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(Alliance News) - Harland & Wolff Group Holdings PLC on Wednesday said it is delivering a vessel to the Lithuanian Navy after winning a contract from the UK's defence equipment sales authority, part of the Ministry of Defence.
The contract, worth GBP55 million, is part of the M55 Regeneration Project between the UK and Lithuania, started in June 2020. This aims to expand the military capabilities of Lithuania.
On behalf of the Lithuanian Defence Materiel Agency, Harland will deliver a regenerated vessel to the Lithuanian Navy.
Harland & Wolff shares jumped 26% to 15.55 pence each in London on Wednesday morning.
The UK Ministry of Defence, land equipment, defence equipment sales authority, or DESA, is the contracting authority between Harland and the Ministry of National Defence of Lithuania.
It is Harland's first contract within the defence sector, the Belfast-based offshore construction company said. The contract is set to begin in August and complete within 18 to 24 months.
The agreement will bring the company a constant revenue stream throughout 2024, as payment will be spread across the current and the upcoming two financial years. "The contract underpins the company's financial year 2022 and financial year 2023 revenues, with margins also in line with management expectations," Harland explained. The company's financial year is the calendar year.
Harland sees itself on track to its medium-term goal of GBP500 million turnover per year. In May, it said it expected 2022 revenue to be around GBP65 million to GBP75 million, without mentioning turnover.
"This contract has provided the breakthrough that we needed to activate our fifth and final key market of defence. Our strategy has been well and truly validated and we intend to capitalise on this win through bidding on and securing further government contracts," said Chief Executive Officer John Wood.
By Tom Budszus; tombudszus@alliancenews.com
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