Engineering group’s profits to be hit as contract delays go nuclear

Engineering group Redhall said it expects profits to be hit by delays on major nuclear and infrastructure projects but hailed the strength of a robust forward order book.

The Wakefield-based group’s subsidiary, Jordan Manufacturing (JML), has signed a trio of contracts with Balfour Beatty for the supply of specialist manufactured metal products for incorporation in the marine works at Hinkley Point C.

Redhall said: “The group is delighted to have finally agreed these material contracts, but notes the timing has been delayed due to changes in scope, programme and design.  Delays in large orders can have a significant impact on reported results and this delay, combined with those in other contract programmes and awards at our manufacturing businesses, has led the board to conclude that the Group’s financial performance for the current financial year, which will naturally be second half weighted, is likely to be adversely affected.”

Despite issues with the timing of contract awards, Redhall said its forward order book “continues to demonstrate the positive momentum in the group”.  The order book has increased from £32m to £35m since December 2017.

Redhall also announced in December that JML had secured a framework valued at £18m over three years to manufacture containment systems and associated process equipment for Cavendish Nuclear under a teaming agreement which is not included in the order book.

Chief executive Phil Brierley said: “We are delighted to have secured these important contracts with Balfour Beatty and look forward to making a significant contribution to the Hinkley Point C project. Together with our framework to manufacture containment systems for Cavendish Nuclear, we are clearly demonstrating the market’s confidence in the group’s capabilities to deliver complex high integrity manufactured product.

“Whilst it is disappointing that the timing of contract awards has impacted our current year expectations, these are our first significant orders on what is a critical infrastructure project for the UK.  We believe these contracts will be the first of many on the Hinkley Point C project and in the nuclear sector as a whole in the coming years.”