Competition between marinas for berths

[ylop]

Well, they had an EBITDA of over £7M last year so they’re doing just fine as far as I can see.

Yes, although EBITDA is not quite the same as actual money you make - they were very heavily in debt, and obviously have quite an extensive asset base depreciating in salt water! They made an operating loss.

if you went and looked up the profit you’d have seen it was on a turnover of £23M. So that is 2M a month across the portfolio - or about £175k per marina per month, not £1M as you claimed!

 

[lustyd]

if you went and looked up the profit you’d have seen it was on a turnover of £23M. So that is 2M a month across the portfolio - or about £175k per marina per month, not £1M as you claimed!

Which is plenty. Recently graduated MBAs focus on numbers as they destroy great businesses that other people created. Fundamentally a business has to serve the customer otherwise it disappears.

In this instance that will mean marinas disappear and become expensive real estate when the marina becomes “untenable” as a business because the “return isn’t high enough”.

Across the business they need to make £60k/ month to deliver an 8% ROI on the purchase price of the group. That’s not hard at all and leaves plenty of fat to serve customers properly. I’m not even complaining about marina pricing, just shitty service as the business suffers enshitification in the name of returns for investors who know nothing about boats.

 

[newtothis]

EBITDA. Earnings Before I Tricked the Dumb Accountants.

 

[lustyd]

EBITDA. Earnings Before I Tricked the Dumb Accountants.

I always find it weird how these things are reported. “I was going to make a bunch of profit then decided I’d make a loss instead”.
Of course I understand the theory, but in reality it very quickly becomes tax avoidance. I guess that’s the point though

 

[Snowgoose-1]

I think the question is - how much cheaper would your “next nearest” marina need to be to temp you to switch? Obviously price is a factor but whether it’s convenience, the cafe, the cleanliness of the toilets, the helpfulness of the yard staff, the attitude of the chandlery owner, the reliability of the shore power etc - there are many other factors that mean small price differences might not be enough. Then there’s the complications of comparing like with like eg. An annal package v. 6 months berth + lift + cradle etc.; a discount for paying in one instalment.

Yes, I quite agree.

I was thinking more regarding the fairly recent decline in boating. Perhaps making marinas more likely to chase our business rather
than having waiting lists.

In reality, this may take some time as boats would need to vacate berths and settle for hardstanding until sold or scrapped.

At least on the East Coast, there is little difference between marinas price wise which I find frustrating all else being equal. Particularly in distance from the open sea.

 

[Sailing steve]

I don't get how marinas can be so full and charges rising significantly at a time when boat sales have fallen off a cliff.

Unlike wooden boats of old fibreglass ones are durable enough to guarantee an future income stream for marinas for decades and those marinas will all carefully manage their berth availability to keep themselves full thereby maximising profit and at the same time preventing a downwards price war breaking out amongst the various operators due to excess capacity.

The demand for berths is fixed by the number of boats out there. If you look at next year's berthing costs and say sod that and sell your boat then whoever buys it will simply take your place and continue to pay an eye-watering sum every year for somewhere to keep it.

 

[ylop]

I always find it weird how these things are reported. “I was going to make a bunch of profit then decided I’d make a loss instead”.
Of course I understand the theory, but in reality it very quickly becomes tax avoidance. I guess that’s the point though

Actually in this case I’d say it’s possibly the other way round - we are losing money* but have dressed it up so our potential looks good and we can justify the sale price we want!

*in cash terms the question is do you have more money at the start or end of the period.

Now it may be they are massively over leveraged - most PE backed firms are, but if you wanted to buy it then either you need a lot of capital and patience for that to come back to you OR you need to borrow and service the debt. If you had a lot of capital then you could pick to invest that anywhere you want - would a marina be the obvious choice?

 

[ylop]

I was thinking more regarding the fairly recent decline in boating.

I’m not sure I recognise that decline in boating. Where have the boats gone?

Perhaps making marinas more likely to chase our business rather
than having waiting lists.

i think generally boaters are too lazy to switch so marinas don’t need to do any better than mediocre to retain them!

In terms of pricing relating to distance our to sea - I have also noticed that motoring for an extra 30 minutes at the start and end don’t necessarily translate to price savings - but given how little some boats go out the marina perhaps we shouldn’t be surprised if proximity to home, or good parking, or other “features” are what sell a caravan park?

 

[Caladh]

We’re looking at alternatives next year. I got online quotes from my existing company and others via on line portals. With the current company I’d filled in the form indicating I was an existing berth holder indicating home marina. I had quotes back and the a phone call - could they help with anything? Other than price, I said no so on we went with questions “so where are you currently berthed ?” I said that if you can’t come to an existing client with the information I’ve already provided blah blah blah. The chap said, he was sorry but we operate two different systems blah blah blah……Gets my goat The other company came back and was equally unhelpful or clueless. I had an email following up an online quote in a similar vain and responded, asking for their company’s “berth holder benefits”, with a response of a couple of lines about how nicely situated their marinas were. Both these companies are so centralised that a personal approach to them eg.by phone is pretty impossible and when you do actually speak to someone they don’t seem to understand boaters actual needs and requirements. Doh….

 

[lustyd]

Now it may be they are massively over leveraged - most PE backed firms are, but if you wanted to buy it then either you need a lot of capital and patience for that to come back to you OR you need to borrow and service the debt. If you had a lot of capital then you could pick to invest that anywhere you want - would a marina be the obvious choice?

Exactly the issue I was talking about, some MBA muppet has drained the resources a viable business until it isn't viable any more. The sad thing is they think they’re being clever.
I imagine actually the previous loss was accounting chicanery though, it’s impossible to tell, and cash is the absolute worst indicator in a well run organisation.

 

[lustyd]

“berth holder benefits”

Like the “fuel at cost” that presumably they buy from the service station down the road given ot always ends up the same price.

 

[ylop]

Exactly the issue I was talking about, some MBA muppet has drained the resources a viable business until it isn't viable any more. The sad thing is they think they’re being clever.

I refer you back to post 11! I'm not a big fan of MBA's but I'm not sure you need an MBA to be greedy!

I imagine actually the previous loss was accounting chicanery though, it’s impossible to tell, and cash is the absolute worst indicator in a well run organisation.

I refer you back to post 14! I think Arisaig Marina (not really a Marina) is still for sale if you fancy investing in a lifestyle business. Croabh has been bought by a family, I suspect it will do well just as Kerrera was bought by individuals and seems to be thriving - but that's through hard graft and not insignificant risk taking. If you have the capital there are probably lower risk, and certainly easier ways to make a return.

 

[Snowgoose-1]

We are all mad !
The marina berth is my biggest annual cost.

More than my home gas and electric bills combined. More than annual Council Tax. More than my annual food cost.

 

[wonkywinch]

The reality is, a simple plain vanilla marina cannot generate a viable ROI in today’s market. Solutions on a postcard please.

Revealed: Hamble Marina set to be transformed by leisure hub and new homes

MDL been banging on Eastleigh Council planning door for many years allegedly ruffling many feathers along the way.

MDL did set up a website to share info with locals etc but that's been shut down now.

http://www.mdlmercuryforward.co.uk/

 

[lustyd]

I refer you back to post 11! I'm not a big fan of MBA's but I'm not sure you need an MBA to be greedy!

No, the MBA makes them think they’re clever. Greed I can live with, idiots less so

I refer you back to post 14! I think Arisaig Marina (not really a Marina) is still for sale if you fancy investing in a lifestyle business. Croabh has been bought by a family, I suspect it will do well just as Kerrera was bought by individuals and seems to be thriving - but that's through hard graft and not insignificant risk taking. If you have the capital there are probably lower risk, and certainly easier ways to make a return.

Kerrera is an excellent example of a well run marina that seems to be in it because they want their community to thrive. Hopefully they won’t sell out!

 

[Lucky Duck]

Boatfolk seemed to be doing very well from what I can see in all of the ones we visited.

They offered competition when we chose to leave Premier and Boatfolk were different. Much better service and terms even though the price was within a few quid. Boatfolk als had better staff who were interested in their work. Premier staff prefer their phone to boats from what I can see.

At Haslar the berthing masters seem to delight in placing similar boats together like a form of matchmaking, although he denies it if you ask

I called the marina office this afternoon as the neighbour’s bow line was on its last few threads and was threatening to give way. The owner couldn’t make it down until tomorrow and I didn’t feel entirely comfortable reorganising thier lines.

A member of staff duly arrived and seemed to struggle to understanding what the issue was and then said they had no spare lines that could be temporarily used and wandered off so I end up having to repurpose one of the springs as a bow line….

 

[SaltyC]

I called the marina office this afternoon as the neighbour’s bow line was on its last few threads and was threatening to give way. The owner couldn’t make it down until tomorrow and I didn’t feel entirely comfortable reorganising thier lines.

A member of staff duly arrived and seemed to struggle to understanding what the issue was and then said they had no spare lines that could be temporarily used and wandered off so I end up having to repurpose one of the springs as a bow line….

Unfortunately, our marina are happy to call you and tell you there is a problem. However, they will not do anything since they would then 'be responsible'! It is left to other Berth holders, to take reasonable steps - end for end a frayed line to restore the original?

 

[Lucky Duck]

Unfortunately, our marina are happy to call you and tell you there is a problem. However, they will not do anything since they would then 'be responsible'! It is left to other Berth holders, to take reasonable steps - end for end a frayed line to restore the original?

Unfortunately the boat was moored with two long lines acting as bow/stern warps as well as the springs rather than ‘one rope one job’ thus my initial reluctance to interfere

 

[SaltyC]

Unfortunately the boat was moored with two long lines acting as bow/stern warps as well as the springs rather than ‘one rope one job’ thus my initial reluctance to interfere

Does make it problematical. I have broken the rule with 2 bow lines, but each can be independently altered. One can only carry so many warps.
My other confusion is those who tie the pontoon to the boat rather than the boat to the pontoon.

 

[lustyd]

Unfortunately the boat was moored with two long lines acting as bow/stern warps as well as the springs rather than ‘one rope one job’ thus my initial reluctance to interfere

Did it have the extra bonus point for entirely loose around the cleat in the middle of the two? I’m seeing this more and more often it seems a trend for some reason to just wrap the cleat rather than tie, so the boat is very free to move about.