A&P Group focuses attention on Tyneside and Falmouth yards after profitable year

Shipyard operator A&P Group says it is determined to take advantage of its Tyneside and Falmouth sites as it looks forward to a strong pipeline of military work.

The repair and conversion specialist reported a boost in turnover by 6% to £100.2m in the year to the end of March 2023 as it said occupancy levels at its yards had increased. But the firm, which operates the largest dry dock on England's east coast at Hebburn, South Tyneside, as well as bases on the Tees and at Falmouth, warned that expectations about this year's performance were lower thanks to the near completion of one part of a 10-year Royal Fleet Auxillary contract for the MoD on the south coast.

New accounts also show a dip in operating profits from £4.9m to £4.6m, before charging £900,000 for an asset impairment in its Tees business. A&P bosses said costs had put pressure on margins but that commercial ship repair and fabrication revenues both improved, largely driven by MoD work.

In the North East particularly, where work is under way on parts for the Royal Navy's forthcoming Type 26 anti-submarine frigates, A&P said it was handling generally larger projects. The firm is "pushing hard" to drive more work through the Hebburn yard, which is the site of the group's largest build contract - support work on the Dreadnought Class submarines for BAE Systems.

This was underpinned by returning customers with smaller dredging and offshore support vessels work. Three large scale repair contracts were said to have boosted the Tyne site's occupancy during the year. Meanwhile, the group's port operation in Falmouth reported increased revenue with strong towage activity and improved cargo handling. And its south west handled a major refit of the Royal Fleet Auxillary HMS Lyme Bay and significant work on HMS Scott.

A&P director David McGinley wrote in the accounts: "The group has concentrated on the groundwork laid in previous years by continuing to raise its profile in both the traditional ship repair and conversion market and also in the renewable energy, the oil and gas sectors and in modular fabrication for the ship building industry. These together with the generation of a pleasing result by the management and workforce continue to confirm A&P Group as one of the premier ship building and repairing, ship conversion and marine engineering businesses in the UK."

He added: "The group is determined to take advantage of the Falmouth and Tyne sites, which are well placed to secure work as part of the supply chain for, and to provide support services to, the National Shipbuilding Strategy, the emerging renewable energy sector, and also into the oil and gas and heavy engineering industry. The board recognise that activity and opportunity and in the latter sector are improving as wholesale oil prices increase."

In October last year, A&P Group announced it had solidified its partnership with Merseyside-based Cammell Laird, with both companies joining together under the umbrella organisation APCL, along with Atlantic & Peninsula Australia and Neway Industrial Services, based in Birkenhead.

Speaking after publication of the accounts, Mr McGinley said: "It has been an extremely successful year and one we are committed to building on in 2024. We have won new business and continued to exceed our customers’ expectations across a wide range of sectors.

"And by bringing A&P Group under the APCL Group banner, we can harness an even wider range of expertise, knowledge, sites and technical assets. This is something our customers will benefit from both now, and in the future. All of this puts us an extremely positive position going forward.”