Harland & Wolff Share Discussion Threads

[loglorry1] 16/9/2023 13:02

Not sure it's rampy it's really just looks a boring and insignificant RNS REACH to me.

Feels like management have lost the plot. One minute they are building and running a ferry service, the next, some partnership with a battery company for boats.

[spudtheplumber] 16/9/2023 10:59

Very strange to issue a rampy RNS REACH after hours on a Friday

[1alfi] 16/9/2023 10:25

It's good news regardless of the source.

[loglorry1] 16/9/2023 08:36

It's not an RNS It's a REACH - marketing.

[oakville] 15/9/2023 17:19

Harland & Wolff Technologies (HWT) has today announced a new partnership with Echandia, the Swedish energy systems supplier.

The partnership, announced during London International Shipping Week 2023, will see HWT work with Echandia on the development of its battery technology, helping to increase the capability of the batteries and scaling the technology for new vessel types.

The partnership gives H&W exclusive distribution rights for battery sales in the UK, Ireland and Australia for the maritime sector. HWT will also establish a UK assembly line for the battery systems and provide in-service support for installations in field.

This agreement builds upon the recently announced consortium between the two companies to develop and build zero emissions harbour and coastal tugs, alongside Macduff Ship Design Ltd. and Kongsberg Maritime.

H&W Technologies was recently established by Harland & Wolff to drive forward the development of new technological solutions for the maritime sector. These include batteries, future fuels and systems integration as well as the provision of in-service support.

As the maritime sector transitions to low and zero emission operations, vessel owners and operators are testing different propulsion solutions for different segments within the sector. Batteries are being deployed today for all vessel types, incorporating fully electric and hybrid solutions.

Echandia works with the world’s largest shipyards and system integrators to equip new and retrofit vessels with batteries for hybridisation, full propulsion, and increased energy efficiency. Echandia has successfully deployed its battery systems in the ferry, naval and workboat sectors.
The Echandia battery system is an air-cooled, lithium-ion battery system, certified for maritime heavy-duty usage.

With its robust construction and high performance, Echandia’s battery systems are ideally suited for applications that require safe operation over a long lifetime.

John Wood, CEO of the Harland & Wolff Group of Companies said: “We are delighted to announce this new partnership, which will see Harland & Wolff Technologies working with Echandia to assemble, integrate and test the next generation of battery systems for the maritime sector.

“We are committed to developing and bringing to market the best possible solutions for our customers and this partnership will enable us to do that on batteries across the commercial, leisure, offshore and defence industries.”

Fredrik Hellström, PhD, CEO of Echandia said: “We are excited and enthusiastic about the partnership with Harland & Wolff. We firmly believe that this represents a significant step towards securing substantial business opportunities in key markets and emerging segments. Together, we are laying the foundation to further enhance our offerings to customers and contribute to an emissions-free maritime industry.”

[xenor] 14/9/2023 21:52

JakNife, I'm not going to comment on what you said about the accounts because I'm not an accountant and you may well be right that the balance sheet is technically "insolvent". Although the balance sheet fails to account for the value of the IM asset.The key thing is being able to afford the debt and pay back the money. That's why we are structuring the new deal over five years, so that revenue from FSS can cover the debt. The five year debt deal doesn't necessarily mean the company has to pay off all the debt in that time. Just as I can remortgage my house for a longer term, the company can negotiate a new debt deal whenever it chooses to pay off the existing one. This is essentially what it is doing right now, paying off the Riverstone debt with a new larger facility on more attractive terms. There's nothing to stop the company doing this again three or four years down the line. I'm sure you understand this.On your placing comment. Why? Even if the company did a 100% dilution and raised 20m, what for? It wouldn't be anywhere near enough to clear the debt and the company doesn't need the working capital because it has enough to last until the new loan is signed. I only see this as a possibility if the new finance falls through. Fair enough you think it will, but I don't and therefore I don't see a placing in the foreseeable future. Shorters have been predicting a placing since the day we won FSS in November. Almost a year now.On UKEF you make valid points, but it can't be so simple that the company doesn't qualify because the FSS contract is not an export contract. We'd have been outright rejected many months ago at the application stage if it were that clear cut. Maybe FSS does somehow qualify as an export contract? The actual FSS contract is with Navantia - a Spanish based company. They are subcontracting the work to us, we are essentially exporting labour to them and getting paid for it. It sounds like a loophole, but it could be a plausible explanation for how we qualify for it.

[jaknife] 14/9/2023 13:42

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”, ie it appears under “Current liabilities” rather than “Non-current liabilities”, this means that it is due for repayment in the following 12 months. The debt was also shown as current in the annual report suggesting that it’s actually due to be repaid before the end of 2023.

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” indicating that it has to be repaid by 31 Dec 2023. This is a standard accounting principle but you can find this confirmed in the annual accounts:

“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” on 31 Dec 2024 but they don’t explain why it is that it’s accounted for as if it’s due to be repaid before 31 Dec 2023.


”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” was Cineworld. I’ve deliberately taken time to post links and evidence to support my comments above. If you think that any of them are factually incorrect then let me know and I will happily clarify.

JakNife

[seagreen] 14/9/2023 13:35

Xenor I agree but at least he posts his views in an educated and polite manner even if we chose to disagree!
A Gentelman shorter not a yob!

Of course as an ex Investment Banker he knows full well the use of debt does not wipe out the equity if a project generates income to cover the interest.

[linesal2] 14/9/2023 12:49

a few months ago there were rumors of interest rates coming down in the Autumn, maybe they were waiting to see what happens, Not looking like interest rates are coming down (unless the autumn statement brings some give-aways as fully expected pre-election year).

[xenor] 14/9/2023 11:30

JakNife, so your argument essentially boils down to:Company has X debt.Company is insolvent (scary word) to X.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.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.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.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?

[seagreen] 14/9/2023 10:22

Jak

All joking aside as one of the few short sellers I respect, I hold my hands up I accept I need to do further detailed research here and get up to speed with some of the numbers and projects.

(I know BEN's metrics far better which I believe is finally gaining significant improvement although its taken a year but that is O/T)

I obviously do know they need funding or a reduction in the number of projects they are looking at I am not blind but I can see the potential of a recovery.

Whilst I accept it is a goood rule of thumb widly used by Share Prophets and short sellers to review projects whose BOD's previous performances it is by no means a slam dunk to assume previous performance implies success or failure in a new project. (Unless they are proven fraudsters which as far as I am aware is not the case here and having a dig at people's cars is rather purile and typical all be it often jealous irelevancy.)

Certainly if it was in the Melrose turn round stable it would be encouraging or if we could drag some of my chums from the original Melrose turn round crew out of retirement that would help.

Certainly subject to funding some of their ideas and potential projects look potential game changers. The brief spike in the share price is indicative of potential long term upside.

I only have a small punt as any good news could result in a rerating and a bear squeeze of the margined short sellers.

I will get my slide rule out but the noise created in Dublin and the visit by the PM etc are also positive signs fingers crossed.

Have a good day it seems there are a few sweaty palms out there of those who live on the margin as not everyone agrees with their 24/7 deramping and bashing.

[seagreen] 13/9/2023 19:14

JakNife was you long and distinguished Investment Banking career helping in the canteen at Merrill Lynch I rember a rather ratty chef during my 5 years there.If the expansion plans of Harl make sense then there will be no problem in raising the money.You have a margined bet on a spike on good news that they will not raise the finance.Very risky imho

[lopodop] 12/9/2023 21:13

For heavens sake stop behaving like a clown.
Who would not like to see HARL succeed unless of course wholly anti UK economic prosperity.
Right now one could be looking at a share value of 30p if HARL was skipping along.
Hence the concerns.
Stop cluttering up this board with drivel about shorters and focus on how to make this a world class entity eh.

[linesal2] 12/9/2023 19:03

It was shorters that said Island Magee would never get permission and it would only be a caravan site, shorters were also wrong on that one.

[linesal2] 12/9/2023 19:00

with the hundreds of companies the shorters attack, they are bound to get one right (law of averages), and how many have you been wrong on? I suppose you can't post that.

[linesal2] 12/9/2023 16:46

Been here for quite a few years and topped up on every dip, I was content with the plans for Island Mgee but the acquisition of Harland and Wolffe just at the time the UK was pulling up their socks to get manufacturing back in the UK was a masterstroke.
I remember the early days of JW wanting to go into the FTSE and I believe that will happen in time (5-10 years), You only have to search through the shorter's previous posts to understand they will use any tactic to lower a share price exaggeration being their main tact. I would like to be able to start drawing down in about 2027 so lots of time for me. DYOR

[seagreen] 12/9/2023 09:58

Onwards and upwards ignore the concert party of margined short sellers posting fake news.

I was requested to make a contribution and was shot down by the mob for making some clear signs of green shoots....

No surprise they are all on margin.....biting their nails LOL

[wiltowin] 12/9/2023 08:59

You should really get in here now before you miss out, you day traders rarely make substantial money and I've yet to meet a wealthy one. Good luck with the deramping as I want more at sub 10p.