Harland & Wolff hit by up to £34m order cuts and supply chain delays

1 month ago 11

Harland & Wolff has been deed by proviso concatenation delays and bid cuts worthy astatine slightest £34m, successful a stroke for the owner of Belfast’s historical shipyard arsenic it prepares to restart shipbuilding nether a Ministry of Defence contract.

The institution said it volition make revenues of betwixt £29m and £31m for 2022, importantly beneath the £65m-£75m it said it expected successful September.

Its shares, which are listed connected London’s Alternative Investment Market, dropped by 21% connected Friday during shortened hours up of the caller twelvemonth holiday.

The Harland & Wolff (H&W) sanction is 1 of the astir storied successful British industry, though it is most intimately associated with the Titanic, which infamously sank successful 1912 connected its maiden voyage. In November the UK authorities announced that shipbuilding would restart astatine the gait aft 20 years of focusing chiefly connected repairs.

The institution is besides expected to payment importantly arsenic portion of the squad that won the bid for the £1.6bn declaration to manufacture the UK’s fleet coagulated enactment ships, which are designed to supply munitions, stores and provisions to the Royal Navy’s craft carriers, destroyers and frigates deployed astatine sea. The last assembly of the ships volition instrumentality spot successful Belfast.

The company’s yellowish H&W cranes – named Samson and Goliath – person been afixture of Belfast’s skyline since 1974, though the sanction itself astir disappeared successful 2019 aft a predecessor institution collapsed into administration. The assets were bought by Infrastrata, a listed institution that aboriginal rebranded to Harland & Wolff.

The Belfast tract is not the lone historical shipyard bought by the company. It besides bought Methil connected Scotland’s Firth of Forth estuary, Appledore successful North Devon, and Arnish Point connected Scotland’s Isle of Lewis.

The institution has focused connected enactment for the offshore upwind industry, arsenic good arsenic refitting cruise ships and carrying retired works for navies.

John Wood, the group’s main enforcement said it was “disappointing” to miss the 2022 targets, which helium blamed connected “timing issues”. However, helium said: “We person made important advancement implicit the past 12 months, and I americium assured that we volition spot a robust 2023.”

H&W said the overmuch little gross inactive represented a 56% summation successful turnover erstwhile compared to the 17-month play ending 31 December 2021, erstwhile it made revenues of lone £18.5m.

It is hoping to summation the size of a borrowing installation with lender Astra Asset Management from £70m to £200m successful mentation for the UK contract.

About £20m successful revenues from refitting a erstwhile Ministry of Defence vessel for Lithuania’s defence forces volition beryllium delayed until adjacent year, portion the institution volition suffer oregon hold revenues worthy different £8m to £10m due to the fact that of “geo-political uncertainties and planetary inflation”. It volition besides miss retired connected £5m from a cancelled declaration with Saipem, an Italian lipid and upwind vigor company.