Harland & Wolff, a prominent shipbuilder based in Belfast, has temporarily suspended the trading of its shares on the London Stock Exchange due to a delay in publishing its annual results. This development is attributed to ongoing discussions with auditors regarding complex contract revenues.
Harland & Wolff’s failure to meet the deadline for publishing its annual financial results has prompted a suspension of its shares on the AIM market of the London Stock Exchange. The delay stems from prolonged discussions with auditors concerning the accounting of revenues from multi-year, complex contracts, which necessitated careful consideration to ensure accuracy and compliance.
In its unaudited financial results for 2023, Harland & Wolff reported a narrowed pre-tax loss of £43.1 million, compared to a loss of £70.8 million in the previous year. Meanwhile, the company’s revenues saw a significant increase, tripling to £86.9 million from £27.8 million last year.
The rise in revenue is an encouraging sign amidst ongoing financial pressures, particularly those linked to high interest rates and substantial debt obligations.
The potential for a £200 million government loan guarantee remains uncertain, casting a shadow over Harland & Wolff’s financial stability. According to reports, Chancellor Jeremy Hunt is anticipated to block a critical support package application amidst internal governmental disagreements.
Despite the challenges, Harland & Wolff’s group chief executive, John Wood, asserted that the application for the support package is ‘a work in progress’ and has not been officially rejected.
Harland & Wolff’s outlook received a boost when it was awarded a contract as part of the Team Resolute Consortium to supply three fleet solid support ships for the Royal Fleet Auxiliary. This contract highlights the company’s continued relevance in the shipbuilding sector and its ambitious contract acquisition strategy.
The company is seeking financial backing from the Government’s Export Development Guarantee scheme, typically covering up to 80% of loan risks. However, Harland & Wolff aims for a 100% guarantee, potentially easing financial strains.
Arun Raman, the group chief finance officer, expressed optimism about the revenue growth from 2022 to 2023 as the company moves towards financial self-sufficiency. The heightened financing costs are a concern, amplified by recent base rate hikes.
Securing a stable, long-term working capital facility is deemed crucial for Harland & Wolff’s strategic growth, especially for ongoing and future multi-year contracts.
Harland & Wolff was rescued from administration five years ago through an agreement with energy firm Infrastrata, marking a turning point for the storied company. This intervention is emblematic of ongoing efforts to stabilise operations amidst industry challenges.
The company’s corporate history serves as both a reminder of past hurdles and a foundation for potential recovery, supported by governmental and industry partnerships.
The suspension of share trading is a temporary measure expected to be lifted following the publication of the delayed accounts.
The suspension of Harland & Wolff’s share trading underscores significant challenges and uncertainties. Nevertheless, the firm remains committed to overcoming these hurdles with robust strategic measures and an optimistic outlook towards future growth and financial stability.
