Coronavirus And The Broads

[unclemike]

starting again andrew you asked a question i answered it END OF

[vanessan]

It occurs to me that it is highly likely that by the time some of us get back to our boats, Roy’s and Latham’s will be getting ready for you know what   - (Sorry!!) I would imagine both stores would have ordered in for spring and summer so a new bikini or pair of speedos might end up all C*******s wrapped! Just a thought.

[Wussername]

4 hours ago, chameleon said:

starting again andrew you asked a question i answered it END OF

Gulp! I am beginning to wish I had not asked.

 

[Guest Jayfire]

3 hours ago, vanessan said:

It occurs to me that it is highly likely that by the time some of us get back to our boats, Roy’s and Latham’s will be getting ready for you know what   - (Sorry!!) I would imagine both stores would have ordered in for spring and summer so a new bikini or pair of speedos might end up all C*******s wrapped! Just a thought.

I know I wouldn't mind unwrapping My Grace from a bikini on Christmas    morning..... or any other time. In fact, just forget the bikini 

[vanessan]

4 minutes ago, Jayfire said:

In fact, just forget the bikini 

But then you’d have nothing to unwrap! 🤨

[Guest Jayfire]

2 minutes ago, vanessan said:

But then you’d have nothing to unwrap! 🤨

I'd still have a fudging great time though 

[Wussername]

On 06/04/2020 at 11:54, Vaughan said:

And how have they invested that profit, instead of just paying exorbitant tax on it?  By investing it in capital, for the building of new boats, I imagine?

And do we think that £500,000, is a lot of profit, for a business like those that we are now calling "fat cats"?

Indeed. Does this figure of 500,000 not relate to the annual turnover of the company , is relative to the annual turnover, profitability and viability of the company for the future. Concern which surely must be taken into consideration for the future plus the companies assets, it's liabilities. Not mentioned by some. They prefer to believe that the owners trouser this sum of money at the end of the season.

Watch very carefully Easyjet, take note of other airlines, take note of the recent demise of one of our local airlines. We live in very precarious times the Broads hire industry is not immune to financial gravity.

Finally I must refer to the present discussion with regard to the Broads Authority. For those who have a disposable income to enjoy the broads and I emphasise disposable income for boating that they resent paying their toll. I'm OK with that. However may I ask for that which you wish to return.

Edited April 7, 2020 by Wussername

[ChrisB]

Leaving the BA to one side, the survival of many of our seasonal businesses will largely depend on their financial health when they entered this crisis. In fact the same can be said for the private individual.

For the last 12 years cash reserves, be they commercial or private have become unfashionable. High monthly committments on goods not owned either by conventional finance or lease have become the norm. This has lead to a situation  where many of these businesses can not weather a poor season and families could not suffer the loss of just one months incomings. There are something in the region of 6.5 million adults in this country with zero savings, living week to week, month to month.

The help the UK Government is giving business and the individual is, as they say unprecedented, but is a holding strategy. All will depend on the world we find after Coronavirus. What it has done to jobs and confidence. One thing is certain indebtness will not have improved and I think that many families, after this experience might decided getting their finances in order is more important than holidaying! Often on a credit card and paying for it later.

A lot will depend on the length of this crisis. If the 2020 season, and by that I mean not only holidays but sporting events, shows, festivals, restaurants and pubs etc. Is a total write off and we then enter the Winter period, then a true picture will only begin to emerge during Q2. 2021.

One aspect that could benefit the domestic leisure market is without doubt the Airline Industry will see pretty drastic contraction, which could make the cheap flight a thing of the past.

[Vaughan]

Very well said, Chris.

Holiday bookings depend on disposable income and I doubt there will be any of that around this year, after the crisis.

A lot of people even take out finance, just to pay for their "right" to an annual holiday. I don't suppose they will be doing that again for a while!

[Vaughan]

On 06/04/2020 at 14:08, Wussername said:

May I ask who will pay the ferry man?

And will the ferry across the river Styx to Hades, still be a "necessary journey" by then? Or will we, as Greek Mythology had it, be forced to linger as ghosts on this Earth?

Now there's a thought, to start my day !    

[grendel]

when you relate the profits shown to the cost of a new boat for the fleet, I suspect the figures will be looked at in a different light, a new boat will probably cost in the region of £300,000 (i am sure an expert out there will correct me on this, as its just a guess, but it has to be in that region) so from the profits a boatyard makes they barely make enough to cover the cost of a couple of new boats should they be necessary, and the bigger yards will be ploughing profits back into the business to keep their fleets up to date, so we may not see any new boats coming off the ways next year, this will impact on the boatbuilders, etc down the line, as all these businesses rely on each other, and on the tourists that hire the boats.

[RS2021]

1 hour ago, grendel said:

a new boat will probably cost in the region of £300,000

My guess is that may be the retail price for a new boat, but the large yards build their own and I suspect a significant part of the cost is labour. Now if a yard goes into this crisis in a healthy position, does it furlough its staff and save costs, or does it keep the staff on, build new boats and then sell the odd old one off to balance the books on the material costs?

[Vaughan]

1 minute ago, RS2021 said:

and then sell the odd old one off to balance the books on the material costs?

So who's going to buy the old one, with the Broads closed?

[Vaughan]

Hire yards are always trying to modernise their fleets by building new ones : it is all part of the business and is also why the vast majority of private cruisers on the Broads are ex hire boats.

After all, I am sure you would not expect Hertz to hire you a 25 year old car?

"Have you got a Cortina Mk 11 available next week, please"?

[marshman]

I think a new one would cost less than that, leaving out labour, but can you leave out labour? After all if they were not building a boat, they would be doing something else!

I think this post has gone a little awry - as I pointed out,clearly its not that easy to make money or the Broads would be awash with new start ups, not vice versa.

[Vaughan]

6 minutes ago, marshman said:

I think a new one would cost less than that, leaving out labour, but can you leave out labour? After all if they were not building a boat, they would be doing something else!

Incidentally, a yard will always factor in the cost of labour when building, as it is an investment of profit into capital, in the accounts. In other words : "ploughing it back in".

The Crown Classiques that Crown Cruisers were building for France in the late 90s, were costed at over £200,000 each.

[unclemike]

if you read the information , they factor in investment to avoid paying tax, the figures quoted are after tax, they would not pay tax  and then invest that would be like throwing money away

[Vaughan]

Sure, but if I had said they invested capital as tax avoidance, that would surely have attracted comment on here, like wasps around a jam pot!

[unclemike]

26 minutes ago, Vaughan said:

Sure, but if I had said they invested capital as tax avoidance, that would surely have attracted comment on here, like wasps around a jam pot!

shouldn't its common practice

[Vaughan]

To those who understand business, perhaps. To those who think the yards are "fat cat shareholders", perhaps not.

[RS2021]

1 hour ago, marshman said:

they would be doing something else!

I think that's my point. At the moment if there is nothing else to do, you either pay staff to do nothing, furlough them, or - if you can afford it - invest in the capital base of your business.

[Meantime]

10 hours ago, Wussername said:

Indeed. Does this figure of 500,000 not relate to the annual turnover of the company , is relative to the annual turnover, profitability and viability of the company for the future. Concern which surely must be taken into consideration for the future plus the companies assets, it's liabilities. Not mentioned by some. They prefer to believe that the owners trouser this sum of money at the end of the season.

Watch very carefully Easyjet, take note of other airlines, take note of the recent demise of one of our local airlines. We live in very precarious times the Broads hire industry is not immune to financial gravity.

Finally I must refer to the present discussion with regard to the Broads Authority. For those who have a disposable income to enjoy the broads and I emphasise disposable income for boating that they resent paying their toll. I'm OK with that. However may I ask for that which you wish to return.

The figure I quoted was net profit. The figures I was looking at, the turnover was approx. 10 times that amount.

Normal accounting practice is to show turnover minus cost of sales to reach the gross profit. A few other adjustments are then made for admin expenses, exceptional expenses, interest received and payable to reach a profit before tax. Net profit is the figure after corporation tax.

For the example I quoted above the 500,000 was net profit. Net profit is normally retained within a company to swell it's balance sheet, kept in reserve for contingency, or some or all of it paid as dividends to the shareholders. Please note I did not use the words fat cat share holders. I don't have a problem with any of the above. It is money hard earnt by the people who run the business. I do have a problem with the BA making voluntary provisions at the expense of the privateer who in many cases has less disposable income than the hard working share holders mentioned above.

[Meantime]

30 minutes ago, Vaughan said:

To those who understand business, perhaps. To those who think the yards are "fat cat shareholders", perhaps not.

Vaughan you perhaps missed a vocation as a politician  

I quoted the figures for net profit taken from companies house. I haven't attacked those companies, or said that making profit is wrong. In fact I have said the reverse, however that doesn't change my view that any company retaining £500,000 in profit doesn't need voluntary help from the BA. Those companies should be able to weather the storm, even if it means some contraction of the business. Remember many of the bigger yards have grown over the last few years which is why their turnover and profit has gone up.

Your use of the words fat cat share holders is emotive and I'm sure meant to be. It is unwarranted in the context of the posts I have made and I went back and rechecked this thread to find out where it originated from. It was from a post you made the other day. Can you point out to me where on this thread anyone has suggested other than yourself, these are fat cat share holders.

[Vaughan]

I agree with what you say about the accounts of a limited company.

Funny though, that you don't mention the business bank loan, the marine mortgage on the new boats, or the seasonal overdraft. 

I can promise you that hire yards don't come into profit, in terms of cash flow, until sometime in September! And then they are looking at paying all the maintenance and repairs on the fleet,  for the next 6 months. It is nowhere near as simple as it might seem in the accounts.

I think if I were a director and shareholder of one of those big yards and had only arrived at a £500K profit after a normal season I would be concerned for the solvency of my business, anyway.

You seem to have taken my general remarks personally which you have no need to : You also take exception to "fat cat" although I am sure you know what I was trying to say. As to its origin in this discussion ; it may well have come from that chap on "the other side" that we were directed to, for his opinions.

[Meantime]

2 hours ago, Vaughan said:

So who's going to buy the old one, with the Broads closed?

Thread drift alert!

I have mentioned before and thought for some time that the hire yards are backing themselves into a corner. The old model of building new boats and selling off the old ones seemed to work well. However in my opinion that all changed around the year 2000 with the advent of the Alpha 44's. Most of the new builds since then have been much larger and more expensive. I purchased my boat an ex hire boat in 2004 and it was 12 years old when I purchased it. If I look at all the hire boats that are between 12 and 20 years old now, there is virtually nothing that I would want to buy because they are all too large. I can only think of one RC45 in private hands and a couple of Alpha 44's in private hands. One was built for the private market and one is an ex hire boat. When I bought my boat it was 12 years old and there were many other 12+ year old hire boats for sale and all of them sold over the course of that year.

The above  is more relevant when you consider that a number of the hire yards have grown in size recently because of acquisition and new builds, but haven't been selling as many used craft. However there are times, now being one of them, when they may need to contract their business in order to survive. They may need to stop building new craft and sell some older boats te release some capital to keep the business afloat in the short to mid term until they are able to start building the business back up again.