Avingtrans enters into second phase of Sellafield contract

Avingtrans announced on Tuesday that Stainless Metalcraft, part of its process solutions and rotating equipment division, has agreed to enter into the second phase of the contract to provide high-integrity stainless steel storage boxes with Sellafield.

The AIM-traded firm said the three cubic metre box contract was now worth up to £70m, and represented an approximately £20m uplift to the original contract awarded in 2015.

“Moving on to phase two of the contract is a tremendous achievement for Metalcraft and is just reward for the hard work and expertise the team has put into developing the three cubic metre programme over the last five years,” said Austen Adams, managing director of Avingtrans’ process solutions and rotating equipment division.

“Having proven the technology and manufacturing processes involved, we are now in a position to ramp up production further and begin the transition towards large scale volume production, which will enable us to support Sellafield in this essential decommissioning work over the coming years.”

Avingtrans said the agreement to exercise the option marked Metalcraft's successful transition to the second phase of the box work with Sellafield.

The boxes would be used to store intermediate level waste retrieved from silos at legacy locations in Cumbria.

In environmental terms, the company said the storage project represented “one of the most positive and important” intergenerational equity deliverables of the next few decades, developing and implementing “critical technology” to “bequeath a pristine environment to posterity”.

As part of the transition, Avingtrans said Metalcraft would be producing around 1,000 boxes over the phase, which was currently expected to take six years, with revenue being recognised evenly across the period.

The board said the contract underpinned its outlook for the 2022 financial year and beyond, with the directors “pleased” that Metalcraft's pipeline was expanding.

“Winning the initial contract back in 2015 was a landmark moment for Metalcraft, allowing us to invest significantly in both infrastructure and personnel, to create a world-class centre for the manufacture of intermediate level waste containers, and boosting our apprenticeship programme,” said Avingtrans chief executive officer Steve McQuillan.

“This training programme can now be securely extended for the long term, providing skilled engineering apprentice roles in a relatively deprived area of the UK.

“Securing the next phase of works wholly justifies that investment and vindicates the board's decision to refocus what was previously our energy and medical Division on new markets.”

At 1421 BST, shares in Avingtrans were up 6.27% at 356p.