Shipyard operator A&P Group has hailed an improvement in repair work at its Tyneside site and its wider defence contracts.
New accounts for the group - which runs yards at Hebburn, on Teesside and in Falmouth - detail improvements across A&P's defence division which handles a long term contract to deliver repairs to the Royal Navy's auxiliary fleet. The firm also singled out strong revenues at its Tyne operation in the final quarter of the year to the end of March 2022 where there had been more use of its dock facilities and larger contracts from new and existing customers, albeit at lower margins.
At the same time, there were fewer fabrication contracts - particularly through the "Future Submarines" programme - resulting in below expectation revenue. A 7% rise in group turnover to £94.3m was set against a backdrop of what A&P said was strong customer loyalty, particularly among clients with smaller dredging and offshore support vessels. Meanwhile operating profit increased marginally from £4.8m to £4.9m.
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On Teesside, where A&P operates two dry docks and 240m of jetty frontage along with workshops and cranes, there was a reduction in occupancy levels. That was also the case across the group's Falmouth operation, though lower occupancy was said to have been more than offset by higher berth occupancy.
In Cornwall, the group said its MoD contract had performed well with a major refit of the RFA Cardigan Bay landing ship dock completed in July 2021 and extensive work on medical ship the RFA Argus. And its Falmouth port business benefited from the return of cruise ship visits which had completed stopped during Covid restrictions.
In November BusinessLive reported that A&P had missed out on a lucrative £1.6bn contract to build support vessels for the Royal Navy - the beneficiaries being a Spanish-led consortium with much of the work going to a rival Belfast yard. In response, the North East shipbuilder said it hoped to win other work from the National Shipbuilding Strategy, which was launched by the Government at the Hebburn yard in March last year.
The sentiment was echoed in the latest accounts, as A&P said it was "determined to take advantage of the Falmouth and Tyne sites" which it said were well placed to benefit from the Strategy. In a report published with the accounts, A&P Group chief executive David McGinley said: "Trading the first part of 2022/23 has been encouraging, with results for quarter one in line with expectations.
"Our shareholders and current management team are committed to delivering our five-year plan and ensuring that the business continues to go from strength-to-strength as we pursue opportunities in new sectors and continue to serve our existing customers."
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