Thalassa Holdings Limited 2016 Trading Update and 2017 Outlook (7731U)
January 23 2017 - 1:00AM
UK Regulatory
TIDMTHAL
RNS Number : 7731U
Thalassa Holdings Limited
23 January 2017
Thalassa Holdings Ltd
(Reuters: THAL.L, Bloomberg: THAL:LN)
("Thalassa", "the Company" or "the Group")
2016 Trading Update and 2017 outlook
The Board of Thalassa announces that it expects profit for the
year ended 31 December 2016 to exceed market expectations. It
estimates that Thalassa Group will report revenue of approximately
$14.0 million and profit before tax (excluding consolidation of the
holding in The Local Shopping REIT plc using the equity method) of
approximately $2.2 million. 2016 year-end cash position is
estimated at $7.7 million.
The above-expectation performance is primarily due to the
partial release of contingencies, which are no longer necessary,
and non-operating gains from currency and commodity hedging of in
excess of $1 million. In addition, the Group still has a Self
Insured Reserve (which covers any eventual excess payment due on
insurance claims) of $250,000 and a further reserve in the region
of $500,000 to cover maintenance, refurbishment and upgrades to
fixed assets. The exact amount of such further expenditure will not
be known until closer to the date of the first mobilisations in
2017 and may result in reserves being released to profit.
The Board expects to announce the results for the year ended 31
December 2016 during week commencing 10 April 2017, subject to
timely completion of the audit.
Duncan Soukup, Chairman of Thalassa, commented: "Given
conditions in the industry at the beginning of 2016, the Board is
extremely pleased to be able to announce successful operational and
financial results for 2016, which may increase further following
the conclusion of our review of reserves. As result of which, the
Board has resolved to replace the current stock buy back programme,
once completed, under which the Company has bought back a total of
3,108,657 of its own shares since February 2015 at a cost of
GBP1,343,257.80, with a new plan to repurchase up to GBP2 million
of the Company's shares.
"The Board's current view for 2017 is one of cautious (but
unpredictable) optimism. The price of oil has recovered to current
levels of ca. $52 (WTI) and riding the coattails of the largest
reflationary intervention in the history of mankind, global
economic activity is improving...slowly. However, the global
recovery is not convincing as it is not associated with
substantially higher employment. In fact, given how far behind the
curve the Central Banks of the USA, UK and Germany are, the current
recovery looks to us to be far weaker than meets the eye. This
worries us significantly as it could result in one of two
scenarios, neither of which would be good for sustained, long-term
economic growth. The first alternative is that Central Bankers
ignore the bond markets and leave interest rates at historic lows
for too long; the result would be a bout of short term, high(er)
inflation followed by excessive tightening which could derail the
current recovery. The second alternative is that Central Bankers
tighten too quickly and cut the recovery off before it is firmly
established.
"Given the recent US Presidential and Brexit results, which some
would refer to as the rise of "Populism", upcoming elections in
France and Germany, continued economic problems in Greece and
Italy, and potentially heightened political tension between the
Trump Administration and China, or should I say the USA and every
other country in the World, 2017 is shaping up to be even more
unpredictable than 2016.
"Holding one's breath and jumping is not a prudent economic or
business model which is why the THAL Board is reticent to present
any long term forecasts in the current political and economic
environment. In fact, given the upcoming elections in France and
Germany and the inauguration of President Trump, we would go so far
as to say that even short-term predictions are nothing more than
speculative guesses.
"Given the perspective outlined above your Board is strongly of
the opinion that cash, cash generation and caution are the
appropriate tenants of Group management in 2017....as they were in
2016.
"We wish everyone a prosperous 2017."
Investor Enquiries:
Thalassa Holdings Ltd
Duncan Soukup, Chairman +33 (0)6 78 63 26 89
WH Ireland Limited (Nominated Adviser and Broker)
Chris Fielding, Head of Corporate Finance +44 (0)207 220 1650
Press Enquiries:
Square1 Consulting (Public Relations)
David Bick +44 (0)207 929 5599
www.thalassaholdingsltd.com
Note to Editors:
Thalassa Holdings Ltd, incorporated and registered in the BVI
and quoted on AIM, is a holding company currently with positions in
the Energy Services and Defence and Homeland Security
Industries.
This information is provided by RNS
The company news service from the London Stock Exchange
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