Member Info for stokey12

Not a publication I have read before but came across this article https://breakingdefense.com/2024/07/uk-promises-new-era-of-defense-with-launch-of-strategic-review/ I note in the article it says 'Labour added that the review should address “the approach to be taken to acquisition and support in order to deliver the required capabilities in a timely way, and how to secure the best possible value for money and rapidly changing technology.”' That seems to imply that the procurement timespan might be shorten or more use of direct awards.

I have just read this on the BBC website https://www.bbc.co.uk/news/articles/crgmxw7g0veo I feel that unless the government wants to hamstring the review before it starts it would need to keep all existing shipyards functioning to ensure that the capacity exists to build up the Navy to a credibe size as quickly as possible. In the short term this would probably mean shipyards collaborating along the lines of Team UK and Team Resolute. As I see it so long as the majority of the work is done in the UK it does not matter if some parts are done abroad. The key issue is having ships built as quickly and securely as possible. If this means building ships on a collaborative international basis so be it.

Wyndrum ref 18.00 post as I have said under one test of solvency HARL is technically insolvent. That said I do not think that HARL is guilty of the offence of trading while insolvent as it is trading itself out of insolvency. As far as your suggestion that the accounts have been suspended to allow for the IM asset to be revalued is not supported by any known facts or accounting practice that I am aware of. As I said to you previously any change in the value of IM arising out of the NICA judgement would fall into the FY24 accounts and would have no bearing on the FY23 accounts. Furthermore the accounts have not been suspended but trading in the shares of HARL that has been suspended.

Can I correct myself in my 17.14 post I said that Riverfort are the only people who can put HARL into adminstration that is not correct. The other people are Barclays who hold a charge over I think it is the H&W Belfast bank accounts, The Board of Directors and the HARL shareholders. That said I do not see any of those seeking the appointment of an administrator. In any event I am not convninced that the requirements for the appointment of an adminstrator have been met.

Vectors ref 17.07 post the value of the FSS contract is circa £750m so on a 20% margin that would give a gross profit of £150m. That would on a P/E of 2 give you £300m unless I have miscalculated or misunderstood how the P/E works.

Wyndrum ref 16.17 post that presumes that HARL goes into adminstration. As far as I am aware the only people who can put HARL into adminstration is Riverstone who can only do this if it defaults on its loan.

Tonyh1975 ref 12.56 post. If we apply your logic all guarantees under the Export Development Guarantee scheme is a bailout. In which case if HARL fulfills the requirements there is no reason for it not to give the guarantee as all applkcantw have to be treated the same. I would also reiterate what has been said repeatedly what is being provided by UKEF isa guarantee. No money is being provided by the UKEF the money is being provided by a consortium of banks who will be lending the money. If I can dispose of the subsidy point. The guarantee fails as a subsidy as the actual loan is being provided by the banks and crucially unlke with a business startup loan the loan in tis case is at a commercial rate.

Scaffman ref 12.18 post Yes it was the same auditors. As far as the NEDs are concerned Ido not have any names not sure if Lottie123 does.

Scaffman ref 11.53 post On the 29th June, see 29 June 2022 RNS, a three month extension was granted to file the accounts for the 17 month period ending 31 December 2021. The accounts were filed in mid August 2022.

It looks like the AGM will be in September as three weeks notice of the AGM needs to be given. I think it was Lottie123 who raised the possibility of a vote of no confidence in JW and AR. At the time I was against such a move but as matters have gone I am getting concerned on two points. Firstly, this is the second time in four years that we have delayed accounts and I am not seeing anyone accepting responsibility for this latest ocassion. As Si_Derman I think it was who has pointed out we were told in November about this issue and seven months later it is still not fully resolved. Secondly, there is the issue of trust. I am not sure that the markets have any trust or confidence in HARL management to do what they say will do and that is I believe feeding through to the share price. As and when trading is lifted I would expect a modest increase in the share price. However, unlike Xenor I do not believe we will see a sustained increase in the share price even if the finance is sorted out unless the market has confidence in the BoD. As I see it we need to either change the auditor assuming that they are responsible for both ocassions of late filing of the accounts. The alternative is a shake up of the board to increase the number of NEDs or at any rate have NEDs that will give real challenge to the Executive Directors.

Selangore ref 09.54 post if like me you take the view that the guarantee is not a subsidy for the reasons that I have previously said I do not think article 10 would apply. I note that the Treasury officials seem to be at odds with colleagues from other departments who were in favour of giving the guarantee.

Mimbrit ref 09.11 post thanks for this. It would seem that the Treasury is the only department with an interest in this matter that is opposed to the giving of a guarantee. It is worth noting that HARL's registered office is in London, so the EU state aid rules would not apply. The Belfast site is just one of the sites that HARL operates. I am of the view that this is acase where a minsterial direction could and should be given.

Si_Derman ref 07.12 post I think the RNS is referrig to internal quality control processes within the auditors. It does however beg the question why this was not factored in when advising of when the accounts would be published.

Looks like it will be another week or so before the accounts will be published as they are undergoing final audit partner review.

Wyndrum ref 13.37 post I disagree with your assessment in relation to IM. As at 31 December 2022 IM had a book value of circa £10.5m, (See Note 13 to the accounts for the year to 31 December 2022). I do not believe the book value would be very different as at 31 December 2023. As the accounts are made up to 31 December 2023 any effect on the book value of the NICA judgement would fall to be included in the accounts for the year to 31 December 2024 and has no bearing to the accounts for the 31 December 2023. I would observe that the auditors while they did give an opinion that there was a material uncertainty as to whether HARL could remain a going concern they did go on to say in the next sentence that it was their opinion that the use of the going concern basis of preparing the accounts was appropriate.

On your point about about whether HARL is insolvent based on at least one measure of insolvency HARL is insolvent. That said the question is can they trade themself out of insolvency. I would say on the current evidence the answer is yes.

Phillip1976 ref 09.18 post when the suspension is lifted if the auditted accounts are similar to the unauditted accounts then going by the share trades on the 28 June I would expect the share price to open up or flat. I say this as going into the close there was a lot of buys so it looked like people were trying to buy shares in anticipation of the results. The caveat to this is that the failure to file auditted accounts may have scared soe people off.

LWHL ref 20.31 post I do not dispute anythig tthen depending on the anticipated rethat you say I just have a different interpretation on the matter of the guarantee. My view is that if the current government wants to create a Defence Industrial Strategy that staisfies all the devolved nations and ensures that each devolved nation is sure that they are getting a fair share of defence spending that needs HARL to remain a going concern. If that means taking a risk on advancing a 100% guarantee to HARL then the government might think it is worth taking. The amount of the guarantee is well within the average size of such a guarantee. Hopefully we will see who is right soon.

Hebridean9 ref 20.27 post My19.22 post which was in repsonse to LWHL's 19.05 post did not disagree with his opening sentence about the absence of any statement updating the market about the auditted accounts. It only disagreed with him in relation to the comments in relation to the guarantee. For the avoidance of doubt I am in agreem,ent with both LWHL and broomtree with regards to communication or more accurately the lack of communication around the production of auditted accounts. That said I donot think the issues with the accounts has any impact on the provision of the guarantee. I say this because the state of the accounts would have in all probability been known when the Minister gave his permission for the negotiations to proceed on the basis of a 100% guarantee. Any risk of default would be reflected in the % amount over SONIA rate.

In relation to what you said about the accounts and whhat they will show. If you were right then that would mean that JW had permitted materially inaccurate information to be given in the 1 July RNS. In that RNS it stated :

· Revenues of £86.91 million (2022: £27.75 million)

· Operating loss of £24.71 million (2022: £58.51 million)

· Loss of £43.08 million (2022: £70.80 million)

So revenues were up on the year before, both the operating loss and the net loss were down significantly on the year before. How is this worse than expected if anything they are better than expected.

LWHL ref 19.05 post I disagree with you on the point about a UKEF guarantee which is not a bailout regardless of what the press says. With Boeing buying Spirit Aerosystems it would not look good if another major employer in Northern Ireland was to have difficulties caused by inaction. Also it would cause issues with the Defence Industrial Strategy as well as making it harder to increase defence spending in Northern Ireland.

The AGM is now going to be in August at the earliest more likely with August being a holiday month September. I am cntemplating asking some pointed questions if Ican make it.

Interesting thread on twitter https://x.com/Gabriel64869839/status/1811499817849311426

I fully expect the NICA to deny the application for permission to appeal to the Supreme Court requiring a Petition for Leave to Appeal to the Supreme Court to be Supreme Court. Hopefully they will apply for expedition of the hearing of the appeal. I note that the Minister appears to have recieved the support of his executive colleagues to make this application.