Harland & Wolff, the Belfast-based shipbuilding firm renowned for constructing the Titanic, has temporarily ceased trading its shares on the London market due to accounting complications delaying its annual audited report. The company, listed on Aim, is in consultation with auditors regarding the best approach to document revenues tied to complex multi-year contracts.
Scheduled for publication a week past the initial 30th June deadline, the delay arrives amidst doubts around government-endorsed financial aid meant to help minimise the company’s costs of borrowing. Harland & Wolff is in possession of a $115 million line of credit due to expire in December from Riverstone Credit Partners, a New York firm. The company has been in negotiation with a consortium of banks to secure a loan worth £200 million at reduced interest rates, contingent on the UK administration acting as guarantor.
Absent this security, other sources of capital would need to be found for the unprofitable company, crucial for meeting operational expenditure and fulfilling significant contracts, one being the construction of three vessels as per a £1.6 billion contract for the British Royal Navy. Awarded the contract in 2022, Harland & Wolff features as part of a consortium directed by Spain’s Navantia.
On Monday, the shipbuilder anticipates a decision on the assurance from the export finance (EF) following the general election this Thursday, cautioning that “any notable delays in securing this facility” could potentially impact their capacity “to undertake new substantial contracts”. John Wood, Harland & Wolff’s CEO, expressed to the Financial Times last month that he had expectations of swift decisions as “commercial banks are poised and ready for action”.
According to unaudited data released on Monday, a reduction in operating losses from £58.5 million in 2022 to £24.7 million in 2023 was noted. Revenue saw a significant increase from £27.8 million in 2022, reaching £86.9 million in the last year. However, interest expenditures for Harland & Wolff increased from £12.29 million in 2022 to £18.37 million in 2023.
Arun Raman, who operates as the chief financial officer, conveyed his positivity regarding the surge in income, although he expressed concern over the company’s significant financing rates. He stressed the absolute necessity to seal the deal with UKEF immediately to ensure sustained provision of the essential working capital, indispensable for acquiring sustained, multiple-year contracts. Ongoing discussions with the UK government are underway with the goal to finalise this agreement. – Copyright The Financial Times Limited 2024.