REG - Harland & Wolff - Trading Update and Notice of Results

Harland & Wolff groupAnnouncement

31/03/2022 10:15

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RNS Number : 7590G  Harland & Wolff Group Holdings PLC  31 March 2022

31 March 2022

 

Harland & Wolff Group Holdings plc

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

Trading Update and Notice of Results

 

Harland & Wolff Group Holdings plc (AIM: HARL), the UK quoted company
focused on strategic infrastructure projects and physical asset lifecycle
management, provides a trading update in relation to the 17-month period ended
31 December 2021 and for the first quarter of 2022.

 

As detailed in its announcement dated 16 April 2021, the Company secured its
first major fabrication contract with Saipem Limited for the manufacture of
eight wind turbine jacket structures for the NNG Project (the "Project"),
carrying a contract value of approximately £26 million. Subsequent to the
execution of the contract, Harland and Wolff experienced delays in receipt of
client supplied materials required to commence fabrication of the jackets as a
result of supply chain issues affecting the wider global economy, thus also
resulting in the materials requiring more work after they were delivered.
Whilst the Company achieved a significant amount of pre-fabrication, component
assembly and engineering works on the jackets in 2021, such delays have
resulted in the majority of fabrication occurring in 2022. Accordingly, in
consultation with the Company's auditors during the current audit process, the
board has taken a prudent approach to revenue recognition and determined that
a material portion of revenue, which had been expected to be recognised in
2021, will now be recognised in 2022. As a result, gross revenues for the
Company are expected to be between £18 million and £20 million for the
17-month period, subject to completion of the audit.

 

The Company is pleased to announce that it now has sufficient materials
released at the correct stage of prefabrication by the client to scale up on
fabrication. Accordingly, Harland & Wolff (Methil) has recruited over 245
employees in Q1'22 and has established a night shift. The Company remains
aligned with the client and looks forward to completing this first contract.
The Company now expects phase I of the Project to be substantially completed
in the second half of the financial year.

 

As regards current trading, the Company is pleased to report that the first
quarter of 2022 has been an extremely busy period, especially for the Belfast
facility. The Repair Dock in Harland & Wolff (Belfast) has been full since
the first week of January welcoming over 15 vessels to undertake a number of
repair works. Harland & Wolff (Appledore) has been scaling up on the
pontoon build for RNLI in addition to welcoming several smaller vessels
(dredgers, offshore support vessels and smaller fishing vessels etc.).
Finally, Harland & Wolff (Arnish) has been busy with the contract that it
signed last year and continues its fabrication at pace. Additionally, Harland
& Wolff (Arnish) has signed an additional contract along with a variation
to its existing contract that extends its scope and works, thereby generating
additional revenues for the site.

 

As we move into Q2, the Company is involved in a number of advanced
negotiations that it believes should come to fruition over the course of the
next few weeks and months. Further contract announcements will be made in due
course.  The Company remains confident in its ability to meet the 2022
guidance previously provided and is now very close to having all five of its
key markets commercialised.

The Company expects to announce its results for the 17-month period ended 31
December 2021 in April 2022.

John Wood, Group CEO of Harland & Wolff, comments:

"Global supply chain problems have clearly impacted our business, as they have
impacted others. This was the primary reason we opted for our client (Saipem)
to provide the materials for our first renewables project. However, I am
encouraged that these problems have now been substantially resolved in
relation to our existing contracts. Looking ahead, whilst we remain in a
challenging environment, I am confident that we will successfully navigate our
way through a balanced backlog of projects across our sites as our continued
exposure to five markets and six service sectors is beginning to reap rewards.
We are seeing significant movement within the cruise and renewables markets
and are at advanced stages of negotiations on several potential contracts.
Whilst the defence market tends to have a longer gestation period prior to
contract award, we continue to make good progress on various fronts. The
issuance of the National Shipbuilding Strategy as well as the successful
outcome of the Scotwind licensing round bodes well for the decade ahead and
fits perfectly into our strategic vision set out at the start of the Harland
and Wolff journey twenty-four months ago. I look forward to making some
contract announcements over the course of the next quarter."

 

 

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 expected to provide 25% of the UK's natural gas storage
capacity and to benefit the Northern Irish economy as a whole when completed.

 

 

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