Harland & Wolff Share Discussion Threads

[supearich] 23/4/2024 19:32

Christ !!! All I said (a few weeks ago) was how odd it was that this 'technically insolvent' Business hadn't been declared Bankrupt for a whole year... and the flood-gates opened !!

[xenor] 23/4/2024 16:06

At least that's something we can both agree on. I am annoyed too at how long this is taking. All signs point to it being imminent, but it has felt that way for a while now.I'm comfortable with the 77m investment, I just don't have sources in front of me to give you. Maybe someone else will.https://www.motorship.com/ships-and-yards/investment-flow-starts-at-belfast-yard/1488254.articleThis mentions what the funding is for, but not where it comes from. Some of the money is also being spent up skilling staff so I don't expect 77m to magically appear on the balance sheet as an asset.Besides, for me it's irrelevant as the value of the assets only come into the equation if the company goes bust or is bought out. One would also hope it would factor into the share price but this is AIM. What I care about is securing the finances as that's the deterrent to investing for most people.

[loglorry1] 23/4/2024 15:36

I'm reasonably relaxed but a bit annoyed it is taking so long.

If I sound shirty with you it's because you accuse me of not doing any research because I'm missing a £77m on the balance sheet that turns out to be something you heard JW say on a video but can't find now. The fact the accounts don't show it doesn't seem to bother you!

Good luck.

[xenor] 23/4/2024 14:54

Believe what you like Loglorry. It is important for each to do their own research and put their money where they think it will pay off. In your case it's betting against so you will read the facts in a way that justifies your bet. Time will tell. I am relaxed with my long, you don't come across very relaxed with your short.

[xenor] 23/4/2024 14:51

I actually rarely post on here Datos, as it's the same three or so people moaning constantly about the same things, just been active this psst week. Hardly locked in. I'm in profit at this level. I was lucky enough to get in sub 6p before FSS, but admittedly averaged up at silly prices.

[loglorry1] 23/4/2024 14:41

"It may have been in one of the video interviews from last year."

LOL! Given that lies that flow from John Wood's mouth why are you surprised to have been duped by his random statements?

I'll trust the accounts and the RNSs rather than just John woods tweets and podcasts where he frankly makes stuff up. c.f. Bank debt term sheets on his desk.

[datos] 23/4/2024 14:18

Xenor, your on these boards night and day, I thought you would know that.

Locked in and you can't get out, another Smart Alec

[xenor] 23/4/2024 13:30

Part of the problem with this share is the information is all over the place. I remember seeing a breakdown somewhere of where the 77m was coming from but I can't remember where. It may have been in one of the video interviews from last year.

[datos] 23/4/2024 12:29

There was a video clip at the time of one of the guys getting trained up on it, their old profiling equipment wasn’t up to speed

[loglorry1] 23/4/2024 11:56

If they bought it 2 years ago it would be on the balance sheet that Xenor claimed was out of date to the tune of £77m.

[datos] 23/4/2024 10:47

Yes they have bought some advanced plate cutting equipment about two years ago for the Belfast yard. I forget the make model no which can give you an idea of what can be performed. A breakdown of all major equipment would be useful.

[loglorry1] 22/4/2024 18:46

I've just scrolled back through the Harl twitter feed and there's not a single pic of "advanced robotic and autonomous equipment".

I suspect it doesn't exist because Harl haven't bought it because they can't finance the cost of it.

I suppose they might therefore be starting a bit late on the FSS contract that requires it?

I'm more than happy to be corrected but I see no evidence of that level of capx investment in the Belfast yard.

[1alfi] 22/4/2024 16:43

01 February 2023
Execution of the Fleet Solid Support Programme ("FSS" or "Programme") Subcontract

"Full scale fabrication is due to commence in 2025 with the vessels due to be delivered to meet the MOD's objective to bring three ships into service by 2032. However, the Company expects to generate approximately GBP25 million in revenues from pre-fabrication works in 2023, and a similar sum in 2024. The Programme's gross margins are expected to maintain the Group's previously advised overall blended gross margins.

The Belfast and Appledore facilities will benefit from a GBP77 million capital investment programme ("Recapitalisation Plan") during the next 24 months., In Belfast, an extension to the fabrication halls will be undertaken to facilitate a highly dynamic material and sub-structure production flow along with a highly efficient manufacturing and production process. Investments will be made in technologically advanced robotic and autonomous equipment that includes material movement, marking, plate cutting, panel lines and robotic welding. In addition, new larger paint buildings will be constructed to facilitate larger and more efficient block painting. The investments in this site will ensure that the Company has one of the most technologically advanced marine fabrication facilities in the United Kingdom with the latest state-of-the-art machinery and production flows. Appledore will benefit from upgrades to the shipyard roof along with investments in additional automated machinery that includes the relocation of the existing micro panel line from Belfast."

[mecheng1] 22/4/2024 14:11

In Belfast today. Had a walk up past HW. They had Samson out lowering a large new sub-assembly onto that Canadian boat they are retrofitting. Spectacular sight. The place seems to be buzzing. If they keep delivering on their work schedules, it could be very positive.

[loglorry1] 22/4/2024 14:03

More on the £77m here hxxps://www.harland-wolff.com/news/work-begins-to-upgrade-harland-wolffs-historic-belfast-shipyard/. It's not clear who it is coming from and the contract looks like its been awarded to a third party private company "Cleary Contracting, a local building company established in 1983".

How that relates to HARLs balance sheet is a mystery to me but I'm pretty sure you wont' be able to strike off £77m of net liabilities.

[millennialinvestor] 22/4/2024 13:47

JakNife, looks like there is "werethereisawill syndrome" in here.

[xenor] 22/4/2024 13:43

Yeah let's do that JakNife. I'm sure we both have better things to do than spend our day going over this again and again! Neither of us are going to convince the other. Let the RNS do the talking when it comes, and hopefully whoever gets it wrong doesn't lose too much.Loglorry, I would have to go digging again for information on the 77m investment but it was separate to the revenue.

[loglorry1] 22/4/2024 13:22

My retail mortgage is lower than the value of a banana. Does that help?

[jaknife] 22/4/2024 12:50

Xenor,

You're comparing a corporate loan with a retail mortgage. You might just as well compare it with a banana! As noted: "I have yet to convince you" and, FWIW, I accept that I may never convince you!

Shall we revert to where we were of simply waiting for Johnnie lad to announce a refinancing? I say "not a hope in hell" (and have done for a long time), you say that you have complete faith in John to deliver. Tempus veritas!

JakNife

[loglorry1] 22/4/2024 12:43

Forgive me for not conducting research using social media posts!

IF the £77m capex spend was being "funded" as part of the FSS deal (part of the revenue recieved?) then it would not be recorded on HARL's balance sheet improving their balance sheet position but instead it would be part of revenue received. However we know that's not the case because in the RNS it states

"the Company is evaluating a number of different financing mechanisms, including long-term asset financing..."

Since none of these financing mechanisms have been RNS'd we can only conclude that they have not happened.

If the £77m was a pre-payment as part of the contract as you suggest a) it wouldn't need financing so can't be and b) it's part of the contract value and we know even given estimated revenues HARL is loss making.

So which is it?

I have seen the odd HARL tweet here and there but I've not concluded someone has given them £77m from these photos as part of a pre-payment, grant, loan or other.

[xenor] 22/4/2024 12:35

Loglorry that post just smells of having done no research (or very little) on the company and taking out a short because someone told you it is a good idea. At least JakNife acts like he knows the company!The 77m investment is not being funded by HARL, it's part of the FSS deal. We know some of the works have started as social media updates have shown us building works and machine orders. It didn't warrant an RNS because the investment was already announced to the market.

[xenor] 22/4/2024 12:32

JakNife, it's no secret that the company isn't servicing the current debt. As you say interest is being added rather than paid. I suspect this won't be the case under the nee deal as banks won't sign up for that.As for the bank not lending money to pay off another loan, that's nonsense. It is common practice. If I have a mortgage with HSBC and my 5 year fix comes to an end I would look for the best deal and possibly remortgage with a different bank. That bank is then lending me money ro pay off the HSBC debt. It's no different from refinancing a business loan, just more complex.

[loglorry1] 22/4/2024 12:24

Xenor I think the £77m you refer to is from this :

"As part of the £77m FSS Recapitalisation Plan over the next 24 months, alongside other capital expenditure requirements in the medium term, the Company is evaluating a number of different financing mechanisms, including long-term asset financing, in order to achieve a balanced capital structure for the Company's further development."

1/3/2023

Although I've not seen a further update my interpretation of this is that HARL are saying they need to spend £77m upgrading their sites for the FSS contract over the next 2 years.

They have neither a) RNS'd that they have spent this b) RNS'd that they are able to borrow this c) RNS'd that they have any other way to finance this so unless there is a magic money tree in Belfast they won't have spent it and it won't be on their balance sheet.

[jaknife] 22/4/2024 11:36

Xenor,

"I don't have a problem with the debt. What matters to me is whether thst debt can be serviced."

What do you think that it means to "service" a debt? I would offer two sensible options:

1. Repay the interest as it falls due and an element of the capital, such that the entire loan is repaid by the maturity date.

2. Repay the interest as it falls due and the entire capital on the maturity date.

HARL meets neither definition, in particular HARL can't even pay the interest and hence has to add the interest to the principal (aka "PIK" the interest, where "PIK" means Pay in Kind). Hence the debt just gets bigger (at 15% per annum I believe).

If you search online you will find that there is an investment concept known as the "debt-service coverage ratio", eg:



In the case of HARL this is a negative number, implying that HARL cannot service its debt.

I write the above because I thought that it was accepted common ground that HARL CANNOT "service" its debts!? Indeed HARL needs another lender to lend money to it so that HARL can then pay off Riverstone. That is nothing like "servicing" the debt!

I have yet to convince you that lending money to a client so that the client can then to pay off another bank is a complete anathema to the sensible banker. But I live in hope!

JakNife

[loglorry1] 22/4/2024 11:24

I have admitted that I don't know why they've not run out of cash yet. I guess Jak might have a theory.

But more importantly are you saying that the assets will have increased by at least £77m because someone (who?) has provided capex to the tune of £77m in them and assigned that investment to HARL? I must be missing something because I've seen no such news where the company has received a £77m "grant".