Harland & Wolff Group Holdings PLC (AIM:HARL) shares crumpled almost 11% to 13.62p after the Belfast shipbuilder reported a 78% increase in losses for the first half of the year, but reiterated guidance for the full year.
Revenues increased 65% to £25.53 million for the six months to 30 June but net losses grew to £31.5 million from £17.7million as it invested in personnel and general overheads to service its growing workload.
Financing costs increased as net debt swelled more than fourfold to £88.53 million, with negotiations said to be “advanced” over a new £200 million credit facility along with the UK Export Finance (UKEF) guarantee.
Chief executive John Wood said the company had its “foot hard on the pedal” to deliver its contracted order backlog that hit £1 billion, reporting that trading remains on track to achieve full year revenues of £100 million as the defence sector FSS and M55 contracts step up significantly in the second half of the year.
Guidance for revenue to double in 2024 to £200 million was also restated.
The FSS contract is with Navantia-led consortium to provide the UK Royal Navy’s future Fleet Solid Support (FSS) warships
“The award this year of the FSS contract provides a substantial baseload over the next five years and will result in a transformation at Belfast which will become one the most modern shipyards from both a national and global perspective,” said Wood.
“Its facilities - as well as the group's skill base - are already attracting global clients especially with large and complex vessels dry docking in the Belfast Dock, demonstrated by both orders won and those in the pipeline.”
He said the worst of the inflationary effects “appear now to be behind us”, and the company looks forward to increasing profit margins as it builds out its order book.
“We have our foot hard on the pedal and are intent on delivering the goals we have laid out. It is full steam ahead at Harland and Wolff."