is, click here to subscribe - it's 'A Report Worth Paying For'.