Merseyside shipyard Cammell Laird reports loss for fifth year in a row but shows signs of stability after taking a big financial hit on the RRS Sir David Attenborough project. Tony McDonough reports
Cammell Laird is reporting an annual loss for the fifth year in a row but is now showing signs of emerging from “some of the most challenging times in the group’s history”.
That was how chief executive David McGinley described 2020 and 2021 after the Birkenhead shipyard took a significant financial hit from the building of 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. 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 shareholder Peel Ports had to bail out the business to the tune of almost £25m.
Now Cammell Laird has published its latest accounts on Companies House for the 12 months to April 2, 2022. They show revenues of £94.4m, down from Almost £128m in the previous year.
Pre-tax losses were just under £4.5m. This was an improvement on the £7.5m loss reported for the 12 months to March 2021. It is the fifth year in a row Cammell Laird has reported a loss. In 2020 it was £8.5m, 2019 £43m and 2018 just over £1m. Its last pre-tax profit – £7.4m – was reported in 2017.
In March 2021 the company issued redundancy notices as it looked to cut costs by reducing its then 722-strong workforce. In July of the same year it revealed 146 people had agreed to take voluntary redundancy.
In the latest accounts Mr McGinley says of the redundancy process: “The main objective of the process was to secure the ongoing employment of the remaining workforce and support the many hundreds of jobs which exist in the supply chain.”
He also said: “The group has continued to invest in its apprenticeship training scheme…the company had more than 500 applicants for the 2022 intake. There are 119 apprentices currently working for the group in roles including welders, fabricators, electrical, HR, project management and finance.”
Contracts for the UK Ministry of Defence (MoD) continue to form a major part of Cammell Laird’s order book. It is currently four years into a 10-year programme to maintain the UK’s nine Royal Fleet Auxiliary vessels.
Britain’s Royal Navy is developing multi-role surveillance vessels to protect UK waters against “hostile actors”. The first of these vessels has been acquired by the MoD and will enter the Birkenhead yard for a refit.
Cammell Laird is also working on the power improvement project for the UK’s six Type 45 warships. HMS Daring entered the yard in September 2021. Work also continues on the Dreadnought submarine programme.
And the company continues to maintain the five largest Calmac ferries, which operate in Scotland, under a long-term framework agreement signed in October 2020.
There are still more than 500 people employed at Cammell Laird and Mr McGinley is upbeat about the company’s future prospects.
In March 2022 the then Prime Minister Boris Johnson and the defence Secretary Ben Wallace announced plans to secure the future of shipbuilding in the UK during a visit to the shipyard.
Mr McGinley is hopeful this will lead to a significant pipeline of work from the Government over the next few years. He added: “The directors and management team look forward to the future with a level of confidence.”