Group enjoying successful recovery
THE Harland and Wolff Group (H&W) continues to operate as an expanding diverse engineering business with a number of special capabilities related to marine engineering and design, ship repair, and including offshore wind-farm fabrication. The company is a wholly owned subsidiary of the Norwegian Fred Olsen Energy Group.
In 2012, H&W enjoyed a significant increase in turnover and improved its profitability. This followed a loss in 2010 when trading conditions were described as 'externally challenging' and a recovery in 2011. In contrast to 2010, the recent reports on 2011 and 2012 describe results as satisfactory. They added that 'with the appropriate level of activity and commercial control, the group is successful'.
Turnover, which fell to £6.3m in 2010, recovered to £24.6m in 2011 and increased by a further 71% to reach £42.2m in 2012.
Looking ahead for 2013, the report says there is a reasonable level of activity for the first half of 2013 with considerable bidding activity for the second half and beyond.
The increase in turnover in 2012 generated an operating profit of £3.5m.
Employment in the group increased slightly, on average, to 160 people. In addition the company employed an average of 150 people on a variable temporary basis.
H&W Group maintains a large defined benefit pension fund with assets of over £119m. This pension scheme has only 65 current contributing members but also has 3,404 members who are either pensioners or deferred members. After adjustment for tax liabilities, the pension scheme recorded a (tax adjusted net) actuarial deficit of over £23m at the end of 2012.
Because of the increase in pension scheme liabilities, as assessed under FRS 17, the balance sheet value of shareholders' funds fell sharply at the end of the year and recorded a net actuarial shortfall of £0.9m.