Merseyside shipyard Cammell Laird sees revenues surge 30% to £122.7m and returns to profit after enduring ‘some of the most challenging times in its history’ when it lost millions on RRS Sir David Attenborough. Tony McDonough reports
Cammell Laird shipyard in Birkenhead is reporting a 30% surge in revenues to £122.7m and a return to profit for the 12 months to April 1, 2023.
Pre-tax profit for the year came in at £3.7m, a big improvement on the £4.5m loss reported in the previous year and ends a run of five straight years of annual losses.
Chief executive David McGinley had previously described 2020 and 2021 as “some of the most challenging times in the group’s history” after it sustained hefty losses building the £200m polar research vessel RRS Sir David Attenborough.
Workers at Cammell Laird started building the ship in October 2016 for the Natural Environment Research Council (NERC). It was, said Mr McGinley, “one of the most complex ever undertaken in the shipyard”.
Delays due to COVID-19 as well as “further engineering and design challenges” meant the formal handover of the vessel to NERC did not take place until November 27, 2020. Work on the ship continued at the yard until it departed the Mersey on July 1, 2021.
Design, production and supply chain issues on the build caused costs to rise significantly. As a result owner Peel Group had to bail out the business to the tune of almost £25m.
In December Cammell Laird managing director Mike Hill said the business, which employs more than 600 people, had undergone a “complete overhaul”. Cammell Laird now operates as part of a wider group called APCL Group.
This also includes A&P Group, as well as Birkenhead engineering firm Neway Industrial Services. This group comprises shipyards in Birkenhead, the North East and the South West of England.
In the annual report, just posted on Companies House, Mr McGinley said: “The business has recently been awarded a number of new contracts, and alongside the existing projects, the order book is strong.”
This is the fourth year of the two 10 year contracts to support the Royal Fleet Auxiliary (RFA) and during the year the Company successfully passed the mid-term value for money review.
HMS Dauntless, the first of six Type 45 destroyers to undergo its major Power Improvement Programme (PIP) at Carmel Laird, has passed all of its rigorous sea trials and has been deployed to the Caribbean.
HMS Daring, the second Type 45 arrived at Cammell Laird in September 2021 and embodiment work started in March 2022. The major PIP was successfully completed in 40 weeks, after significant knowledge gained during the first re-fit on HMS Dauntless.
Within the commercial market, Cammell Laird welcomed the arrival of Fred Olsen’s Borealis for her dry docking in October 2022. This is the first cruise liner to enter the dockyard in more than 20 years and she departed on time and on budget.
And, late last year, LBN revealed Cammell Laird had secured the £26m contract to build a new Mersey Ferry. It has also settled a potentially disruptive pay dispute with unions. Its latest annual financial results are due to be published shortly.
Mr McGinley added: “There has been a significant increase in turnover… This is mainly driven by a doubling in commercial ship repair revenue during the year.”
He went on: “The balance sheet is healthier than last year with debtors and creditors reducing, along with a significant increase in cash balances.
“The business has now returned to profit. The focus for the management team will be on the RFA Cluster Support Contract, the Dreadnought Programme and Type 26 Programme, as well as continuing to win new long term agreements with commercial customers.”
Cammell Laird has also continued to invest in its apprentice training scheme, with the majority of the current workforce having completed an apprenticeship at the Engineering College adjacent to the shipyard.
The Group continues to develop its workforce and aims to grow the yearly intake of apprentices. It took on 39 apprentices in September 2022 with a further 50 to follow.