Member Info for mcadder

Harland & Wolff draws $15m from Riverstone facility, acquires Appledore assets
Vox Newswire
10:18, 27th October 2022

........View from Vox
This is a significant milestone for Harland. The acquisition of Appledore's assets will consolidate Harland's military industrial business e.g. the £55m M55 Regeneration Programme contract, and the acquisition of HMS Atherstone from the MOD. The extra cash afforded by Riverstone's accordion facility will ensure the company remains well-funded to execute on its £100m backlog of contracts going into 2023.

Despite inflationary pressures, Harland delivered 22% gross margin in 1H22 as forecast, tripled revenues, and nearly tripled gross profit. The company is looking at a busy 4Q22 and FY23 with the aforementioned £100m forward backlog position expected to convert to revenues in the near term.

With a series of contract announcements made post-1H, Harland's revenues this year will be weighted towards 3Q and 4Q. The company is already seeing a material increase in revenues from projects that were contracted at the beginning of 3Q22. In addition, 4Q22 is the beginning of the peak cruise and ferry repair season, and Harland already has a number of repair contracts in place.

Harland should comfortably reach its goal of £65-75m of revenues in FY22.

Harland now has a significant presence in defence, energy, renewables, and cruise ship maintenance, with an estimated £1.2bn of opportunities across these markets. Harland's reputation in the defence field continues to grow, following the signing of the £55m M55 Regeneration Programme contract in July. Payments from that contract will be spread across FY22, FY23, and FY24.

The ongoing geopolitical upheaval in Ukraine has focused the Government's attention on boosting the UK's defence capabilities, with a growing cross-party desire to boost the country's sovereign capabilities for shipbuilding. Additionally, the Ukraine crisis has highlighted the need for self-reliance with regards to gas production. Harland is increasingly involved in both of these sectors, and continues to make inroads in wind energy as well.

Looking ahead, Harland sees potential revenues of £100-115m in FY23. At £200m turnover and above, the company expects to be in a position to initiate returns to shareholders.

Iamsailing

Posted in: HARL
Posts: 93
Price: 5.65

RE: Just been offered14 Oct 2022 10:04

"This could all unravel very quickly now, as Rivertone will need to ringfence their collateral for the $70mln+ before too many more liabilities and costs rack up. No clued-up client is going to make any advance payments to them now."

Looks like you were wrong on that point.....Riverstone obviously don't agree with you :))

"the yards, as managed by John Wood, are therefore generously valued at minus £5mln"

Yeah ok lol

So projected revenues of £65-75M for this year alone, profit by Q1 2023, projected revenue so far for next year already £100M and there is the prospect with the FSS contract of either £600M of work if Team Resolute win or £100-200M of work if the other remaining bidder Team UK win..... that and all the investment made to bring the yards into the 21st century and you're conclusion is that the yards are valued at minus £5M.... keep smoking that weed lol

I would agree Lottie - massive vote of confidence by bringing outstanding payment of Appledore forward.
Let's not forget that shortly after the debt facility was announced the SP was trading at nearly 20p, so the value on offer right now is simply astounding. Like I said the other day when you look at the current Mcap just £4.5M is being attributed to the gas storage project and just £4.5M for all yards! That's purely bonkers imo.
Look out for those contracts now..... ;))

Thanks Stokey that certainly makes sense and at least it's out the way. No more outstanding payments for Appledore now....

Consuela the ML was granted by Poots so it became "shovel ready" at that point. Unless the judge upholds the JR challenge (which is very doubtful) then it will remain "shovel ready" :))

With the current and projected revenue's here plus the icing on the cake that is the FSS contract should it land, it's looking really good here for once and people know how critical I've been of Harl in the past.
Also the fact Riverstone have agreed to the release of further funds to make it happen shows confidence. Pre-cursor to further contracts imo :))

So not long to wait now Chrisatrdg :))

https://www.thejournal.ie/analysis-energy-security-review-5903446-Oct2022

TheJournal.ie

Analysis: Energy insecurity and our fracking future
The Irish Academy of Engineering has said the government’s report on Ireland’s energy security is “seriously flawed”.

21 minutes ago

“UNSUITABLE”, “SERIOUSLY FLAWED” and “entirely unrealistic” are just some of the words that have been used by the Irish Academy of Engineering to describe the government’s energy security report to ensure that the country will have enough electricity and gas to meet its needs in the coming years"........

........."The IAE said that “by 2030, the Corrib field is likely to be fully depleted”, which would leave Ireland solely dependent on fuel imports needed to generate electricity being delivered via a pipeline from Moffat in Scotland."

"The IAE also said that any interruption to the supply from Scotland could shut down the country’s gas network, “and possibly much of the Irish economy”, in just 20 minutes"......

“We have declared a climate emergency in Ireland, there is a war in Europe, and an associated energy crisis, yet the pace of energy infrastructure delivery and action in Ireland is at odds with these emergencies,” he said. LOL

Plenty of talk in that article about the prospect of an LNG terminal, which would be probably years away, as would re-opening Kinsale for storage of gas but that would also be years away. LNG would only provide 4 days supply, Islandmagee is basically ready to go once JR is done and dusted and would provide 14 days supply for starters, be safe and secure and fast cycle response - clearly the best option by far out of all three.
They talk about the pace of energy infrastructure delivery and action being at odds with the energy emergency LOL.... the nimby's can take blame for preventing critical infrastructure from being constructed over in N.I so far but, better late than never hey :))

Well specifically I know there has been an awful lot of discussion at government level re the Shipbuilding Credit Guarantee Scheme (HSCGS) recently and this would remove any uncertainty for someone like Harland and Wolff when it comes to landing and delivering on a large MOD contract....

"will give UK shipyards access to finance for underwriting domestic contracts. This will level the playing field with competitors' export credit guarantees and ensure UK shipbuilders have a fairer chance of securing valuable contracts." :))

"We might be breaking 6p soon"

Looking that way Maqsood, gla

The biggie we are waiting for is the long awaited FSS MOD contract (Fleet Solid Support vessels, 3 in total) worth £1.6Bn.
The procurement stage has been ongoing since 2020, there were 4 bidders, 2 dropped out leaving just us Team Resolute (Harland and Wolff and Navantia consortium) and Team UK in the running.
But whoever wins we will get a share of contracts likely over £100M if it goes to Team UK or if we win the work will be worth around £600M.
Team Resolute look to be favourite for some of the reasons I've already outlined previously....

Don't know what just happened there lottie but the bid just jumped to 5.9p and buy 6p..... :))

I wouldn't worry too much lottie, still buys coming in this morning, just usual SP shenanigans - whether we see a delayed sell or not later remains to be seen but, this is definitely right in the buy zone now and I think you're 100k buy yesterday may turn out to be quite a wise move imo....

Re-appointed Wallace has said military spending must rise
Gavin Cordon, PA Whitehall Editor
25 October 2022, 20:54

Defence Secretary Ben Wallace has been adamant that spending on Britain’s armed forces must rise in the face of the growing threat from countries like Russia and China.

Mr Wallace, who retains his position in Rishi Sunak’s new administration, successfully secured commitments to increase the defence budget under both Boris Johnson and Liz Truss.

Mr Johnson initially agreed to raise it to 2.5% of national income by the end of the decade – compared to the Nato minimum of 2% – a commitment Ms Truss subsequently lifted to 3%.....

'Technically' Consuela this project became shovel ready the minute Poots granted the full ML last October, we just have a little thing called the JR to get out the way which will be another opportunity to show case the asset to the world's press.
For that Consuela we thank you and we also thank you for helping to make the project triple in value by pushing this back another 12 months :))
Once the JR is dealt with there will 'technically' be 2,000 shovels ready ;))) .....

"expected to create at least 400 direct and 1,600 indirect jobs during the construction phase"

John Wood - 4d ago - Islandmagee

"Three years ago I stated the lights would go out if our Islandmagee gas storage project was not built, this looks like it will unfortunately become a reality. A modern quick cycle store that and can switch from filling to withdrawing in under an hour. The rest of Europe have over 25% gas in storage we have less than 2%. Now is the time to get this shovel ready project built so we can get energy prices under control once and for all".

3d ago - Arnish

"Arnish is our hidden gem that seeks out and finds fabrication projects across the globe having now undertaken/ undertaken projects for Greenland, Red Sea and the North Sea to mention a few. Whilst working on marine, renewable, oil and gas and nuclear projects. The momentum continues to build".

I remember him saying that maqsood. I also recall him saying that he would step down if there was no commitment to stick to increasing defence spending to 3% of our GDP, so on that basis, the fact he has remained gives some confidence.
He has also been looking at the bids for the FSS contract and this should mean no delay in getting to find out who the preferred bidder is which, as we know, will be good news for us either way. Fingers crossed it's great news and Team Resolute get it. I mean it's only worth £600M for us if they do! :)))

Ben Wallace has remained as Secretary of State for Defence.

Perhaps that means the commitment to commit 3% GDP of spending to Defence by 2030 is still there? I know Mr Wallace had threatened to step down if not....

In terms of current value here it's worth noting the following:-

In 2008, when Egdon demerged the gas storage project and listed it on AIM in Jan 2008 as Infrastrata (INFA) there were approx 68M shares in issue with the SP fluctuating between about £3.40p a share to just £1 by Nov 2009.
That's an Mcap of between £231.2M and £68M

Fast forward to the present day, there are now 162M shares (but this is following a 100-1 consolidation in 2020 which took the shares in issue from around 8Bn to 80M and doubled again to the present day of 162M and a current SP of 5.75p.
Last year shortly after the ML was issued in full the shares were trading at around 30p with roughly 121M shares.
That's an Mcap of around £36.5M.
The last equity raise was in Nov 2021 at 20p, where around 40M extra shares were added meant that the Mcap was them around £32.4M

We are currently at £9Mcap, so even with the debt facility, given that breakeven and first profit is due in just Q1 2023, given that we are on the cusp of further MOD work (significant £600M work if Team Resolute win), plus potential for other fabrication and wind contracts as well as a decision due on Islandmagee just next month, it's clear to see that there is potential significant value now.
Unfortunately anyone right now that tries to put a positive spin on the company will be accused of ramping by disgruntled current and ex shareholders who are in way above the current SP which is understandable, BUT I'd say right now that we are right at the bottom of the upward value curve.
Basically if we split Islandmagee and the shipyards 50/50 then we are only attributing £4.5M value to the gas storage project (even though this has tripled in value just this year) and just £4.5M to the shipyards. Given the current and projected revenues for the shipyard there is a huge disconnect even with $35M of the first tranche having been drawn down to get us into the strong position we are now in.....

Plus with the tightening on public spending on the horizon our bid will be more favourable because it is not substantially over budget like the Team UK one is believed to be..... :)))