REG - Harland & Wolff - Interim Results
30/09/2022 07:01
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RNS Number : 2505B Harland & Wolff Group Holdings PLC 30 September 2022
30 September 2022
Harland & Wolff Group Holdings plc
("H&W" or the "Company" or the "Group")
Unaudited interim results for the six months ended 30 June 2022
Harland & Wolff Group Holdings plc (AIM: HARL), the UK-quoted company
focused on strategic energy infrastructure, fabrication, shipbuilding and
vessel repairs is pleased to present its unaudited interim results for the
six-month period ended 30 June 2022. .
Key highlights:
· Revenues of £15.41 million; a three-and-a-half-fold increase
from the previous year (30 June 2021: £4.14 million).
· Gross margin of 22% in line with Company's expectations for
contracts delivered in the period despite inflationary pressures.
· Operating loss before depreciation, amortisation and financing
costs of £14.06 million (30 June 2021: £8.16 million).
· Group corporate credit facility of $70 million signed in March
2022 with drawdowns being utilised to fund ongoing working capital
requirements.
· With a series of contract announcements made post the half-year
period (Cory Phase 1 and 2 as well the M55 Regeneration Programme), the
Company's revenues will be weighted towards Q3 2022 and Q4 2022.
· Therefore, the Company continues to maintain its guidance of
achieving revenues of between £65 million and £75 million at the end of
FY22.
Operational Review
Cruise & Ferry Market
The Belfast repair dock was full during the first half of FY22. Whilst the
ferry business has become a baseload form of revenue for the repair dock
operations, the Company was pleased to welcome the Queen Victoria cruise
vessel during this period. This was the Company's first major cruise dry
docking which was successfully redelivered to the client.
The cruise market has fundamentally shifted after the Covid-19 pandemic. New
build orders have either been postponed or cancelled entirely as cruise
operators are increasingly preferring to repair and refurbish their existing
fleet, which bodes well for the Company. On the back of the Queen Victoria
contract, the Company has been negotiating a series of cruise vessel dockings
with multiple owners with vessels arriving in Q1 2023.
Renewables
The Company continues to make inroads into the renewables market. After the
announcement of the Scotwind auction results in in the first half of FY22, the
Company is now formally engaged with a number of developers who have been
awarded licences in the current auction round. Projects being developed
consist of both fixed and floating wind structures and whilst large
fabrication contracts are still between 18-24 months away (awaiting various
permissions that developers need to secure prior to full scale fabrication),
the Company expects to see a number of demonstrator models and prototypes
being contracted for in Methil, Arnish and Belfast in FY23.
Saipem Contract
The Saipem contract for the fabrication of eight wind turbine generator
jackets for the NNG project was signed in 2021 with a twelve-month completion
period. The project has encountered delays due to a number of client materials
arriving late and being defective in nature rendering them incapable of being
used. Both parties (H&W and Saipem) have recognised the difficulties in
meeting the project schedules due to these problems Therefore, a new agreement
has been reached which will involve de-scoping the contract from eight jackets
to four jackets. In recognition of the investments and fixed costs incurred by
the Company for fabrication, a revised contract has been agreed for four
jackets with a value of £23 million, in place of the original contract value
of £26.50 million for eight jackets. The Company expects to deliver these
jackets in sequence through Q1 2023.
As a result of this, the Company has conducted a review of its future
operations at both Methil and Arnish and whilst it remains important to bid
for larger fabrication programmes (fixed and floating structures), the
gestation period from the inquiry stage to the contract award stage can be as
long as eighteen months. With a focus on generating as much revenue as
possible and to build a consistent baseload of revenues, going forward, the
Company will instead be focusing more heavily on smaller contract values of
between c.£4 million and c.£10 million per contract for Methil and Arnish.
These contracts will be for the fabrication of specific component parts,
transition pieces, tubulars, pipework and other such bespoke items for large
wind farm projects. The Company believes that servicing multiple clients with
smaller orders simultaneously will reduce the dependence on one single, large
client and will significantly de-risk the operations of both facilities.
Defence
With the award of the M55 contract, the Company is building its credentials
within the defence market and is in negotiations with Prime Contractors for
larger sub-contract programmes and, further, with the Ministry of Defence as
Prime Contractor, in its own right, for smaller defence programmes. The
ongoing geo-political upheaval in the Ukraine (and globally) has focussed
Government's attention on boosting the country's defence capabilities and
there is a growing cross-party desire to boost the country's sovereign
capabilities for shipbuilding, ship repairs and ship refurbishments. In
addition to defence spending, the Government has also committed to the build
of the next generation of research, border patrol and other commercial vessels
per the refreshed National Shipbuilding Strategy under the aegis of the
National Shipbuilding Office. The Company believes that with the twin
political agendas of shipbuilding and levelling-up, it is well positioned to
bid for defence and government-related contracts as invitations to tender
arise. .
The Company is formally engaged in the Fleet Solid Support Programme (FSS)
under the Team Resolute umbrella with Navantia as the Prime Contractor and the
Company as its sub-contractor. The final set of bid documents was delivered to
the Ministry of Defence in July, with the preferred bidder being announced in
Q4 2022. Whilst the Company remains optimistic that the preferred bidder
status will be awarded to Team Resolute, the Company believes that there will
be significant subcontract opportunities with other Primes should they be
awarded preferred bidder status given the lack of capacity in other UK yards.
The Company will make an announcement on the outcome of the FSS decision when
known.
Commercial
The commercial fabrication market has started showing signs of growth and the
Company sees significant opportunities both for fabrication and vessel
repairs. Post the half-year end, the Company signed two contracts with the
Cory Group (Cory Phases 1 and 2) for the build and fabrication of 23 barges in
Belfast. Due to the ongoing Russia-Ukraine crisis and associated sanctions,
the Company withdrew from the tendering process of a series of oil and LNG
tankers with either Russian ownership or links to ultimate Russian beneficial
ownership. The Company continues to open up other avenues and is seeing
significant traction for its dry-docking operations for tankers, FPSOs and LNG
carriers under European and American ownership.
Energy
The Company successfully completed two energy-related projects from its Arnish
facility in the first half of the year; structures for an oil and gas project
in the Black Sea and fabrication of super duplex structures for a nuclear
power plant in the UK. Following the success of both projects, repeat
contracts are currently being scoped out. The Ukraine crisis has highlighted
the need for self-reliance with regards to energy supplies.
The Company's assets are strategically located to major North Sea developments
and discussions are ongoing in relation to contracts for life of field
extensions, new exploration programmes and support for the fast-growing
renewables market by repurposing existing offshore platforms. As with the
Renewables vertical, whilst the Company is bidding for larger contracts that
have a longer gestation period, the Company continues to pursue smaller
contracts that are awarded quickly and can keep both revenues and working
capital moving.
Islandmagee Gas Storage Project
The Islandmagee gas storage project has come to the forefront of attention
given the structural shortage of gas storage in the UK and volatile gas
prices. Whilst full scale operation is still a few years away, this project
has highlighted the length of time it takes to develop key strategic
infrastructure and the inefficiencies surrounding the development of such
projects. Moreover, the project has also highlighted the growing importance of
the need for flexible storage that can be future proofed and made capable of
transitioning into hydrogen storage, which will be another major pinch point
in a hydrogen-led economy.
The Company is currently in a judicial review process in relation to the grant
of the project's marine licence. Court hearing dates have been set for
November 2022. As previously stated, the Company is afforded confidence from
its legal counsel that the judicial review will find in the Company's favour.
The Islandmagee gas storage project continues to remain the Company's flagship
energy project and discussions are continuing with counterparties, from oil
and gas majors to Government, to determine the most appropriate methodology to
monetise the gas store.
Financial overview
For the period ended 30 June 2022, the Company's consolidated revenues stood
at £15.41 million (30 June 2021: £4.14 million) representing a
three-and-a-half-fold increase from the comparative period last year. The
gross profit for the period stood at £3.38 million (30 June 2021: £1.39
million) representing a gross margin percentage of 22%. Margins are in line
with our expectations. As we move into the next phase of the Company's growth
cycle, with the onset of large fabrication contracts, we expect to develop an
optimum mix of contracts within the portfolio to ensure gross margins achieve
our optimum level.
As with every other business, there are significant inflationary pressures to
manage and navigate at present. We are, as far as possible, reducing our
exposure to the volatility in steel prices by requesting for client-delivered
materials therefore de-risking the procurement process for the Company. Where
we are required to acquire steel, our contracts are typically structured on a
floating price with the costs being passed directly to the client. Our goal
remains to develop an optimum blend of work across the four sites, in order to
maintain our gross margin target of approximately 25%. However, we are
operating in a highly volatile environment at present and will not be able to
pass on all labour and energy related cost increases to every client. We are
working with each client on a case-by-case basis to mitigate these cost
increases and structure a risk and cost sharing mechanism that is mutually
beneficial to both parties.
The operating loss (including depreciation and amortisation) for the period
stood at £14.06 million (30 June 2021: £8.17 million). This loss reflects an
increase in the number of personnel and overall overheads, reflecting the need
to service five assets (Belfast, Appledore, Methil, Arnish and London).
Operating losses included increased non-capitalised insurance, IT,
recruitment, legal and asset maintenance costs on a much larger asset base
relative to the comparative period.
The Group now has one of the largest fabrication footprints in the country,
two of the largest dry docks in Europe and two of the largest specialist
fabrication sites in the UK. Having acquired these assets out of
administration, we have had to undertake an accelerated programme of repairs
and maintenance, as well as build up our core staff strength in order to be
able to bid for and win large value contracts. Today, it is pleasing to see
all our sites fully operational, with each one winning work and servicing
clients, both new and repeat.
Whilst we continue to focus on a conservative level of cash burn relative to
our physical size, general overheads and non-project related costs have
increased over the period. Administrative expenses for the period stood at
£16.43 million (30 June 2021: £8.77 million) which was due to our broader
asset base and our strategy to service, grow and maintain a developing
business.
On 9 March 2022, we announced that we had entered into a group-wide $70
million Green Term Loan Facility with affiliates of Riverstone Credit
Partners, LLC ("RCP"), a dedicated credit investment platform managed
by Riverstone Holdings LLC and focused on entities engaged in building
infrastructure and providing infrastructure services to generate, transport,
store and distribute both renewable and conventional sources of energy. The
Facility is there to support growth and supplement the Company's working
capital requirements.
The Facility is split into two tranches:
· A committed facility of $35 million
· An uncommitted accordion facility of up to $35 million
The Company has utilised the first tranche of $35 million and has commenced
discussions with RCP on the activation of the second tranche accordion and
converting a portion of that uncommitted facility into a committed facility.
This upsized facility will principally be used for paying down the Appledore
deferred consideration in its entirety and for ongoing working capital needs
of the Company.
Outlook
Going into the second half of the current financial year, we are seeing a
significant increase in revenues from the key projects that were contracted at
the beginning of Q3 2022.
In addition, Q4 2022 is the beginning of the peak cruise and ferry repair
season and we already have a number of repair contracts in place. Key
contracts such as the Saipem contract, Cory barges and the M55 Regeneration
Programme continue to be executed at pace, all of which will provide baseload
revenue visibility for the remainder of this year and next.
The Company continues to maintain its guidance of achieving revenues of
between £65 million and £75 million at the end of FY22. Furthermore, we have
significantly increased our forward backlog* position to £100m.
John Wood, CEO of Harland & Wolff Group Holdings plc, commented:
"Our business model and strategy remain robust and has been validated not only
by the fact that we are now operational in all five markets, but also by
external counterparties such as Riverstone who have invested on the basis of a
sound business strategy. We have a growing reputation in our markets and I
remain very optimistic about the trajectory of the Company.
After a slow start this year, we have now gained significant momentum with the
rapid execution of three major contracts. As we announce these interim
results, we have a backlog of over £100 million, a record level for the
Company, affording us strong future visibility of revenue."
*Backlog is defined as confirmed contracted revenues for future periods.
This announcement contains inside information.
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)
Seena Shah, Head of Marketing & Communications media@harland-wolff.com (mailto:media@harland-wolff.com)
Cenkos Securities plc (Nominated Adviser & Broker) +44 (0)20 7397 8900
Stephen Keys / Callum Davidson / Dan Hodkinson (Corporate Finance)
Michael Johnson (Sales)
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 capable of providing 25% of the UK's natural gas storage
capacity and which would benefit the Northern Irish economy as a whole when
completed.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2022
Six months to Six months to
30 June 30 June
2022 2021
Unaudited Unaudited
Notes £ £
Continuing operations
Revenue 15,413,527 4,143,863
Cost of sales (12,031,833) (2,748,683)
Gross profit 3,381,694 1,395,180
Management and administrative expenses (16,432,799) (8,769,630)
Other income 337,960 412,169
Depreciation and amortisation (1,354,540) (1,206,248)
Operating loss (14,067,685) (8,168,529)
Finance income - 205
Finance costs (3,580,205) (1,166,505)
Loss before taxation (17,647,890) (9,334,829)
Taxation - -
Loss for the period (17,647,890) (9,334,829)
Total comprehensive loss for the period attributable to:
Owners of the company (17,647,890) (9,334,829)
Earnings Per Share
Basic and diluted 2 (10.83) (10.45)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
30 June 30 June
2022 2021
Unaudited Unaudited
Notes £ £
Non-current assets
Intangible assets 3 12,055,457 11,880,556
Property, plant and equipment 4 24,437,365 19,345,086
Right of use assets 5 12,580,662 13,330,726
Total non-current assets 49,073,484 44,556,368
Current assets
Inventories 9,005,144 3,268,144
Trade and other receivables 6 10,637,686 2,415,917
Cash and cash equivalents 2,290,311 5,724,990
Total current assets 21,933,141 11,409,051
Current liabilities
Trade and other payables 7 (29,783,848) (13,323,733)
Loans and borrowings 8 (6,902,000) (599,060)
Lease liabilities 8 (1,499,946) (1,302,492)
Total current liabilities (38,185,794) (15,225,285)
Net current liabilities (16,252,653) (3,816,234)
Non-current liabilities
Loans and borrowings 8 (15,126,074) (2,090,000)
Lease liabilities 8 (13,891,686) (13,867,903)
Financial liability 8 (200,000) (200,000)
Total non-current liabilities (29,217,760) (16,157,903)
Net assets 3,603,072 24,582,231
Shareholders' funds
Share capital 12,444,734 12,032,879
Share premium 58,736,711 52,114,865
Merger reserve 8,988,112 8,988,112
Share based payment reserve 379,904 233,332
Revaluation reserve 6,074,895 6,074,895
Retained earnings (83,021,284) (54,861,852)
Total equity 3,603,072 24,582,230
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2022
Share Share Revaluation Merger Share based Retained Total
capital premium Reserve reserve payment earnings equity
reserve
£ £ £ £ £ £ £
Balance at 1 January 2021 (Unaudited) 11,465,301 33,961,603 6,074,895 8,988,112 125,673 (45,527,023) 15,088,561
Loss for the period - - - - - (9,334,829) (9,334,829)
Total comprehensive expense for the period - - - - - (9,334,829) (9,334,829)
Transactions with owners recorded
directly in equity:
Shares issued 567,578 18,153,262 - - - - 18,720,840
Share option expense - - - - 107,659 - 107,659
Balance at 30 June 2021 (Unaudited) 12,032,879 52,114,865 6,074,895 8,988,112 233,332 (54,861,852) 24,582,231
Balance at 1 January 2022 (Audited) 12,444,734 58,736,711 6,074,895 8,988,112 360,501 (65,373,396) 21,231,557
Loss for the period - - - - - (17,647,890) (17,647,890)
Total comprehensive expense for the period - - - - - (17,647,890) (17,647,890)
Transactions with owners recorded
directly in equity:
Share option expense - - - - 19,403 - 19,403
Balance at 30 June 2022 (Unaudited) 12,444,734 58,736,711 6,074,895 8,988,112 379,904 (83,021,286) 3,603,070
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2022
Six months to Six months to
30 June 30 June
2022 2021
Unaudited Unaudited
£ £
Cash flows from operating activities
Loss for the period (17,647,890) (9,334,829)
Adjustments to cash flows from non-cash items:
Depreciation and amortisation 1,354,540 1,206,248
Foreign exchange loss 101,337 -
Finance costs 3,580,205 1,166,505
Share option expense 19,403 107,659
(12,592,405) (6,854,417)
Working capital adjustments:
Increase in inventories (7,828,503) (2,239,759)
Increase in trade and other receivables (3,811,742) (768,898)
Increase/(decrease) in trade and other payables 7,673,315 (917,449)
Net cash outflows from operating activities (16,559,335) (10,780,523)
Cash flows from investing activities
Acquisitions of property, plant and equipment (680,716) (1,184,405)
Acquisitions of intangible assets (133,813) (387,998)
Net cash outflows from investing activities (814,529) (1,572,403)
Cash flows from financing activities
Proceeds from issue of shares, net of share issue costs - 15,233,881
Proceeds from borrowings, net of debt issuance costs 20,155,203 -
Repayment of borrowings and lease liabilities (4,549,580) (333,311)
Interest paid (1,219,450) (963,955)
Net cash inflows from financing activities 14,386,173 13,936,614
Net (decrease)/increase in cash and cash equivalents (2,987,691) 1,583,688
Cash and cash equivalents at the start of the period 5,278,002 4,141,302
Cash and cash equivalents at the end of the period 2,290,311 5,724,990
NOTES TO THE INTERIM RESULTS
For the six months ended 30 June 2022
1. Accounting policies
Basis of preparation
The interim financial information in this report has been prepared using
accounting policies consistent with International Financial Reporting
Standards (IFRS) as adopted by the European Union (EU). IFRS is subject to
amendment and interpretation by the International Accounting Standards Board
(IASB) and the IFRS Interpretations Committee and there is an ongoing process
of review and endorsement by the European Commission. The financial
information has been prepared on the basis of IFRS that the Directors expect
to be adopted by the European Union and applicable as at 30 June 2022.
Non-statutory accounts
Financial information contained in this document does not constitute statutory
accounts within the meaning of section 434 of the Companies Act 2006.
A copy of the statutory accounts of the Company for the 17-month period ended
31 December 2021 has been delivered to the Registrar of Companies. The audit
report on these accounts is unqualified and did not contain a statement under
Sections 498(2) or (3) of the Companies Act 2006.
The financial information for the six months ended 30 June 2022 and 30 June
2021 is unaudited.
The Group has chosen not to adopt IAS 34 "Interim Financial Statements" in
preparing the interim financial information'.
The interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the 17-month period ended
31 December 2021, which was prepared under IFRS as adopted by the EU, and
any public announcements made by Harland & Wolff Group Holdings plc during
the interim reporting period.
Accounting policies
The interim financial information has been prepared under the historical cost
convention except for certain items that are shown at fair value as disclosed
in the accounting policies.
The same accounting policies, presentation and methods of computation are
followed in preparing the interim financial information as were applied in
preparation of the Group's financial statements for the 17-month period ended
31 December 2021.
The financial statements are presented in Sterling which is the functional
currency of the Group, and all values are rounded to the nearest Pound
Sterling (£).
Basis of consolidation
Subsidiaries are all entities (including structured entities) over which the
Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that control
ceases.
Inter-company transactions, balances and unrealised gains on transactions
between group companies are eliminated. Unrealised losses are also eliminated.
When necessary, amounts reported by subsidiaries have been adjusted to conform
with the Group's accounting policies.
NOTES TO THE INTERIM RESULTS
For the six months ended 30 June 2022
1. Accounting policies (continued)
Going concern
The interim results have been prepared on a going concern basis. During the
six months ended 30 June 2022 the Group announced that it secured the build of
eleven barges for the Cory Group valued at £8.40 million over a period of 10
months and has also secured, on 13 July 2022, its first major defence contract
with the refurbishment of the M55 Minehunter, the contract valued at circa
£55 million and to be completed within 24 months. Further, the Company
announced a further contract worth £9.60 million on 19 July 2022 for an
additional twelve barges for the Cory Group. Additionally, there is a strong
pipeline of opportunities across the five markets that the Group is involved
in that management seeks to convert into firm contracts. However, given the
uncertainty surrounding bid success and the relative lack of bid to success
history, management have prepared a worst-case scenario in respect of their
going concern assumptions. This assumes no bid contract wins and that the sole
revenue generated by the Group will arise from the existing contracts that are
currently being fulfilled at the various facilities within the Group. The
scenario includes all expected costs associated with such works as well as the
repayment of all liabilities that fall due and takes into account all cost
savings and process efficiencies considered achievable. Based on this worst
case forecast scenario the directors have a reasonable expectation that the
Group has access to adequate resources to continue in operational existence
for the foreseeable future. Thus, they continue to adopt the going concern
basis of accounting in preparing the interim results for the six months ended
30 June 2022.
2. Earnings per share
Six months to Six months to
30 June 30 June
2022 2021
Unaudited Unaudited
£ £
The loss for the purposes of basic and diluted earnings per share being the
net loss attributable to equity shareholders
Continuing operations (17,647,890) (9,334,829)
Number of shares
Weighted average number of ordinary shares for the purpose of:
Basic earnings per share 162,887,840 89,336,977
Basic and diluted earnings per share
Continuing operations (10.83) (10.45)
NOTES TO THE INTERIM RESULTS
For the six months ended 30 June 2022
3. Intangible assets
Project Total
Artefacts Trademarks Gas storage Development costs
development costs
£ £ £ £ £
Cost
At 1 January 2022 647,395 863,192 10,028,338 55,000 334,177 11,928,102
Additions - - 133,813 - - 133,813
At 30 June 2022 647,395 863,192 10,162,151 55,000 334,177 12,061,915
Amortisation
At 1 January 2022 - - - 5,083 - 5,083
Amortisation charge - - - 1,375 - 1,375
At 30 June 2022 - - - 6,458 - 6,458
Net book value
At 30 June 2022 647,395 863,192 10,162,151 48,542 334,177 12,055,457
At 31 December 2021 647,395 863,192 10,028,338 49,917 334,177 11,923,019
4. Property, plant and equipment
Land and buildings Office equipment Motor vehicles Plant and machinery Total
£ £ £ £ £
Cost or valuation
At 1 January 2022 11,951,519 274,975 554,517 15,200,892 27,981,903
Additions - - - 680,716 680,716
At 30 June 2022 11,951,519 274,975 554,517 15,881,608 28,662,619
Depreciation
At 1 January 2022 881,940 136,424 118,842 2,109,915 3,247,121
Charge for the period 214,064 22,542 28,082 713,445 978,133
At 30 June 2022 1,096,004 158,966 146,924 2,823,360 4,225,254
Carrying amount
At 30 June 2022 10,855,515 116,009 407,593 13,058,248 24,437,365
At 31 December 2021 11,069,579 138,551 435,675 13,090,977 24,734,782
NOTES TO THE INTERIM RESULTS
For the six months ended 30 June 2022
5. Right of use assets
Property
£
Cost or valuation
At 1 January 2022 14,301,897
Additions -
At 30 June 2022 14,301,897
Depreciation
At 1 January 2022 1,346,204
Charge for the period 375,031
At 30 June 2022 1,721,235
Carrying amount
At 30 June 2022 12,580,662
At 31 December 2021 12,955,693
6. Trade and other receivables
30 June 30 June
2022 2021
Unaudited Unaudited
£ £
Trade receivables 2,411,008 292,644
Accrued Income 5,532,511 103,793
Other receivables 1,060,560 1,396,695
Prepayments 1,633,607 622,786
10,637,686 2,415,917
7. Trade and other payables
30 June 30 June
2022 2021
Unaudited Unaudited
£ £
Trade payables 17,814,372 3,431,788
Social security and other taxes 2,707,543 2,783,818
Outstanding defined contribution pension costs 118,092 63,335
Other payables 153,560 340,868
Accruals and deferred income 8,990,280 6,703,923
29,783,848 13,323,733
NOTES TO THE INTERIM RESULTS
For the six months ended 30 June 2022
8. Financial liabilities
30 June 30 June
2022 2021
Unaudited Unaudited
£ £
Current liabilities:
Loan facility 6,902,000 -
Lease liabilities - right of use 1,499,946 1,302,492
Costain Loan - 599,060
8,401,946 1,901,552
Non-current liabilities:
Loan facility 15,126,074 -
Lease liabilities - right of use 13,891,686 13,867,903
Moyle Investments 200,000 200,000
Other borrowings - 2,090,000
29,217,760 16,157,903
Loan Facility
The Company entered into a group-wide loan facility on 9 March 2022 with
affiliates of Riverstone Credit Partners, LLC ("RCP"), split into a committed
facility of $35 million and an uncommitted accordion facility of up to $35
million. The facility matures on 9 September 2023 and has an interest rate of
the published 90 day Secured Overnight Financing Rate (the "SOFR") plus 9% per
annum, with the floor of the SOFR set at 1%. The Company may elect to extend
the maturity date by six months at a time up to three times for a final
maturity date no later than 9 March 2025.
Moyle Investments
In December 2017, the Company's wholly owned subsidiary, InfraStrata UK
Limited increased its ownership in Islandmagee Energy Limited from 90% to 100%
by acquiring the remaining interest from Moyle Energy Investments Limited at
par value. In recognition of the support by Moyle of the gas storage project
at Islandmagee, Harland & Wolff Group Holdings plc will pay Moyle
£200,000 on first gas storage.
9. Seasonal trend analysis
The Company normally observes a seasonal trend of ferry and cruise repairs
being conducted over the winter period in preparation for summer sailings.
However, given the effects of the lockdowns as a result of the COVID-19
pandemic, major ferry clients deferred their winter 2020 works into summer and
autumn 2021. Whilst the effects of the lockdown slowly dissipate, we envisage
seasonal normality to be the norm going forward. There are no particular
seasonal variations observed within the other markets.
10. Dividend
The Directors do not recommend payment of a dividend for the period to 30 June
2022.
11. Publication of the interim report
This interim report is available on the Company's website
https://www.harland-wolff.com (https://www.harland-wolff.com/)
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