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 the Company has been successfully awarded the M55 Regeneration Programme (M55 Contract) by the Ministry of Defence (MOD) on behalf of the Lithuanian Defence Materiel Agency (DMA) after a competitive bid process.
The contract value for this programme is £55 million, with a potential to increase this value through additional equipment and further upgrades at the client’s option. The M55 Contract incorporates the delivery of a regenerated vessel, with stated mission and sonar systems, to an agreed operational condition, for final delivery to the Lithuanian Navy.
It is a landmark deal for the Company, being its first contract win within the defence sector. Following extensive discussions with the MoD and a competitive tender process, winning the M55 Contract is a clear validation of the strategic progress the Company has made in the last 2 years as well as the technical skills, expertise and facilities it now has in operation.
The M55 Contract is expected to commence in August and be completed within 18-24 months with the programme being undertaken at Harland and Wolff’s Appledore site. Under the terms of the contract, no performance bonds will be required to be issued and an acceptable milestone payment plan has been agreed for the lifecycle of the programme. Contractual payments will be spread across FY 2022, FY 2023 and FY 2024, thereby creating a predictable, ongoing revenue stream for three financial years. The contract underpins the Company’s FY22 and FY23 revenues, with margins also in line with management expectations.
The Board strongly believes that this contract will significantly enhance the Company’s reputation in the market and pave the way to securing future defence and government contracts.
With this award now secured, the Company has delivered on its objective of becoming operational in its five key markets – cruise & ferry, commercial, energy, renewables and defence. In conjunction with the recent award of the Cory barge contract, all the Company’s facilities are now operational and active on projects. The Company is progressing towards its stated medium-term goal of becoming a £500 million per annum turnover business.
Harland & Wolff, group CEO John Wood, commented:
“I am thrilled that the Company has been awarded the M55 Contract. This is a watershed moment.
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.
The extended process to win the M55 Contract enabled us to showcase the technical and commercial capabilities of the entire group and has now provided the MOD with a credible alternative to the existing industry base. This contract is validation that the Government can go elsewhere, recognising the investment and progress made over the last two years to put the Company in a position to execute on such programmes.
Our eyes are now set on delivering this contract and executing on our pipeline as we continue to build momentum, credibility and a high-performing, experienced workforce.
Finally, I wish to thank the MOD for the faith that they have placed in the Company, and I look forward to working closely with them on the successful delivery of this contract .”
For further information, please visit www.harland-wolff.com or contact:
Harland & Wolff Group Holdings plc
John Wood, Chief Executive Officer
Seena Shah, Head of Marketing & Communications
+44 (0)20 3900 2122
