Any accountants out there

[JeremyF]

I don't want to start another rant about rip-off marina's, but I would appreciate someone who can really look at a P&L and balance sheet to determine and tell us how profitable South Coast marina's are, compared to equivalent high-capex businesses in UK.

We're often told that the cost base of the Solent marina is much greater than elsewhere, but how much greater is it? Does it fully explain the difference?

Perhaps John Watson, MDL's MD could contribute to this understanding. He is a regular contributor to the forum, and has a genuine desire to communicate.

There remains a concern amongst many that pricing is driven entirely by excess demand. While I would expect profitability to be good in these conditions, are they in line with businesses in normal conditions.

Jeremy Flynn

www.yacht-goldeneye.co.uk
New pics 11.02.02

 

[Boatman]

Jeremy,

I would be delighted to have a look at any P&Ls and BSs you want if you give me a few clues as to where to get them from the web, am not UK based so not current on which companies are involved.

Peter

 

[ParaHandy]

Send me PM with your e-mail address and I will post you several years accounts of a typical UK marina on south coast. I, too, was interested in where the money was going to and would be interested in your views. As a property cpy, which is what they are, I don't think you'll see much to justify many assumptions voiced here and elsewhere. But, have a look yourself.

Have absolutely nothing to do with any marina cpy other than having to buy one of their expensive berths.

 

[jimi]

I think that you will find that pricing policy in any market situation is governed by the laws of supply & demand and commercial ventures will target areas with higher profit potential due to an excess of demand over supply. The only answer is to either reduce demand or increase supply. Perhaps there is potential for an owners cooperative to get together for a self build Marina on Southampton water?

 

[JeremyF]

Thanks for the ideas, but at this stage I'm not looking for solutions, but for understanding. There have been loads of words on the ybw forums about 'rip off' marinas. I just was hoping that this time there could be a cool analysis of the level of profitability.

An earlier posting suggested that the right benchmark might be a property development company. I suspect that a regular property company might look different as it invests capex in land and bricks, then sells. How about a service-orientated property company that invests in land and bricks, then sells sevices on a time basis. I think the John Lloyd lesure centres is a ltd company. Its business is pretty similar to MDL's. How do the key ratio's compare?

Jeremy Flynn

www.yacht-goldeneye.co.uk
New pics 11.02.02

 

[tcm]

And then what?

I hope they make lots of money. I would. I'd make sure the prices were higher than the less-desirable places, but not so expensive that all the customers would clear off and everyone gave me too much stick in the press. I'd do the same even if I inherited the marinas or won them in a game of poker, and even if everyone in the marina was happy to work for nothing so the cost base was zip.

I find it highly amusing that those for who the market economy has worked well and allowed them to buy a boat then want to explore the possibilities that non-market based pressure can be brought to bear so that the mooring charges are lowered.

But you are not alone. Our bone-headed finance minister Gordon Brown, famous for dithering for years and years (and that's about getting married, never mind any matters of state) has seen fit to comment on the charges the banks make to small businesses. It has nothing to do with him, imho. Perhaps the bank directors or shareholders or pension funds are hoping to save up for a boat? And the small businesses people already have a boat?

In the UK, with a boat, I'd thank my lucky stars. There's no special boat registration tax as there is in France. And the only way to get a space and keep it year after year is to buy one. A 45 foot berth runs to around £100k, plus service charge of £1500 pa. How would you like some European harmonisation on this matter?

I think that the price of berths could easily double. Or, just double it for the complainers! Cos they'll never be happy, see. Whereas the happy people will contribute towards a the marina being a nice place. Yes, I think I'd implement this system, interview everyone and chuck out the miserable gits, or charge them extra.

A friend took a miserable customer at a former company out for lunch. The customer offered to pay next time. But at that next time, when the bill came the customer hesitated, hoping my friend would pay, and she did. This was the most expensive lunch he had ever eaten. He was charged at least £10,000 extra over the subsequent years for not paying for that lunch.

"Not fair!" might same some. But this is the embodiment of the market system. Prices are market driven, not cost-based. A seller can decide to increase the charges, and they need not apply universally. They need not be "fair". The instrument of fairness is that the customer has the choice not to buy and go elsewhere. The word "fair" is applicable to most board games and some sports, but only to a limited extent: practising beforehand is essntially not "fair".

Sermon over!

 

[jimi]

Re: And then what?

I agree with most of what you say and the sentiments expressed, the only thing that I would add is that in some cases the barriers to entry may be sufficient to distort 'fair' competition and perhaps in the South the lack of sites for moorings may be such an entry barrier.

 

[tcm]

Re: And then what?

Good point (i was going to say fair point!) . Monopoly/cartel rules must be applied.

 

[JeremyF]

Re: And then what?

I think its what the economists call ' a complex monopoly' i.e. a number of players,? but plenty of barriers for market entry.

Gordon Brown took this view about banks in respect of small business customers. Perhaps the shortage of mooring counts as a barrier to entry.

But, enough of this speculation. Where can we find MDL's accounts for 2001, and how do they compare with equivalent property-based businesses?

Jeremy Flynn

www.yacht-goldeneye.co.uk
New pics 11.02.02

 

[romany123]

Re: And then what?

TCM
hahah Bet you feel beter for that. Nice post through cant find them listed on the markets shame lol

Dave

 

[Guest]

Re: And then what?

The laws of supply and demand only work in a free market, by definition.

The problem in England is that there is not a free market because legislation makes it impossible to vary the supply. I have been twice associated with attempts to make a marina. In each case it was opposed by just about everybody you could think of and there was no chance.

The clincher was that it would disturb some algae that was only to be found in that area. There seems to be an organisation of pseudo-pscientits prepared to hire themselves out to opponents of any development. The King's Lynn by-pass was held up for years because it would have crossed the breeding ground of a certain caterpillar.

Sadly, the RYA does not seem to be active in this field. They need to set up a sort of counter-expertise system.

William Cooper

 

[Guest]

Tough one Jeremy - I'll be damned if I do and damned if I don't! Let me reflect.

 

[JeremyF]

Its safe, John. This is no rant

Its a difficult one, John, for you.

On balance, I think that the majority of users have no idea of the capex and opex involved in a marine property business. However, raw numbers aren't neccassarily safe, as they will try and compare you with Sainsbury's. Why not compare with John Lloyd leisure, or an equivalent high capex / high opex service business?

Jeremy Flynn

www.yacht-goldeneye.co.uk
New pics 11.02.02

 

[Guest]

Re: Its safe, John. This is no rant

Someone once said that "a cost is a fact, a price is a decision" - and he was right, up to a point. Anyone who has been in business will be very cynical about the accuracy of accounts, audited or not - pace Enron. However, the decision on what to charge is taken on the basis of what the market will bear.

There is a potential complication in that marinas, because they are classed as ports, are I believe not subject to the usual monopoly laws. (I seem to remember a complaint against mdl being rejected for that reason)

The real puzzle is not south coast marina charges but why so many people pay them so that they can sail on the marine equivalent of the M25.

 

[jimmie]

Re: Its safe, John. This is no rant

Same reason as most monopolies survive ... no real alternative!

 

[jimmie]

Re: And then what?

might be worth a look at this month's YM .. apparently French marina charges are a quarter of ours!

 

[Guest]

Yes there are that is part of the problem,too many dammed accountants looking at the bottom line,which is why you rich marina types are paying exhorbitant fees.