UK yard reports 53% rise in post-tax profits

Falmouth, UK-based Pendennis Shipyard has reported strong performance in 2018, with record turnover and a 53.1% increase in post-tax profits – thanks, in part, to a £1.2m tax credit which accounted for 27.8% of the profit for last year. The company has also acquired a new 800-tonne travel lift.

The highlights of the year, as recorded in a recent filing with UK business register Companies House, show the following key elements:

• Turnover rose 11.9% to £57,223,864 in 2018 compared with £51,121734 in 2017; both turnover figures were company records in the respective years
• Cost of sales increased 12.8% to £44,220,148 as against £39,217,255 in 2017
• The resultant gross profit was up 9.2% year-on-year reaching £13,003,716 in 2018 compared to £11,904,479 in 2017
• After administrative expenses, the operating profit for 2018 was about 1% higher at £3,336374 as against £3,302,987 in 2017
• The profit before tax came out at £3,281,492 for 2018 compared with £3.15m in the year previous, but due to a tax credit of £1,264,689 last year the profit increased by 53.1%
• The post-tax profit therefore totalled £4,546,181 for 2018 as against £2,969.121 in 2017

Other news contained within the filing was that Pendennis has invested in a new 800-tonne travel lift which is now operational and did its first lift a few days ago. In the annual strategic statement, Pendennis said: “For 2019 the company has on order an 800-tonne travel lift to bridge the gap for 50m-60m (164-197ft) vessels between the construction halls and the covered dry dock. This purchase is covered by agreed finance lines.”

The directors described 2018 as “an exceptional year for turnover growth” and the company forecasts a fall back in 2019. The directors said they are “content with these results” for 2018.

“The directors believe the policy of long-term investment in the Pendennis brand; employee development, yard facilities and commitment to quality will deliver to our clients and stakeholders now and in the future. The company has achieved planned employment growth in skilled trades to meet demand and is training for the future by expanding its award-winning apprentice scheme from bi-annual to an annual cohort of 12-14 apprentices; there are currently 64 in employment training.”

The other main project for Pendennis currently underway is the development of its new facility at Vilanova Grand Marina in Barcelona which will service clients in the Mediterranean.

The number of employees increased from 394 comprising 317 production and 77 administration in 2017 to 429 in 2018. The latter was made up of 345 production and 84 administration. The total labour cost expenditure increased 12.1% to £13,905,440 in 2018 as against £12,401,977 in the year previous. Directors’ remuneration increased 25% to £272,262 from £217,706.