Harland & Wolff suspends shares over accounts delay
The Belfast-based Titanic shipbuilder said it has been in extensive talks with auditors over how to account for revenues of complex contracts.
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Your support makes all the difference.Shipbuilder Harland & Wolff has suspended trading in its shares on the London Stock Exchange after the firm failed to publish its annual results on time.
The Belfast-based company, which owns the historic shipyard where the Titanic was built, said audited accounts were delayed due to ongoing talks with its auditors over how to account for revenues of some of its “multi-year and complex” contracts.
This meant it missed the deadline to publish its results by June 30 and it has therefore temporarily suspended trading of its shares on the Aim market.
Harland & Wolff said: “Given the multi-year and complex nature of some of the contracts under which the company is working, the company has been in extensive discussions with its auditors to agree the method of accounting for revenues throughout the duration of a build programme.”
It said the group has recently agreed on the treatment of revenues with its auditors and aims to publish results next week, at which the point the shares suspension is expected to be lifted.
Our financing costs are high, exacerbated by the rises in the base rate in 2023, and it is crucial to close the UKEF (UK Export Finance) facility as soon as possible in order to provide the stable long-term working capital needed for securing large, multi-year contracts
In unaudited financial results for 2023, released on Monday, it posted a pre-tax loss of £43.1 million, narrowed from losses of £70.8 million in 2022.
Revenues more than trebled to £86.9 million from £27.8 million the previous year.
It comes amid uncertainty over a £200 million government loan guarantee, which has cast doubt over Harland & Wolff’s future.
A report in The Times newspaper in May suggested Chancellor Jeremy Hunt was expected to block a key support package application by the firm, amid an “intense Government row”.
Harland & Wolff group chief executive John Wood insisted at the time that the company’s application “has not been rejected”, and “continues to be a work in progress”.
The group has built up a large debt pile, for which it is facing soaring costs from higher interest rates, and has been under financial pressure for many years.
It was saved from administration five years ago through a deal with energy firm Infrastrata.
Harland & Wolff received a boost when the Team Resolute Consortium it belongs to won the bid to deliver three fleet solid support (FSS) ships for the Royal Fleet Auxiliary.
It has applied to the Government’s Export Development Guarantee scheme for support.
The scheme usually covers up to 80% of the risk to lenders on loans of up to £500 million but Harland & Wolff is asking for a 100% guarantee in its application.
In its unaudited results, group chief finance officer Arun Raman said: “I am highly encouraged by the growth in revenues from 2022 to 2023 as we seek to achieve the critical mass required to get to cash break-even.”
“Our financing costs are high, exacerbated by the rises in the base rate in 2023, and it is crucial to close the UKEF (UK Export Finance) facility as soon as possible in order to provide the stable long-term working capital needed for securing large, multi-year contracts.
“Our engagement with UK Government continues in order to bring this deal to closure.”