Historic Appledore shipyard wins minesweeper contract

A Devon shipyard rescued from closure has been boosted by a £55m Ministry of Defence (MoD) deal to refurbish a minesweeper. 

It is the biggest announced contract for the Appledore site, where vessels have been built for nearly two centuries, since it reopened in 2020 under the ownership of Titanic maker Harland & Wolff (H&W). 

Appledore was previously operated by Babcock but closed in March 2019. The deal involves the refurbishment of a British ship, HMS Quorn, which was decommissioned by the Royal Navy In 2017. 

The ship was part of a fleet using high-definition sonar to scour sea-beds for mines and lost explosives. It will be given a new lease of life serving with Nato ally Lithuania. H&W said the value of the contract, awarded by the MoD and the Lithuanian Defence Materiel agency, had the potential to increase through additional equipment and further upgrades. It is its first contract in the sector. 

Chief executive John Wood hailed it as a ‘watershed’, providing ‘the breakthrough that we needed’ to enter the market. 

The shares rose 14.1 per cent, or 1.75p, to 14.13p on the deal. The company ‘strongly believes that this will significantly enhance the company’s reputation in the market and pave the way to securing future defence and government contracts’. 

Appledore, founded in 1855, has built more than 350 vessels over its history including military and cargo ships, ferries, superyachts and oil industry support craft.

Its work has included building sections of the £3bn aircraft carrier HMS Queen Elizabeth. 

After closing in 2019 it was acquired by Harland & Wolff’s parent company Infrastrata, which subsequently renamed itself Harland & Wolff. 

Appledore’s first contract win under the new ownership was a deal worth more than £2m to build a steel pontoon for an RNLI lifeboat station under London’s Waterloo Bridge, which was announced last November. 

Harland & Wolff, which dates back to 1861, is best known for its giant site in Belfast where the Titanic was built – and where it today still operates one of the largest dry docks in Europe. It also now owns two shipyards in Scotland as well as the Islandmagee gas storage facility in Northern Ireland. 

H&W is also part of a consortium which is one of four shortlisted by the MoD in the competition to design and build support ships for Royal Navy carrier groups. City broker Cenkos said in a note to clients, following the latest announcement: ‘This is a significant breakthrough for the company, being its first contract in the defence sector, and gives H&W a strong platform to build upon as it pursues additional pipeline opportunities. 

‘Russia’s invasion of Ukraine highlights the valuable role H&W can play in supporting the defence industry, as many Nato countries (including the UK) look to increase their defence spending.’ 

The note also highlighted that the deal had ‘established a new UK competitor in the industry’ widening the MoD’s choice in the sector beyond BAE Systems and Babcock. 

The MOD said the deal would support 100 jobs at Appledore and the ship is expected to be delivered to the Lithuanian navy in 2024. 

Minister for Defence Procurement, Jeremy Quin, said: ‘I’m pleased that this multi-million pound contract will see a former Royal Navy mine-hunting vessel restored and regenerated in a British shipyard, supporting UK jobs and strengthening shipbuilding in the south-west. 

‘Lithuania is a key Nato ally and Joint Expeditionary Force partner, and this mine-hunting vessel will bolster Nato maritime capability across Europe, ensuring the Alliance remains ready to respond to evolving global threats.’