Adrian JohnsonTLDR:
- Harland & Wolff has halted trading on the London Stock Exchange due to delayed annual results
- The company is in discussions with auditors over revenue accounting for complex contracts
Key Elements:
Harland & Wolff, a shipbuilder based in Belfast and known for building the Titanic, has suspended trading in its shares on the London Stock Exchange. This decision comes after the company failed to publish its annual results on time due to ongoing discussions with auditors regarding revenue accounting for some of its multi-year and complex contracts.
The company’s audited accounts were delayed past the June 30 deadline, resulting in the temporary suspension of its shares on the Aim market. Harland & Wolff has clarified that it has been in extensive talks with its auditors to determine the proper method of accounting for revenues throughout the duration of certain contracts.
Although the company recently agreed on revenue treatment with its auditors, the publication of results is expected to occur next week, at which point the shares suspension will likely be lifted. In its unaudited financial results for 2023, Harland & Wolff reported a pre-tax loss of £43.1 million, an improvement from previous years, with revenues more than tripling to £86.9 million.
Amid this financial uncertainty, there have been reports suggesting that a £200 million government loan guarantee for the company may be in jeopardy. However, Harland & Wolff remains optimistic about its future prospects, including a bid win for the Royal Fleet Auxiliary’s fleet solid support ships and an application for support under the Government’s Export Development Guarantee scheme.
The group’s chief finance officer, Arun Raman, expressed optimism about revenue growth and the need for stable long-term working capital to secure large contracts. Harland & Wolff’s engagement with the UK Government continues as it seeks to finalize the UKEF facility deal.
Ultimately, Harland & Wolff’s decision to halt trading on the London Stock Exchange underscores the company’s commitment to resolving revenue accounting issues while navigating the challenges of a competitive industry and financial pressures.
