RCS - Harland & Wolff - Proposed Ferry Build & Operate Programme

Harland & Wolff groupAnnouncement

30/08/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230830:nRSd7264Ka&default-theme=true

RNS Number : 7264K  Harland & Wolff Group Holdings PLC  30 August 2023

RNS Reach

 

30 August 2023

 

 

 

Harland & Wolff Group Holdings plc

("Harland & Wolff" or the "Company")

 

Isles of Scilly - Proposed Ferry Build & Operate Programme

 

Harland & Wolff Group Holdings plc (AIM: HARL), the UK quoted company
focused on strategic infrastructure projects and physical asset lifecycle
management is pleased to announce that it is reaching the conclusion of a full
business case (technical, operational and financial) in relation to the build
and operation of two ferries on the Penzance to Scilly ferry route as well as
one inter-island vessel commencing spring 2025.

With the Government's levelling up funding requiring local content, the
Company has been considering the opportunity to build and operate ferries its
own right. Having spent three years working on and developing its own specific
design and costing model for these vessels, the Company is now at an advanced
stage of pursuing this opportunity more fully.  Accordingly, the Company will
be seeking to make an application for levelling up funding, in conjunction
with approved partners (including local councils) for the build of the vessels
and will, in addition, seek a licence to operate on the Penzance to Scilly
ferry route. In the short term, the Company will continue to refine its ferry
design. The Company will be seeking to operate the vessels on an initial
five-year period, with an option to operate for a further five years if
Government prescribed performance targets are met. These types of arrangements
are normal on ferry routes and are designed to provide the best value for
taxpayer money. If a competing proposal utilises commercial debt, rather than
levelling up funding, the Company believes that the end-user costs over the
lifetime of the proposed vessels may rise and adversely impact the services
being offered.

The remoteness of the Isles of Scilly and the reliance that the islanders
place on these ferries as essential transport links on a day-to-day basis make
it imperative that these ferries are technically suitable for the route and
ensure seamless operation through the harsher winter months. The Company's
proposal seeks to provide these services in the most cost-effective manner,
not only to the islanders but also to the summer tourist trade which will
provide substantial economic benefit to the islands.

For the avoidance of doubt, there is no certainty at this point that this
opportunity will proceed to financial close. In order to build and present as
robust an operational and commercial case as possible, the Company has engaged
with relevant stakeholders and will be undertaking a consultation on the
islands to ensure it provides ships that are not only innovative and
pioneering but also environmentally friendly. One of the key differentiating
features of the Company's vessels would be the provision of a set of enhanced
on-board facilities and amenities rather than simply being a replacement of
the existing vessels. The current passenger vessel in operation, the
Scillonian III, that has served this route for many years was built in the
Company's Appledore shipyard and is well known for her technical and
operational robustness.

John Wood, Group Chief Executive Officer of Harland & Wolff, comments:

"We have a large number of colleagues in Appledore and across the group who
are vastly experienced in the build and operation of passenger vessels. In my
view, it is clear that, given the current cost of capital, access to and
acceptance of levelling up funding will provide a very cost competitive model
to operate either alongside the incumbents or on a stand-alone basis.  This
is a fantastic opportunity and we believe competition on this route is the
right thing to ensure value for money for the residents and tourists of the
islands."

 

For further information, please visit  www.harland-wolff.com
(http://www.harland-wolff.com/)   or contact:

 

 Harland & Wolff Group Holdings plc      +44 (0)20 3900 2122

 John Wood, Chief Executive Officer      investor@harland-wolff.com (mailto:investor@harland-wolff.com)

 Arun Raman, Chief Finance Officer       media@harland-wolff.com (mailto:media@harland-wolff.com)

About Harland & Wolff

Harland & Wolff is a multisite fabrication company, operating in the
maritime and offshore industry through five markets: commercial, cruise and
ferry, defence, energy and renewables and six services: technical services,
fabrication and construction, decommissioning, repair and maintenance,
in-service support and conversion.

 

Its Belfast yard is one of Europe's largest heavy engineering facilities,
with deep water access, two of Europe's largest drydocks, ample quayside and
vast fabrication halls. As a result of the acquisition of Harland & Wolff
(Appledore) in August 2020, the company has been able to capitalise on
opportunities at both ends of the ship-repair and shipbuilding markets where
there will be significant demand.

 

In February 2021, the company acquired the assets of two Scottish-based yards
along the east and west coasts. Now known as Harland & Wolff (Methil) and
Harland & Wolff (Arnish), these facilities will focus on fabrication work
within the renewables, energy and defence sectors.

 

In addition to Harland & Wolff, it owns the Islandmagee gas storage
project, which is expected to provide 25% of the UK's natural gas storage
capacity and to benefit the Northern Irish economy as a whole when completed.

 

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  NRADBGDILUDDGXC