Redhall’s Jordan Manufacturing business has secured a key role in support of Cavendish Nuclear, a subsidiary of Babcock International, for the delivery of specialist handling and containment systems to process material at the Cumbrian nuclear plant.
Earlier this month Babcock announced that Cavendish Nuclear had been awarded a 10-year contract with Sellafield. Worth up to £95m over the first three years, Cavendish Nuclear will provide Sellafield with design, manufacture and supply of complex bespoke equipment for the treatment and management of nuclear materials.
Jordan Manufacturing has secured, through a Teaming Agreement with Cavendish Nuclear, a key role in the delivery of this contract and will manufacture containment systems and associated process equipment. It is anticipated that this will be worth up to £18m over the first three years.
Phil Brierley, CEO of Redhall, said: “We are delighted to have secured a key role supporting Cavendish Nuclear in the delivery of this strategically important programme.
“This opportunity clearly reflects the capabilities Jordan Manufacturing has developed over many years in the supply of highly complex containment systems and gives the business good visibility over its order book for a number of years to come.”
Analyst John Cummins at WH Ireland said: “The agreement is expected to be worth up to £18m to Jordan over the first three years of a 10-year contract between Cavendish Nuclear and Sellafield and provides very good order book visibility for Jordan over the next few years.
“This positive news vindicates management’s confidence at the time of the full year results earlier this month in its encouraging outlook for the group. On the back of this announcement, we have left our two year forecasts unchanged, this contract helping to underpin these expectations. Our estimate of fair value for the shares remains unchanged at 14p, implying 75 per cent upside from current levels.“
Earlier this month Redhall said its turnaround is mostly complete and it expects its £8m contract with Hinkley Point C will be concluded by the end of next summer. Redhall has experienced unforeseen delays on some of its nuclear projects which has led to work being deferred into next year. The most significant of these relates to its work on Hinkley Point C. A growing proportion its order book is now manufactured product, principally for the nuclear sector.