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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Harland & Wolff Group Holdings Plc | HARL | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
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|---|---|---|---|---|
| 0.25 | 1.96% | 13.00 | 09:00:01 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 12.75 | 12.75 | 13.00 | 12.75 |
| Industry Sector |
|---|
| GAS WATER & UTILITIES |
| Top Posts |
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Posted at 22/4/2024 12:43 by loglorry1 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. |
Posted at 22/4/2024 11:36 by jaknife 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 |
Posted at 22/4/2024 09:50 by jaknife Keepdigging,"Simple maths, yards cost over £14MM, investment from FSS contract £77MM, equip bought by Harl to conduct BAU unknown,five vessels, new Marine arm costs unknown, Aqua Jet renamed Atlantic Wolff, costs unknown,Island Magee value estimated minimum £30MM without marine licence, win this appeal and end of the road for FOE & assest price flies North." I invite you to actually look at the accounts (it's a novelty I know!): The total fixed assets are £56.8m of which £12.6m are intangibles and £17.6m are subject to lease; hence, whilst you write the above, the accounts only actually show £26.7m of "investment". Indeed, if you look really closely you will find the "Shareholders' funds" section and see that "total equity" (ie that amount that the accounts suggest would be left over for shareholders after all the liabilities are repaid) is negative to the tune of £79.9m. So the point is that you claim lots of "investment" but the reality of the matter is that the accounts show an immaterial number for "investment" and then show a surfeit of liabilities relative to assets. So fundamentally there is a black hole at the centre of HARL's balance sheet equal to £80m. And that black hole keeps on getting bigger because HARL is (a) making losses, and (b) forecast to continue to make losses. * HARL's own broker (and nomad), Cavendish, forecast that HARL made a further loss in H2 of 2023 of £14m (full-year forecast loss is £45.5m - H1 loss was £31.5m) and hence the blackhole was c. £94m at the end of 2023. * And Cavendish forecast that HARL will make further losses in the current 2024 year of £23.5m! Hence at the end of 2024 the blackhole will have grown to c. £117m! Pray tell us, what exactly is the "rosy picture" that you want us to see, when we look at HARL's accounts, other than a huge vacuous deep black hole?! JakNife |
Posted at 21/4/2024 10:05 by loglorry1 Xenon I agree Riverstone won't do anything because they can't. It doesn't help their position by putting HARL into default.What will solicit news is HARL running out of cash. I have to admit I thought that might have happened by now but it hasn't and I can't explain why. I'd be amazed if HARL get the refi done but it's possible. |
Posted at 12/3/2024 09:57 by jaknife millennialinvestor,"JakNife would you say the financial situation here is similar to that of Cineworld?" It's certainly on a par with Cineworld. Cineworld needed a material debt for equity swap in order to free itself from the burden of the excessive debt that it had. There was no sensible scenario under which Cineworld could ever have repaid its debt. But CINE completely wiped out existing shareholders to achieve that and a "New Cineworld" was created where only the former lenders were shareholders. HARL needs a debt for equity swap as well. There's no hope that it might generate the profits/cash to repay the debt and instead management intend to replace the debt burden with an even greater debt burden that HARL still won't be able to repay. That doesn't make sense, what HARL really needs is a debt for equity swap to remove the burden of its excessive debt. However, I can't imagine a scenario where Riverstone would want to completely eliminate existing shareholders and remove HARL from the UK market in the same manner that CINE did. JakNife |
Posted at 06/3/2024 07:06 by skinny Harland & Wolff Group Holdings plc (AIM: HARL), the UK quoted company focused on strategic infrastructure projects and physical asset lifecycle management, is pleased to announce that it has signed a five-year Master Services Agreement for the fabrication of large structures with a global oil services company supplying subsea infrastructure across the major hydrocarbon basins around the globe.The Company has now received its first purchase order under that agreement to fabricate six subsea structures with a contract value of approximately £3 million. These highly specialised structures are used in oil and gas platforms and the surrounding infrastructure, capable of withstanding pressures of 430 bar (6,235 psi) and as such are mission critical parts. These structures will be built over the next 18 months at the Company's Arnish site in a staged delivery programme with an expected completion date in H1 2025. John Wood, CEO of Harland & Wolff Group Holdings commented: "I am delighted that Arnish is recognised as a centre of excellence to deliver critical subsea infrastructure. This contract marks a significant step for the Company and builds on the highly technical work the yard has already undertaken on suction anchors, piles and the work it is currently performing for the Sea Rose FPSO Contract. These specialised subsea structures are a new product area for Harland & Wolff and we expect that successful delivery of this contract will open up significant opportunities for additional contracts in subsea infrastructure going forward." |
Posted at 05/3/2024 12:08 by jaknife seagreen,"BEN did me proud then the price of coal colapsed no position" And yet you defended BEN and attacked me here: When the BEN share price was a mere 15p. Are you now saying that our BEN debate has finished? That you've changed your mind from what you (rudely) wrote on 1 October? "HZM I had £100 worth and bailed after the last RNS" Let us remove HZM from the scoreboard, I don't like even numbers, this leaves just the three. "The other two are similar in that they have excellent order books and it should not be beyond the bankers to come up with a solution to provide liquidity they are fundamentally good businesses that need tight cost control. In return in all seriousness why are they both winning mega contracts of size if there was a real posibility of them struggling to make ends meet ...just does not make sense to me. I would have thought the risk reward lies with the patient small long position where as if either provides they have liquidity solutions you could lose a packet You seem to be basing a lot of your judgement that the CEO's are not honest and/or the clients are stupid and have not done their DD." Petrofac What is it about Petrofac's $1bn of losses accumulated over the last nine years and the losses that are forecast for 2024 that makes you think that its order book is "excellent"? What is it about the negative tangible book value, looming April bank debt repayment and the company's admission (this am) that it is in negotiations with its banks and bondholders that makes you think that their balance sheet is anything other than a disaster zone? HARL What is it about HARL's track record of losses every year that it's been listed AND the expected losses for 2023 AND the forecast losses for 2024 that makes you think that its order book is "excellent"? What is it about the huge gaping blackhole in HARL's balance sheet, and the fact that it has been in discussions with various banks since November 2022 about refinancing its debt and still hasn't been able to achieve that, which makes you think that HARL's balance sheet is anything other than a nuclear disaster area? I sometimes find it quite incredible that shareholders can't see what is plainly right in front of their eyes! For the moment I will accept that you have conceded defeat on BEN and mark the scorecard at 1-0 with the Petrofac and HARL games yet to finish. JakNife |
Posted at 09/10/2023 07:25 by linesal2 Harland & Wolff Group Holdings PLC Maritime Operations Commencement & Isles of Scilly09/10/2023 7:00am RNS Non-Regulatory TIDMHARL Harland & Wolff Group Holdings PLC 09 October 2023 RNS REACH 9 October 2023 Harland & Wolff Group Holdings plc ("Harland & Wolff" or the "Company") Maritime Operations Commencement & Isles of Scilly Harland & Wolff Group Holdings plc (AIM: HARL), the UK quoted company focused on strategic infrastructure projects and physical asset lifecycle management, provides an update on its proposed strategy regarding the ferry build and operate programme to service the Isles of Scilly, as well as an update on its maritime operations. Update on Maritime Operations As part of the Group's strategy, the Company aims to establish its own marine operations business when it has a critical mass of maritime operation activity. To date, it has been contracting with various organisations to assist with its docking and undocking operations, as well as towing vessels and barges between its yards and for the transportation of materials between its sites. As the Company progresses towards cutting first steel on the FSS Programme in 2025, the demand for such marine operations will only increase as the Company commences moving blocks and major component parts around the different sites. The Directors believe that sub-contracting of marine operations beyond a certain level is inefficient from not only a physical efficiency perspective but also a financial one. The Company is now in the position where significant savings can be made by commencing its own marine operations division. To this end, and as a matter of priority, a tug has been identified to acquire. This tug will have a bollard pull of around seventy-five tonnes and will be utilised internally by the Company in addition to being operated on the spot market when internal demand is low. The spot market for tug hire is highly lucrative, given that demand for tugs far exceeds their supply. The Company expects this tug to be in operation by the end of 2023. For the avoidance of doubt, this tug is in addition to the two green tugs that were announced earlier this year. Isles of Scilly - Proposed Ferry Build & Operate Programme The Directors believe that the Isles of Scilly to Penzance route is significantly underserved by its current operation. The route typically sees a surge of demand in the summer from tourists wishing to take day trips to the island. Furthermore, the ability to move freight across the route is limited by current capacity. Noting also the limited accommodation on the islands, the directors believe that fast transit on and off the islands is essential. Further, the long-term ability to move freight across this route is limited by current capacity. By replacing old for new vessels on a broadly "like for like" basis, the same problems relating to the lack of connectivity and poor freight service will continue to persist. Given the existing state of operations and proposed new plans, both of which are inadequate for the islands' needs, its tourism sector and movement of freight, the Company has identified an opportunity to provide necessary improvements within the Isles of Scilly ferry market through the build and operation of two ferries on the Penzance to Scilly ferry route as well as one inter-island vessel. The Company has been considering the opportunity to build and operate ferries its own right, having spent three years working on and developing its own specific design and costing model for these vessels. The Company sees a significant opportunity to provide upgraded services on this route to all islanders and tourists. Future plans that are currently being proposed to service this route indicate that the new vessels will be built outside the UK and will not utilise any levelling up funding that is available. Instead, commercial debt will be taken with the potential for a steep fare increase to service and repay this loan. Instead, the Company sees an opportunity to utilise levelling up funding of approximately GBP48m that is available to build and operate ferries on this route and, accordingly, a detailed analysis of the market has been undertaken including on-island initial consultations, the outcome of which demonstrates that there is a place in the market for a second operator. The route is currently unregulated and is available for anyone to operate, although a monopoly continues to exist. The Company has had initial discussions with several ports including St Mary's and has received positive feedback that fair and equal access will be provided to any operators wishing to dock in the ports. Fast Ferry Having conducted detailed analysis on the met ocean data and other information, the Company proposes to introduce a new fast ferry service between either Penzance or Newlyn to cover the summer season between May and September, commencing in 2024. This route is around thirty-eight nautical miles depending on the departure port. The Company currently has four vessels that are under evaluation with speeds of up to forty knots depending on weather conditions. The Company's offering will be to undertake three round trips per day providing the day trip market with the ability to spend the entire day on the islands rather than struggling with a window of only a few hours that currently exists. The vessel of choice would be capable of taking at least 250 passengers. The Company believes that it could provide this improved service at a cheaper price than what is currently charged, with the advantage of a significantly shorter journey time and greater timetable optionality. Freight Service The Directors believe that the current freight service is inadequate as it does not deliver year-round capacity into St Mary's or the outer islands in a cost effective or time efficient manner. The Company proposes to collaborate with local south-west organisations to offer an end-to-end freight service, with a view to offering a superior service to that which is currently available. This proposal would involve the introduction of additional vessels of different sizes and specifications to ensure that a minimum capacity of 550 tonnes of cargo per week is made available with the ability to upscale this should demand increase. Should the demand be less than expected, vessels could be deployed on the spot market on other routes given that they have the ability to be general purpose commercial cargo and work vessels. In line with this strategy, the Company had entered into Heads of Terms (HoT) with Kraken Marine Services Limited ("KMS" or the "Seller") for the acquisition of the entire business including the assets of the Seller. Subject to completion of this acquisition, KMS' assets will be used immediately to move component parts, steel and equipment between the yards. Additionally, the Company will help grow the existing freight and marine business of the Seller with external contracts across the south-west region and the Isles of Scilly. Further details will be made available upon completion of the acquisition. New Vessels and Levelling up Funding (LUF) Given the nature of the route, the Company does not believe that it is financially viable to operate the type of new build vessels currently envisaged without utilising levelling up funding or increasing fares substantially. Further the Company believes that the foreign built vessels being proposed are not sustainable because the volumes in the market will not be available for those size of vessels. The Company believes that given the seasonal nature of this route on the one hand, and the stable demand of the islands on the other, a responsible service provider should be offering optionality and dynamic operations depending on the time of the year. Future plans by other parties competing this route have severe deficiencies in this respect. Having undertaken discussions with certain stakeholders, the Directors firmly believe that levelling up funding could be made available to the Company in connection with its proposals. Through receipt of levelling up funding, the Company would not own the vessels; rather it would be responsible for managing them on behalf of a Special Purpose Vehicle. For the avoidance of doubt, the Company would need to tender for the operation and management of these vessels and there is no guarantee that the Company will be awarded this piece of work and be involved within this element of the overall project. The Company remains in competition with others for the award of this work and is currently working on its submission to the local council. In summary, from an operational perspective, the Company's plans will be significantly different from the future replacement programme that is currently being currently proposed. It will include multiple sailings per day on smaller vessels carrying both freight and passengers. Vessels will depart everyday both from the mainland and St Mary's during peak periods. In addition, the vessels will not only be embedded with current technologies but will also have the optionality to upgrade to new technologies in the future. These vessels will be future proofed from a design perspective to be able to adapt to any future shoreside infrastructure upgrades. Should the company be successful in its manufacturing bid, these vessels will be built and maintained in the UK, growing the UK economy and facilitating the development of the country's next generation of ship builders. Air link to the islands For the avoidance of doubt, this is not a business that the Company has any desire to be involved in. The Company is aware that other operators have expressed interest and wish to understand the Company's future plans with a view to building synergies between the sea and air routes. The Company will enter into discussions about future partnership programmes with air route operators as soon as it as more certainty on its bid for the ferry replacement programme. John Wood, Group Chief Executive Officer, Harland & Wolff commented: "As part of our continued growth and the route to the GBP500m turnover strategy, we are excited about launching our marine operations to reduce internal costs and to provide a better service at an affordable cost externally. Whilst there is no guarantee that we will win the bid to build and operate the new vessels, we are excited about the revenue generating capacity of the fast ferry and freight services offering. The team that we already have in the Company has extensive knowledge of marine operations and this is a natural extension of our business. We will provide further updates on ownership and chartering details in due course as the project develops." |
Posted at 14/9/2023 13:42 by jaknife Xenor,”so your argument essentially boils down to: Company has X debt. Company is insolvent (scary word) to X. From what you’ve written I don’t think that you understand the balance sheet as the two “X”s that you highlight are not the same. Search for “CONSOLIDATED STATEMENT OF FINANCIAL POSITION” in the interims: and note the following: 1. “Loans and borrowings” total (98,303,054) £3m of this number is capitalised leases (see note 8) and so the total traditional debt is £95.3m. Note specifically that this debt is all shown as “current&rdquo 2. “Total equity” (79,872,881) The total equity is a negative number and this is the source of my comment: “The balance sheet is insolvent to the tune of £80m”. In simple terms the total of HARL’s liabilities is greater than its assets by £80m. In classic accounting this makes them insolvent on a balance sheet basis, it implies that if HARL were to be liquidated then the banks would only collect about £15m on their £95m of debt – shareholders would get nothing but at least you are protected from having to pony up the £80m deficit (about 46p a share) because you benefit from limited liability. You're simply preying on the idea that all debt is bad and must be paid immediately. Something a lot of PIs have been conditioned to believe over the past year or so by people like yourself. As noted above the debt is “current&rdquo “Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.” See page 67: Hence there is a detail that the directors have glossed over somewhere because they note in the accounts that the Riverstone facility “matures&rdquo ”Debt is not bad, if it can be managed sensibly. It helps companies grow. The current debt package with Riverstone is awful but that's why we're seeking a new finance arrangement. From the RNS in late June this will be a 5 year deal with an interest rate in single digits. This debt will be a lot easier to manage. I'm not blind to the risk that exists here prior to the deal being signed, I don't like the risk either. But I'm confident the deal will be signed.” Debt is bad when it can’t be repaid. It would be impossible for HARL to repay the Riverstone facility and hence HARL is dependent upon another bank to step in and lend enough money such that Riverstone can then be repaid and so that HARL has enough cash to carry on trading (to cover the expected losses of £38.5m in the 18 months from 1 July 2023 to 31 Dec 2024). I’ve set out above in great detail why no sane bank will lend to HARL. You can take me at my word (personally I don’t understand why it’s not plainly obvious) or you can believe that I’m lying, regardless we will find the answer in time. I am accustomed to waiting. ”The early November RNS you refer to with a 4-6 week closure period is irrelevant. That was stated before we won the FSS contract and it was stated afterwards that the company was no longer pursuing that specific finance arrangement and had instead initiated a deal with a larger scope for more money and with the involvement of UKEF. Extra time for this was understandable, but I certainly agree it has dragged on far too long now.” The FSS contract is for £750m of revenue, which will be spread over 7 years. On the other hand HARL’s house broker forecasts that the balance sheet will be insolvent to the tune of just under £120m on 31 Dec 2024. Have you run a cash flow analysis to work out what net cash might be generated over the seven years of the FSS contract and thus when the £120m hole in the balance sheet might be repaired? Can you not see what is obviously implied by these numbers? HARL are aiming for “a blended gross margin of 24%-27%” (page 12 of accounts). If they achieved that on the FSS contract then that would be a gross profit of about £187.5m (@25% GM) spread over seven years. But that’s gross profit! After admin expenses the net profit will be materially less. It should be plainly obvious that the FSS contract is not going to be enough to get HARL out of the hole that it’s in! It does not take that long to arrange a debt facility. HARL announced the Execution of the deal on 18 Jan: That was 34 weeks ago. Why wasn’t a new debt facility announced six weeks later? Have you read my post above explaining why there is no reasonable chance that UKEF would get involved? At a basic level surely you can see that the FSS contract is a domestic one and hence won’t qualify for “Export” finance? ”What do you plan to do with your short when we sign the finance deal? Will you close it and accept that you got this wrong or will you find something else to deramp over?” HARL’s accounts are quite clear that they (a) need to raise fresh equity, and (b) they are already in discussions to raise fresh equity. Do you think that your directors were lying when they wrote these words: “The Company is in advanced discussions with potential funders (both debt and equity) to raise additional funds.” (page 62 of accounts) I expect such a placing (if they can even organise such a placing) to take place at a significant discount. My understanding of the word “deramp” is to post false information to try to drive the price down. The last company that I was accused of “deramping&rdq JakNife |
Posted at 10/9/2023 17:12 by jaknife I'm just a bear of little brain, but I can't for one second believe that HARL have the slightest chance of getting UKEF to guarantee a £200m loan.1. Firstly, in all my time in investment banking (23 years) the DTI (DBT as they are now) were always crystal clear that their role was to support commercial transactions. There is nothing "commercial" about lending money to HARL, as HARL is an outright charity case. HARL made a £31.5m loss in H1 and now has a balance sheet with an £80m black-hole at its centre. Its house broker now forecasts that they'll make a further loss of £14.5m in H2 (full-year loss of £46.0m) and a total loss in 2024 of £24m. So the house broker is telling you that the gaping black hole will have increased to £118.5m by the end of 2024. No sane bank lends to a company that is technically insolvent to the tune of £80m now and is forecast to be even more insolvent 16 months from now. And on that basis UKEF will NOT get involved because they only support commercial transactions! Take a read of their most recent annual report: "A key principle of our pricing is to maintain a level playing field. We therefore operate within the OECD Arrangement (a framework for the orderly use of officially supported export credits), where it applies. This requires all ECAs to charge risk-based premiums sufficient to cover their long-term operating costs and credit losses. This mirrors the WTO Agreement on Subsidies and Countervailing Measures, which classifies export credit guarantee programmes that do not cover their long-term operating costs and losses as “prohibited subsidies”." From: attachment_data/file [remove line break in above URL] Have a read of the accounts and see that UKEF is a business that makes a profit - it has always been run as a commercial operation! And note that UKEF DO NOT make equity investments. Have a look at the balance sheet, there are none there! Lending money to HARL is not a commercial proposition and hence UKEF will NOT lend to/guarantee a loan to HARL. 2. But there's a more fundamental reason why UKEF are NOT going to lend or guarantee a loan to HARL and the clue is pretty obvious as it's in their title - UK Export Finance! HARL's big contract is with the UK Government. They are part of a consortium to deliver three state-of-the-art ships to the Royal Navy. That's the "UK" Royal Navy. There is no "exporting" in this contract and it therefore naturally follows that there's no export that UKEF needs to get involved with. HARL has no material other contracts (export based or not) that might support such a loan. Conclusion Someone on HARL's board is going to great extremes to keep the dream alive but it's ten months since HARL claimed that they were in negotiations for a new loan: when they specifically said (9 Nov 2022): "Financial close is expected within four to six weeks. The Company will make further announcements at financial close" 43 weeks later and there's still nothing! Right there you have the evidence that points to either (a) an over-optimistic board that are inflating investor expectations beyond a reasonable level, or (b) an incompetent board that haven't got a clue. Neither is an investable proposition! JakNife |
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