GCIHarland & Wolff secures milestone £55m defence contract
( ), the shipbuilder and marine engineer, has been awarded a £55m contract by the UK Ministry of Defence (MOD) on behalf of the Lithuanian Navy
The "M55 Regeneration Programme" contract specifies delivery of a regenerated vessel, to an agreed operational condition including stated mission and sonar systems, to the Lithuanian Navy. The initial £55m value has the potential to increase through additional equipment and upgrades at the client's discretion.
Work on the project will commence in August at 's Appledore site, and is expected to complete within 18-24 months.
CEO John Wood commented: "This contract has provided the breakthrough that we needed to activate our fifth and final key market of Defence. Our strategy has been well and truly validated and we intend to capitalise on this win through bidding on and securing further government contracts."
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This is a milestone contract for , being its first win in the defence sector. Defence was the fifth and last sector where the shipbuilder did not have any business, the other four being cruise & ferry, commercial, energy, and renewables. The contract was awarded after extensive two-year talks with the MOD and a competitive bid process. It is a validation of Harland & Wolff's strategy to develop the technical, commercial, and scale capabilities necessary to execute on a major military project.
Payments from the contract will be spread across FY22, FY23, and FY24, giving investors confidence in 's sustained and predictable revenue streams, with margins well in line with management expectations. Already today, its shares have soared 25.05%, while the contract should pave the way for future military contracts, a major sub-sector of the marine engineering industry.
In June, the company secured an £8.5m contract with Cory Group for the fabrication of eleven barges. After work on today's contract commences in August, all of 's facilities will be operational and active on projects. The company appears well on its way to reaching its medium-term goal of becoming a £500m a year turnover business.
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