Harland & Wolff sees revenue backlog surge to £900m following series of defence contract wins
- The shipbuilder will help build three support ships for the Royal Fleet Auxiliary
- Last week, it won six maintenance and fabrication contracts worth over £10m
Harland & Wolff has increased its sales backlog to £900million after building upon its gigantic warship programme deal with further defence contract wins.
The shipbuilder recently gained a £1.6billion contract as part of the Team Resolute consortium, which also comprises consultancy BMT and Spain’s state-owned Navantia, to help manufacture three support ships for the Royal Fleet Auxiliary.
It expects to create another 1,200 jobs at its historic Appledore and Belfast shipyards and earn about £700million to £800million in overall revenue from the deal.
Deal: Harland & Wolff recently gained a £1.6billion contract as part of the Team Resolute consortium to help manufacture three support ships for the Royal Fleet Auxiliary
Following the successful execution of that contract, the company secured multiple additional deals, including six contracts across the defence, cruise and ferry and commercial fabrication markets worth over £10million last week.
Harland & Wolff now has a confirmed contracted revenue backlog of £900million for seven years, with more than 80 per cent of this represented by the Fleet Solid Support contract.
Alongside this, the firm has a weighted pipeline of new business worth £3.6billion that, based on its current win ratio, gives it a projected backlog of £1.24billion.
The maritime engineer said it currently has two dozen enquiries for cruise ship work, having won contracts last year to maintain Cunard’s Queen Victoria and P&O Cruises’ Aurora ship, its first cruise liner work in two decades.
It is also receiving interest from cross-Channel ferry operators and eyeing multi-year defence contracts worth more than £300million.
John Wood, the company’s chief executive, said: ‘It is gratifying to see the levels of activity that are already present in all of our yards, with the knowledge that this is only going to increase steadily – and materially – from this point.
‘The Harland and Wolff machine is really starting to hum, and our ability to operate flexibly across multiple facilities will become increasingly important as an industry differentiator as our workload expands. We look forward to the future with increasing confidence.’
For 2023, the company is targeting sales of £100million to £115million, followed by £200million to £230million the following year, when it also expects to break even on cash flow.
On Wednesday, the business also announced it had successfully enlarged its debt facility with Riverstone Credit Partners by another $25million.
It sought amendments to its debt payments in order to enhance working capital provisions whilst finalising a £200million refinancing package with UK Export Finance and Astra Asset Management.
Harland & Wolff shares were 2.1 per cent higher at 17.1p when trading closed on Wednesday and have grown by 70 per cent since being named a preferred bidder on the FSS contract in mid-November.