Harland & Wolff (HARL ) subsidiary, Harland & Wolff (Appledore) has been awarded a contract worth more than £2m by Herbosch-Kiere Marine Contractors for the fabrication of a steel pontoon.
The shipyard and energy infrastructure group said the steel pontoon will measure around 53m by 14m and weigh 450 tonnes and will replace the existing Royal National Lifeboat Institution Tower Lifeboat Station based under Waterloo Bridge on the north bank of the Thames.
The works, which will involve the manufacture of the foundation, stairways and handrails for the RNLI lifeboat station, are expected to last around eight months until June 2022.
This morning’s news marks the first contract win by Appledore since it was acquired by Harland & Wolff back in August 2020. Addressing shareholders, the Board said it considers the win to be ‘a major achievement’ that it will enable it to ramp up the yard and its workforce.
Going forward, Harland & Wolff told investors that it expects today’s contract win to position the Company strongly to win further and larger fabrication and shipbuilding contracts.
Commenting on the win, John Wood, Chief Executive Officer of Harland & Wolff said: “This major fabrication contract is a significant and exciting milestone for Harland & Wolff Appledore. Since we acquired the yard, we have had great confidence in the potential of this business, and we are starting to see the strategy that we set out come together.”
Harland has already started to ramp up its workforce and prepare the yard for the project.
Wood added, “This pontoon will give us the opportunity to demonstrate the excellent fabrication and shipbuilding skills within our Appledore workforce and will give our apprentices at Appledore a fantastic project to work on at the start of their careers with us.”
Earlier this week, Harland & Wolff unveiled a new agreement and a new full marine licence.
In its interim results for the twelve-month period to 31 July 2021, Harland & Wolff Group reported a seven-fold increase in revenues to £10.18m and a gross margin of 24%, in line with Company’s expectations for the portfolio of contracts delivered during the period.
As a result of its performance, the Directors of the shipyard and energy infrastructure group now believe that the Company will achieve a cash break-even on an annualised basis by the end of the current financial year (31 December 2021) and will be EBITDA positive in 2022.
By period end, the Group had the largest fabrication footprint in the country, two of the largest dry docks in Europe and two of the largest specialist fabrication sites in the UK. Today, all sites are fully operational with each winning work and servicing clients, both new and repeat.
Going into the second half of the current financial year and into the next year, the Company said it expects to have greater visibility and certainty of monthly cash flows. Currently, it is in discussions to structure a group revolving credit facility that it will be able to draw-down on as and when required, ‘especially to fulfil the working capital requirements of larger contracts.’
‘It is the Board’s view that the Company will benefit from having the ability to draw-down debt on an ongoing basis as the Company scales and wins larger contracts,’ the Company added.
Going forward, Harland & Wolff informed investors that it expects more robust activity and contracts as the global economy normalises in 2022 and beyond. It said it is confident that revenue for the 17-month period to December 2021 will be in line with market expectations.
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