Merseyside shipbuilder Cammell Laird has announced a management restructuring programme to tackle heavy losses at the group following the cancellation of a £51m contract.
Chief executive John Stafford has resigned, and will be replaced by finance director Jon Schofield until a successor is found. The board will be cut from 11 to six.The company announced pre-tax losses of £3.5m for the six months to the end of October, and said the Costa Classica dispute would have a ‘significant impact’ on its full-year results.
Italian cruise ship Costa Classica had been due to arrive at the Merseyside yard to have a new hull section fitted in November, but the vessel was turned back en route to the UK. The loss of the contract led to 450 job losses.
But the company remained upbeat about its ability to recover, and said both the ship repair market and demand for its skills were growing.
Sandy Morris, a shipping industry analyst for Dutch bank ABN Amro, said the company — with an order book worth £41m — should be able to trade itself out of any problems. ‘The issue is for Cammell Laird to sort out the cashflow implications [of the contract termination], which I think we’ve now seen the worst of, and begin to reduce the debt. It’s not pretty, but it’s not yet a disaster.’
Cammell Laird, which has shipyards on Merseyside and Tyneside, said it has sought legal advice and believes it has a strong case to recover costs and damages from Costa Crociere, the Italian owners of the Costa Classica. The company said it had found work to replace the contract, but the delay, a year into a 16-month contract for which it has received no payment, has left it with substantial costs.
An agreement with Luxus Holdings to build two ‘six star’ cruise ships worth more than £300m, is still awaiting loan guarantees from the DTI.