Harland & Wolff Group (HARL ) said it has made good progress across the markets where it operates and that the group has “an attractive pipeline of tangible commercial opportunities” despite rising energy prices and ongoing supply chain issues in the wake of the Ukraine crisis.
In its results for the 17-month period to 31 December 2021, Harland said it expects revenue for 2022 to be in the £65m-£75m range compared with previous guidance of £70m-£75m.
In 2021, Harland changed the date of its accounting reference to 31 December from 31 July.
It said this as a result of issues such as the war in Ukraine and its effect on energy prices as well as the continuing supply-chain issues, which have raised raw-material prices globally. Due to a lengthening impact on sales cycles, clients are more cautious to commit, it noted.
As a result, and despite the difficult background, the Company said it currently expects 2022 revenue to be in the range of £65m to £75m. Whilst Harland faces wage escalation issues similar to others, its overhead base is relatively small, it confirmed to its shareholders today.
The company said wage and cost inflation have started feeding through the business since the end of 1Q22 and that management still continues to maintain a close watch on them.
The U.K. strategic infrastructure projects firm reported a pretax loss of £25.5m compared with a pretax loss of £10.4n for the 12 months ended 31 July 2020. The company outlined to investors that its fiscal 2021 pre-tax loss had widened as a result of booking higher costs.
Despite a current climate that has made clients act cautiously in terms of commiting to orders, Harland said today that its pipelines remain healthy, particularly in renewables and retrofitting.
John Wood, CEO of the Harland & Wolff Group said: “Whilst we appear to be battling the next global crisis as soon as the previous one has ended, I am certain that our strategic presence and work in the sunrise sectors of defence and renewables will be increasingly valuable.”
He commented: “All our five markets are key to us” - that’s commercial, cruise and ferry, defence, energy and renewables - thus “allowing for a healthy mix and diversity of contracts within the overall portfolio and distribution of our capital cost base across the five sectors.”
He said this dynamic should reduce the overall cost of bidding for projects and help win the more price sensitive ones. As a result, Wood said he expects Harland to complete one of its biggest milestones by the end of H1 / early Q3'22 “so as to have all key markets fully active.”
He said: “Given the hard work that the Harland & Wolff team have put in to bring all the yards back into operation and to progress a number of negotiations to contract stage, I am more confident than ever that we are well positioned to deliver across all five of our markets.”
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Harland & Wolff Group, the Belfast shipyard owner, has told inventors that it is guiding towards FY22 revenues in a range of £65m-£75m, compared to £70m-75m previously.
At a closer look, Harland & Wolff Group’s cash flow statement consists of £16,371m worth of investments, implying an underlying operating loss of £6m when compared to £9m in FY20.
Whilst the Company achieved a significant amount of prefabrication, component assembly and engineering works on the jackets in 2021, delays as a result of supply chain issues affecting the global economy have resulted in the majority of fabrication occurring in 2022.
Accordingly, in consultation with its auditors in the current audit process, the board said it 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.
While acknowledging that it remains in a challenging environment, Harland has reiterated its confidence that it can navigate its way through a balanced backlog of projects across all sites “as its continued exposure to five markets and six service sectors begins to reap the rewards.”
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