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Well considering all the news from the government this week and last I am surprised the SP is drifting down, But I suppose with no contracts of any material value and 4 yards to support maybe people are wandering what is going to pay for them??
But we are into the last week of QTR1 and as I thought the dithering from DAERA continues but hopefully they can / will form an opinion to the minister before the end of next week. Getting a bit bored now!
See this from H&W https://twitter.com/Harland_Wolff1/status/1374650645416906756
Not sure if this has been posted alreadyhttps://www.heraldscotland.com/news/19181783.uk-defence-plans-will-see-shipbuilding-renaissance/
Looking back at the Cenkos research note from last year I note that £90m of government contracts are due to be awarded in Q2.
https://www.telegraph.co.uk/business/2021/03/23/warship-u-turn-set-boost-british-shipbuilding/
Identifies rumoured bidding parties
Getting ready for the bigger jobs? https://www.linkedin.com/posts/kelly-o-rourke-8b224281_harland-wolff-recently-commissioned-me-activity-6780219096333074432-8eh9
Hi all, I'm a slow reader and skim reading the strategy but what I am reading is looking good for Team Resolute and or h&w. I've feared the drive to build British would impact on any team resolute partnership however page 70 states "While we are specifying
what industrial capabilities we expect to
be maintained onshore as national
security priorities, this does not preclude
overseas based companies being
involved." And then this on page 90 which gives me great confidence in answering any questions around current h&w experience..."The intent is to create a virtuous cycle of
improvement across the maritime
ecosystem. By carefully phasing the
programme, we will sustainably grow the
capacity and capability of the UK
shipbuilding enterprise, potentially
drawing on the expertise of international
partners where appropriate." These 2 snippets have confirmed in my mind that we are on the cusp of multi million £ mod work
Speedy, indeed it does and yes one is in Scotland
As I suspect that INFA either watches this board or has some friends on it I am going to float something and assume it will find its way back to the BoD. When INFA acquired Appledore one of the assets that were acquired was about 29 acres of Freehold land on the waterfront. I was thinking, (always dangerous for me), some of this land could be used to build an onshore wind farm to power the shipyard. Due to our benevolent Chancellor of the Exchequer the economics appears to me be favourable. At the last budget a super deduction of 130% of the costs of an investment in a business is deductible I am not sure if this is from tax or profits. Also as Appledore has fabrication facilities most of the parts can be fabricated on site potentially reducing construction costs. Any electricity that is not used in powering the shipyard can be sold back to the grid creating an additional revenue stream. Is this feasible? I believe the next CfD auction round is later this year.
Interesting bit of news not sure it will benifit infra build the government are setting up four regional buisness hubs one of which is in Ireland
Let us not forget that there is a weighted pipeline of work to the tune of 2bn between now and 2025 - I think this was before the BiFab acquisition? I think in one of the investor presentations they outlined a bit by market and sector but I can’t remember the numbers. Doesn’t really matter since we are a 30m market cap company that has not has one significant contract yet. The instant we get one, just one, bigger contract then perception will change and the SP will change too. The market valuation is at first determined by perception rather than contracted future earnings and we have a Board that has focussed on generating future earnings without spending much time at all on shareholders and the share price (this is true to JW’s word). Maybe that was right for the longer term but now is the time for contracts and a step change in market perception.
LSE03 In relation to your 16.17 I note in the article referencing the revised National Shipbuilding Strategy while giving no publication date says that it will cover the totality of government shipping. This raises the possibility that even if INFA are not a Prime Contractor for any on the MOD work it may be the Prime Contractor for other government shipbuilding work.
Article highlighting shipbuilding policy change and more details to follow in shipbuilding strategy
https://www.walesonline.co.uk/news/uk-news/british-shipbuilding-renaissance-sparked-defence-20238319
go. :-)
That’s a good summary of the position re the ML Loosegoose. 2 years ago the ML decision was a boom or bust for INFA. Not any more.
If the ML is granted, it definitely will be a massive boost for INFA. If it’s declined I believe it will affect the share price in the shorter term only, as many early investors came onboard with it in mind. They may just have had enough and jump out if it’s declined.
What I however feel is more likely is that if DAERA do put a recommendation to proceed to the minister or to the executive, is that it will be with conditions attached. I’ve obviously no knowledge of what conditions they might be, but lets say it was a longer discharge pipe, 2 discharge pipes over a greater area, lower daily cubic metre discharge rates, additional test data, etc. These are all achievable, albeit with additional time delays and additional expenses. They’re achievable though and we’ll have other income streams while we’re waiting.
Something that JW referred to previously is that there is a plan B, C, D,E and more as options for Islandmagee and this project. We don’t know these options, but could one of them be to maybe to sell Islandmagee ? ? If it was, it would obviously achieve maximum value if there was a ML granted with no conditions. Regardless of whether it is granted or a decline, there is still a monetary value on the Isalandmagee project if it was being sold on.
Not normally me, but I’m going to look at a very worst case scenario. It’s a straight forward decline for talks sake. There still I feel would be very interested parties in taking over the project as the financial gains that could be here are massive. They might feel they could do a better job than INFA in getting an ML sign off, or go about it with a different approach maybe. Ie Hydrogen is the buzz word these days and it’s definitely the future. Might they feel a Hydrogen storage facility could be more likely to be signed off if they can evidence a greater need for it.
The bottom line for me is that Islandmagee has a saleable value whether the ML is granted / granted with conditions / or declined.
Would I personally sell my shares right now, today, even if I did feel the ML was going to be declined in the next week or 2 ? NO WAY, is the short answer. I’d be too afraid to be ‘out of market’ for when possibly bigger contract news is announced (and a subsequent share price jump) , and I feel that’s very close.
Don’t forget that with all this hype at the minute around the big grey boats with shooty guns and the wurley windmills possibly happening , we’re only 13 weeks away from the end of June and when we might see the LOI with Triumph progress to an order. June was the timescale discussed for this and this was 300M+ for one ship.
To summarize this above spiel. Is the ML essential for INFA going forward. Nahhhh, it’s not, not at all. Would it help. Definitely, but it’s only one egg in JW’s basket of exciting directions we can
Government grant to get shipbuilding apprentiships going and green energy ??
Loosegoose In relation to your 15.01 post as far as Islandmagee is concerned the largest problem is NOT the Marine License but the funding. I accept that the is an agreement that means all the gas to be stored has been sold off as I understand it. Normally that would make funding easy as there is a clear revenue stream. However, if any investment is from a foreign investor either individual or corporation the maximum they can invest without a statutory referral to the Secretary of State is 24%. The statutory referral provisions of the National Security and Investment Bill which is currently in the Lords applies both to assets and takeover. The statutory referral would add around three months to the process.
So even if we get a decision next week, and remember it was only the recommendation going to the Minister that has to be by 31 March, we are looking at potential the end of Q3 before any construction work can start. I am not sure how long the construction phase is but we are looking at possibly 2023 before Islandmagee would be operational. That being the case other revenue streams will be needed in the interim for INFA to remain viable.
Here are my views on some earlier comments on whether the gas storage is important or not. The gas storage project is not important for the survival of INFA. INFA has moved away from being a single project company as JW always said in the strategy. The gas storage project is maximum 8 days away from a DAERA recommendation and which ever way it goes, that is the closest we have ever been. Given that the project NPV at an 8% discount rate is 222m, I would say that it is important. To be able to sell off an equity stake, get some cash to invest in the H&W assets and accelerate expansion of capabilities without cash flow limitations would be massive for INFA. I would fight like a dog for any project worth 222m. T minus 8 days and counting.
Storey.fair points although I don't agree with your perception that the gas cavern project isn't important to infa.The company would have put the project on hold if they didn't think it was likely to go ahead and it's my belief that work on the project has ramped up which fits with the hiring of a manager on the project.It will be interesting to see what happens in the next month with the ML and how quick the NI government are to give it the go ahead.
I must admit the people of Norther Ireland Have not been represented by their MP's, Which is a total disgrace.
On the strategy I would assume there is enough ships to keep all yards going and like the point made about collaboration.
Chitta123 In relation to your 14.00 post on page 90/91 of the Industrial Strategy it states 'The sustainable shipbuilding pipeline approach also allows UK industry to develop a highly skilled workforce to meet the demand, in turn boosting the
productivity and efficiency of the industry, for the benefit of Defence and making the industry more competitive in export
markets. The first step on this journey is the Fleet Solid Support programme (three ships).
But the pipeline will also include:' This would seem to imply that the FSS programme of three ships is in the near term. Also, it may not be subject to a procurement but may be a direct award. Therefore, I think the defence work may come in sooner than you think as the new research vessel is intended to come into service in 2024. We will have to agree to differ on the importance of the Islandmagee project as I am of the view that if there is any further delay or it does not go ahead INFA would not be critically affected.
Being realistic I think defence contracts are in the medium term.The wind farm projects look closer and the two ships we are expected to hear more about before H1 concludes.A conclusion on the Gas caverns is important more than ever in my opinion.
And that in itself speaks volumes Stokey. I have no doubt if an NI wished to forward a question they would have been rostered
Jabido In relation to your 13.30 post that is probably because there are no DUP MPs on the order paper to ask a question.
So far I count 5 Snp mp's passing comment about Scottish shipbuilding! Zero dup