Harland & Wolff's failed Scilly Ferries venture left £3m in debt before collapse

Harland & Wolff's ill-fated venture into the ferry service sector, Scilly Ferries, amassed debts of £3m before succumbing to administration earlier this year, according to recent disclosures in official filings.

In a bold move by the former management of the shipyard renowned for building the Titanic, Scilly Ferries was established despite setbacks including financial turmoil and a delayed launch, ultimately ceasing operations without completing a single trip, as reported by City AM.

The ambition shown by Harland surprised industry observers since the company ventured into an unfamiliar ferry operating domain and had previously been unsuccessful in obtaining the contract to revamp the ageing Scillonian III service connecting the Scilly Isles with the mainland.

Newly released documents at Companies House have now confirmed that Scilly Ferries was significantly indebted to creditors totalling more than £3m at the point of its collapse. This comes on top of earlier reports exposing that the parent company, Harland & Wolff, owed a staggering sum exceeding £160m as it entered administration.

Back in May, amid postponements to Scilly Ferries highly anticipated summer inauguration, Harland & Wolff arranged for a helicopter service to mitigate inconvenience for customers left stranded by the delay, as City AM reports have indicated.

Detailed in the records is the revelation that Starspeed Limited, holding a five-year contract from 2022 to conduct air transportation between Penzance heliport and the Scilly Isles, had an outstanding claim of £71,016 against Harland at the time of its financial demise.

During that turbulent period, John Wood, the then-chief executive at Harland, disclosed in May that discussions were in progress with various local operators to forge "secure alternative arrangements" catering to those who had bookings with Scilly Ferries.

Passengers took to social media to voice their frustrations about last-minute changes and lacklustre communication regarding their planned long-distance travels, while some expressed excitement at the unexpected opportunity of a helicopter ride.

Starspeed has remained silent, not providing any comments when approached.

The lavish spending has sparked further scrutiny over financial decisions leading up to Harland's second fall into administration within five years.

When City AM reached out for a statement, Wood implied that inquiries should be "better directed at the directors that took over the business."

He referenced his records, noting that the choice to halt [alternative] operations likely resulted in a loss of at least £6m in revenue for the initial season, discussing the ferry service.

Wood claimed that the venture was projected to reach break-even in its inaugural year and that helicopter flights were factored into the budget due to anticipated repeat business from Starspeed during the summer months, "when helicopters couldn't fly due to fog."

Amidst the turmoil and under new leadership, the company initiated an internal investigation into the mismanagement of over £25m by its previous executives, which appeared to have provided "little or no financial or corporate benefit."

According to reports from Irish News, other creditors include the Labour party and the Labour-affiliated think tank, Progressive Britain, with debts of £18,000 and £12,000 respectively.

Over two months since entering administration, Harland & Wolff now appears to be on the brink of a rescue deal with Spanish state-owned shipbuilder Navantia, a move that could potentially safeguard around 1,000 jobs.

Harland & Wolff did not respond to a request for comment.

Titanic shipbuilder formally enters administration

Harland and Wolff, the Belfast-based shipbuilder which built the Titanic, has formally entered administration for the second time in five years.

Last week the company’s board had warned that the move was inevitable.

The administration process is confined to the holding company, Harland & Wolff Group Holdings plc, with the operational companies which run the yards continuing to trade.

Its main yard is in Belfast with other operation at Appledore in England and Methil and Arnish in Scotland.

The company’s executive chairman, Russell Downs, is optimistic that a new owner or owners will be found for the yards.

Gavin Park and Matt Cowlishaw of Teneo Financial Advisory have been appointed as joint administrators.

The holding company currently has 59 employees.

In a statement Harland and Wolff said: "The Administrators will unfortunately be required to reduce the headcount upon appointment.  A number of employees will be retained to provide certain required services to the operational companies under a transitional services agreement with the Administrators."

The company has also restated that the administration process means that shareholders in Harland and Wolff will see the value of their investment wiped out.

Famous for building the Titanic, the Belfast shipyard was founded in 1861 by Yorkshireman Edward Harland and his German business partner, Gustav Wolff.  By the early 20th Century, Harland and Wolff dominated global shipbuilding and had become the most prolific builder of ocean liners in the world.

Harland and Wolff was bought out of administration in 2019.  Its then Norwegian owners had withdrawn support and the business fell into insolvency, having not built a ship in a generation.

The new owner, Infrastrata, was a small London-based energy firm which did not have significant experience in marine engineering.  Infrastrata later changed its name to Harland and Wolff and in 2022 won a major Royal Navy contract as part of a consortium led by Navantia, Spain’s state-owned shipbuilder.

However financial losses mounted as it scaled up its operations.  The 2021 accounts, which covered a 17-month period, showed a loss of more than £25m.  The audited annual accounts for 2022 showed turnover of £28m and a loss of about £70m with the auditor’s opinion of "material uncertainty" about the firm’s ability to continue as a going concern.  Unaudited accounts for 2023 saw a loss of £43m.

The company was increasingly reliant on high-interest borrowings from a specialist US lender, Riverstone.  It was also pinning its hopes on getting government loan guarantee that would allow refinancing with more conventional lenders.

In July the new government confirmed there would be no support as there was "a very substantial risk that taxpayer money would be lost".

Russell Downs, a restructuring expert, was parachuted in to act as executive chairman and began a strategic review of the business along with advisors from Rothschild bank.

MoD has just ordered new supply ships from H&W https://www.forcesnews.com/services/navy/fleet-solid-support-ships-contract-royal-navy-will-go-ahead-troubled-belfast-shipyard

From the BBC:

Titanic shipyard to go into administration

Shipbuilding company Harland and Wolff has confirmed the business is to be placed into administration for the second time in five years.

Insolvency practitioners Teneo are being lined up to act as administrators and some "non-core" staff are being made redundant.

However, the company’s board said there was a "credible pathway" for its four shipyards to continue trading under new ownership.

Its main yard is in Belfast, best known for building the Titanic, with other operations at Appledore in England and Methil and Arnish in Scotland.

The company said the administration process would be confined to the holding company, Harland & Wolff Group Holdings plc, and the operational companies which run the yards are expected to continue trading.

However, shareholders will see the value of their investments in the business entirely wiped out.

The firm said its non-core operations are being wound down.

That process had already started with the closure of its Scilly Isles ferry service before sailing had even begun.

(... news article continues ...)

Atlantic Wolff has ceased trading (before it started).

Atlantic Wolff has ceased trading (before it started).
Harland and Wolf have advised they've cased all Scilly operations.

It's reported on local radio, but nothing on the BBC web as yet.
Cornwall Live (complete with many clicks) https://www.cornwalllive.com/news/cornwall-news/live-scilly-ferries-announce-sudden-9451528

Harland and Wolff: Titanic shipbuilder staves off collapse after securing emergency £20m loan
By: Guy Taylor

The Belfast shipyard said it had entered into agreements with lenders to increase its existing credit facility by $25m (£19.5m).
...
However, the announcement was followed by a decision from the shipyard to withdraw its Scilly Isle ferries service, which runs between the islands and Penzance.

In a statement, Harland said it would be “winding down business lines that are deemed to be non-core for the company” as it looks to cut costs.

The new Scilly Ferries service was set to run its first trips on 22 July, but kick-off was delayed due to Harland’s financial issues.

In view of the continual delays, may we perhaps just take off the "delayed until mid-July" from the title please?
Just make it "New Isles of Scilly ferry service".

Bearing in mind in 2025 plans will be drawn up for the Scillonian replacement.
With perhaps a year for building.

..........crew shortage? 

...first sailing now postponed to 20th August, "due to unforeseen reasons, beyond it's control"

In view of the continual delays, may we perhaps just take off the "delayed until mid-July" from the title please?

Also, 'Scilly Ferries'. Wasn't there a time when the islanders themselves would use 'Scilly' 'The Isles of Scilly', but leave the phrase 'The Scilly Isles' to the visitors?

An engaging collection of images of Penzance station and environs on Curnow Collection's link below.

It includes one of a large station nameboard on one of the platforms, the entire scene looking to be from a different era. Behind the sign, a view to the south pier, and, alongside, a vessel which turns out to be the current Scillonian 3 ... a bit of a time-traveller.

Mark


https://curnowcollection.com/penzance-infrastructure/

A new ferry service for the Isles of Scilly has delayed its launch date for a second time, as it undergoes final regulatory approvals.

Scilly Ferries had started taking bookings from the beginning of May to coincide with the World Pilot Gigs Championships and has been providing customers with alternative crossings.

The Atlantic Wolff ferry is currently on the water in Portsmouth where, after rebranding, has been through a series of tests but it is unlikely to be operational until early to mid July.

In a statement to customers Harland and Wolff CEO John Wood said "We know that this is disappointing, but we will do our utmost to transfer your bookings under the same terms where at all."

The company which is the rival of the 104-year-old Isles of Scilly Steamship Company (IOSSC) has been a topic of conversation for many months. Opinions have been divided on how successful it will be.

Janice Nightingale from the Bourdeaux shop said "it's certainly shaken things up a bit.

"You always think that it's good to have a bit of competition so and it gives you choices.

"I don't know that there's going to be enough business or sufficient business to keep both of them going."

As well as moving people on and off the islands, the ferries are vital for getting freight to the Isles of Scilly.

Phil Moon, managing director of the restaurant and cafe On the Quay, says the bulk of their supplies come from the mainland three times a week.

"With the competition that's coming in, and the differences that that might do, it's interesting, but also very worrying, because we just don't know what the future holds."

"There's positives and negatives. Obviously we need a service full stop. If there's no service here, there's no Isles of Scilly in my eyes."

Meanwhile the long-serving ferry, 47-year-old Scillonian 3, is on its way out with the new Mark 4 vessel is starting to be built in Vietnam at the end of June. The IOSSC expects it to be in action by 2026.
It has not all been smooth sailing for the long standing Steamship Company with some controversy over the changes in finances with it being privately funded instead of receiving £48 million pounds of levelling up money.
Stuart Reid, chief pperations denied there was any trust issues with islanders saying: "Everything we do is around ensuring that there's maximum benefit for both the community and the company at the same time.

"That goes with the new vessel project as well. We did a huge amount of consultation during the design process.

"We've been out several times to the islands, right the way through that four year project, which allowed the community to feed back into those plans, but will the two services."

Cllr Steve Simms, the Isles of Scilly lead for transport, has been closed following the actions of each company.

Cllr Simms said: "It's like a Greek tragedy...leaving the islands in a state of flux.

"I do not know what the travel situation will be here in 12 months because of what's happening.

"And also, on the other side in Whitehall, we see absolute chaos and we can't move on until we get another government."

I took a look and was struck by how much the service varies from one day to another - it seems to lack pattern and I wonder if that's tidal, what it does for regular traffic that might like consistency, or have I totally missed something?   

It seems to be a Catamaran for people only, no vehicles.
Two return trips a day most days, 90 mins is quicker than the Steamship. £48.75 return is very reasonable.

"Oh no she's not!" (panto season).
As at time of writing, she's alongside in Penzance.

game on

And there she is: a shipping map.

Mark

https://www.marinetraffic.com/en/ais/home/centerx:-5.7/centery:50.0/zoom:10

Urgent food deliveries have been set up for the Isles of Scilly in time for Christmas after a freight ship carrying chilled foods broke down.
The Isles of Scilly Steamship Company (ISSC) said the Gry Maritha returned to Penzance shortly after departure.
It said the repair was not likely to be completed until Boxing Day at the earliest.
The firm apologised for the disruption, as rival firm Harland and Wolff (H&W) stepped in to make the delivery.
H&W said it had set up a free freight service to St Mary's on Saturday.

John Wood, H&W's chief executive, said on Facebook the service was "for any emergency items and food required for Christmas".
He said only one run was possible, because of the forecasted weather conditions.
He added: "It is an unfortunate situation and difficult to deal with at this late stage with everyone shutting down for Christmas, but we are looking at all options."
ISSC said in a travel update it was "exploring all options" for the transportation of urgent chilled food to the Scilly Isles.
"Please accept our apologies for the obvious inconvenience that this has caused, and be assured we are doing all that we can to minimise further disruption to the freight service," it said. 

H & W proposing new ferry for next year. I wonder if the ISSC will regret their decision regarding takks.

https://www.bbc.co.uk/news/uk-england-cornwall-67800783

A new ferry is set to take passengers between Cornwall and the Isles of Scilly in faster journey times from next summer, its operator says.
Shipbuilder Harland and Wolff (H&W) has chartered a ship it says will come into service from May, with 90-minute trips.
Last month H&W made an approach to buy the existing operators, the Isles of Scilly Steamship Company (ISSC), but was "unequivocally rejected".
The ISSC ferry, the Scillonian III, is scheduled to sail from March.
H&W is calling its new arm Scilly Ferries, and said the new vessel was a catamaran that would take up to 400 passengers between Penzance and St Mary's in about one hour and 30 minutes.

H&W no longer interested in taking over IOSSC

https://www.bbc.co.uk/news/uk-england-cornwall-67785067

The only late autumn>winter>early spring public transport services are the separate Penzance<>IOS helicopter service (£150 one way) and the IOS Skybus (£130 one way) from Land's End Airport. Given the weather during this part of the year I would have grave doubts that anybody could run a reliable year-round maritime service.  

...H&W seemed to offer the best option for all year round services. ...

Isles of Scilly steamship company are running an offer for residents of Devon and cornwall to do a Sunday day trip in July and August for £25 per adult

Details here

https://www.islesofscilly-travel.co.uk/locals-offer-2017/

Cornwall and Isles of Scilly link work to begin


Harbour works and dredging improvements will be carried out

Work to improve transport links between Penzance and the Isles of Scilly is set to begin after funds were secured.

The ^11.9m scheme includes pier widening, dredging in Penzance and improvements to both harbours.

The European Regional Development Fund will provide ^5.5m for the scheme, with the Department for Transport providing the rest of the money.

The Scillonian ferry and the Skybus air service links Cornwall to the islands.

The works are expected to be completed in Penzance by the end of March and on the islands by the end of June.

Our flight did: taking off was OK, the crossing quick, and the landing ... interesting. The pilot based his landing technique on the width of the St Mawgan runway, meaning that an oblique approach got the wind close to head-on, and the reduced airspeed that allowed something close to a zero-length landing roll.

It's only later, on reflection, that you wonder if it was such a good idea after all.

Even in Summer, and especially with the weather as it was last week (wet, windy, low cloud, poor viz a lot of the time), I can only imagine that the Skybus fixed-wing operation must be haphazard at best.

The big helicopters were much more resilient to the variable west country weather!

choo-choo-chop-chop

I've long wanted to visit the Isles of Scilly and was actively looking at the rail/helicopter options back in the early part of this decade. Much more preferable to me, for novelty, than the Scillonian sailing or fixed wing flight.

A new heliport needs less space than an airport, and with only a couple of dozen pax per flight, it needs only a small terminal, a short runway, fuel, and fire services. And a windsock.

Aviation Digital Data Service (ADDS)

Output produced by METARs form (1825 UTC 04 September 2014)
found at http://www.aviationweather.gov/adds/metars/
 
EGHQ 041820Z 35004KT 4500 HZ BKN008 17/15 Q1017
TAF AMD EGHQ 041803Z 0418/0421 09007KT 4000 HZ BKN012
     PROB30
     TEMPO 0418/0421 6000 SCT020

From the BBC:

Isles of Scilly helicopter link 'could reopen in 2015'


British International Helicopters blamed falling passenger numbers and rising costs for the end of the service to the Isles of Scilly in 2012

A helicopter link from Penzance to the Isles of Scilly could be reopened, a Cornish MP has announced.

St Ives MP Andrew George said talks were progressing well for passenger helicopters to return in 2015.

Tourism operators on Scilly said the price of a flight would have to be right for it to be successful.

Two companies approached by the BBC - EasyJet and Ryanair - refused to comment on "speculation" two airlines were interested in the venture.

The final helicopter journey to Scilly, after a 48-year link, by British International Helicopters (BIH) took place in October 2012. At the time BIH cited rising costs and falling passenger numbers.

Mr George and Graham Cole, the chairman of AgustaWestland, the Anglo-Italian helicopter company, have "jointly expressed" their optimism over a potential helicopter service.

Mr George said: "When I asked AgustaWestland last year to help with plans to re-establish the service I was encouraged by their willingness to engage. Following our [recent] meeting I am more confident."

The company's AW 189 helicopter will be used by Bristow when it takes over search and rescue in Cornwall.

AgustaWestland previously said it would offer the first helicopter off the production line at a cheap rate to encourage someone to set up a commercial service to Scilly.

John May, who runs a camping facility on St Mary's, said: "Wherever possible you have to offer the customer what they need, but you have to keep the cost as low as we can."

The Council of the Isles of Scilly said: "The council welcomes any initiative that brings an additional mode of transport to the islands. The council is not involved in discussions between commercial operators at this stage."

Ryanair said it did not comment on what it called "speculation". Flybe said it was "unfortunately unable to comment".

From the BBC:


Land's End Airport reopens after runway work


Tarmac has been laid on four runways at Land's End Airport, in Cornwall, which has been closed since 4 July.

Land's End Airport reopens after runway work

An airport has reopened after a multi-million pound project to improve its runways.

Tarmac has been laid on four runways at Land's End Airport, in Cornwall, which has been closed since 4 July.

It was due to reopen on 21 July but was delayed because of resurfacing problems.

The airport has seen severe disruption over the last two winters because wet weather affected its grass runways.

It was closed to flights for three months in the winter of 2012/13 when the airfield became waterlogged.

Skybus flights to the Isles of Scilly have been flying from Newquay since the airport was closed.

The Isles of Scilly Steamship Company is the sole provider of commercial flights to the islands.

In June, it said about ^1.3m from the European Regional Development Fund had been confirmed for the ^2.6m project.

It could result in dredging of the channel at Penzance to take a bigger ferry

The government has confirmed ^8m funding to improve the ferry link between the Isles of Scilly and the mainland.

The European Regional Development Fund is expected to provide the rest of the money for the ^10m scheme.

It could result in dredging of the channel at Penzance to take a bigger ferry.

Andrew George, Liberal Democrat MP for St Ives, said it was an opportunity to regenerate Penzance and St Mary's.

'Better conditions'

Local Transport Minister Norman Baker, said: "We are putting at least ^8m into this scheme which shows that the coalition government is serious about protecting the livelihood of the Isles of Scilly.

"Improved terminal buildings will provide better conditions for passengers.

"Changes to the harbours themselves will ensure new vessels can still access the port protecting this route for use by residents, freight and holiday makers."

The Isles of Scilly Steamship Company (ISSC) which also operates flights to St Mary's from Land's End, has invested ^2m into upgrading facilities on board the passenger ferry Scillonian III, which sails to St Mary's from Penzance.

Lands end is to have 2 of its 4 run ways tarmacked by the end of the year.

New hard runway for Land's End airport
 
Land's End flights were affected by a waterlogged runway during the winter

Major improvements have been announced for two airports in Cornwall and the Isles of Scilly after bad weather caused chaos last winter.

A hard runway will be built at Land's End airport and St Mary's airport on the Isles of Scilly will also be updated.

Nearly ^7m of European funding has been earmarked for the work.

Land's End airport was closed to flights for three months last winter after it was waterlogged.

About 800 metres of hard surface, replacing the current grass landing strip, will be laid over three weekends in September.

Diana Mompoloki, the development manager for the Council of the Isles of Scilly, was "very confident that everything would be ready for the autumn".

The Policy and Resources Committee on the Isles of Scilly heard on Tuesday night that ^6.7m had been endorsed by the European Development Fund.
Wet winter victim

The majority of the cash will be spent on St Mary's airport but around ^1.2m will go towards work at Land's End.

It is half the estimated cost of hardening the runway so the Isles of Scilly Steamship Company, which owns the airport, will fund the difference.

The grass runway at Land's End was a victim of the wet winter with 521 hours of flying lost, according to the Steamship Company.

It is the sole provider of commercial flights to the islands, which have a population of 2,200.

On St Mary's more than ^2m will be spent on new hard runways to replace the grass ones, and bringing the present hard runways up to date.

About ^100,000 will go on updating navigational aids and lighting so that aircraft can land in foggier weather .

More than ^2m will be spent on improving the terminal building.

Much-needed resurfacing work will take place on two of the four grass runways at Land^s End Airport following reports of a landmark rise in pre-tax profits.

The runways at the airport, which provide an air link to the Isles of Scilly, were often closed in winter after they became waterlogged during bouts of poor weather.

Operator, The Isles of Scilly Steamship Company, reported strong financial results after a year of record investment, which included a ^2million upgrade of its Scillonian passenger ship and a ^1million upgrade of its Land^s End terminal.

Andrew May, chairman of the company, said he expected work, which would see the runways covered with tar macadam, to take place at the end of the calendar year.

He said: "Our strong cash position means we will continue to invest in strengthening the route, including plans to resurface two of the four grass runways at Land's End Airport this calendar year.

I have read elsewhere that two of them are stored at Newquay, pending decisions.

Bizarre things happen in aviation. When I first started learning to fly at Filton, in 2005, there was a Boeing 747 with 3 engines, and weights hanging from the mounting for the fourth, parked on the jet apron. I know it had been there a while, as I had seen it en passant. I think the livery said Southern Winds. After a few lessons, I asked my instructor how long it takes to change an engine on a jumbo - the true answer, I now know, is around 5 hours. "Oh no", he said. "The engine's been taken off to stop someone shinning over the fence in the dead of night, starting up, and buggering off." The airline had gone bust, and debt attaches to the aircraft. So anyone buying it would have to settle up before taking it away. He reckoned it would end up being dismantled on site. But one day, almost a year later, I arrived for my weekly flight, and it was gone. Someone had paid a bill, the maintenance guy stuck the engine back on, the pilot filed a flight plan for Shannon, and away it went. Amazing these things can happen, but they can and do.

The economics of passenger transport by air are crazy

Talks are under way to 'resurrect helicopter link' says MP

A Cornwall MP is "in discussions" with operators to resurrect the helicopter link between Cornwall and The Isles of Scilly, he said.

St Ives Liberal Democrat MP Andrew George said he had been in talks with a helicopter firm which is "very interested" in providing a service.

British International axed its service between Penzance and Scilly in October.

Mr George said he wanted to "inject hope" into the community but said it was important to "remain cautious".

He said Yeovil based manufacturer, Augusta Westland was "very interested in making one of their 18 to 19 seater helicopters available to put a service on".

Mr George said potential operators Bond and CHC will now be approached to "look at possibilities".

He said: "Some of the significant elements of the jigsaw puzzle that need to be put together to resurrect the service are being worked on as we speak.

'Heliport site identified'
 
"Let's see if the Isles of Scilly and the Penzance communities get behind the idea and give it their full support and that will obviously assist in persuading other people to come on board."

Mr George said "a site in the Penzance area has been identified" for the heliport but that he could not comment further on the location.

British International stopped its year-round service linking the islands, some 28 miles (45km) south-west of Cornwall, after running into financial problems, blaming falling passenger numbers and rising costs.

Money to subsidise a helicopter link was ruled out by Transport Minister Norman Baker in October.

Mr George said withdrawal of the "lifeline service" had hit islanders, medical services and the economy.

"The winter that the islanders have experienced has perhaps opened a lot of peoples eyes as to why we need another transport provider to the Isles of Scilly," he said.

A ferry, the Scillonian, runs for only seven months a year; and the only other link, the Skybus plane service, which flies from Land's End Airport and Newquay in Cornwall, is weather-dependent. Neither service is subsidised.