Business

Belfast shipbuilder Harland & Wolff has shares suspended after delay to annual results

Company cites ‘ongoing discussion’ with auditors over revenue recognition for hold-up

The Harland and Wolff cranes in Belfast. Photograph: PA Wire/PA Images

Sylvia Pfeifer
Mon Jul 1 2024 - 19:05

Belfast shipbuilder Harland & Wolff has suspended trading in its shares in London after accounting issues delayed the filing of its audited annual results.

The Aim-listed company, which owns the shipyard that built the Titanic, said it had been in “ongoing discussion” with its auditors over how to recognise revenues related to the “multiyear and complex nature of some of the contracts under which the company is working”.

H&W said the audited results would now be published a week after the original June 30th deadline.

The delay comes at a time of uncertainty about government-backed financial support for the company, which is trying to reduce its financing costs.

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H&W has a $115 million credit facility with New York-based Riverstone Credit Partners that matures at the end of December. It has been in talks with a group of banks to secure a £200 million loan at a lower interest rate with the UK government acting as a guarantor.

Without that guarantee the loss-making business would need to find other financing to help meet its working capital requirements and fulfil key contracts that include building three ships in a £1.6 billion British Royal Navy contract. H&W won the contract in 2022 as part of a consortium led by Spain’s Navantia.

H&W said on Monday that it expected ministers to make a decision on the export finance (EF) guarantee after this Thursday’s general election, but warned that “should there be any material delays to securing the facility” after that the company’s “ability to execute new and large contacts would be adversely affected”.

John Wood, H&W chief executive, told the Financial Times last month that “all the commercial banks are lined up ready and waiting to go, and I see no reason why a decision can’t be made fairly soon”.

Unaudited results, published on Monday, showed that the company recorded an operating loss of £24.7 million in the year to the end of December 2023, down from a loss of £58.5 million in 2022. Revenues jumped from £27.8 million in 2022 to £86.9 million last year.

H&W’s interest costs rose from £12.29 million in 2022 to £18.37 million in 2023.

Arun Raman, chief financial officer, said that while he was “encouraged by the growth in revenues”, the company’s “financing costs are high”.

“It is crucial to close the UKEF facility as soon as possible in order to provide the stable long-term working capital needed for securing large, multiyear contracts. Our engagement with the UK government continues in order to bring this deal to closure.” – Copyright The Financial Times Limited 2024

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