Discovery Again!

[Seven Spades]

We have been given the devastating news that our owner / shareholder will not be continuing his support of the Discovery Shipyard business. He announced that he will be withdrawing that support immediately and will not be providing further investment or funds. This is a crushing blow to everyone’s hopes and dreams for the future of the Discovery Shipyard – it appears that the business will not be able to continue without the support we were all depending on.
Just over two years ago, in 2019, a business plan was drawn up to provide investment, stability and continuity to a shipyard business which had suffered a near collapse in December of that year. Considerable sums of money had been invested in the shipyard in the past – and much of that investment had been either poorly manged or lost. Radical changes needed to be made. As a result of the many changes that were subsequently introduced the business progressed forward in the right direction. As confidence in the shipyard grew the world was suddenly and unexpectedly overrun by an extremely disruptive and unwanted viral pandemic. Despite such handicaps stalling progress, with our shareholder’s loyal support and government interventions, the business continued to operate successfully. With two new models in design, and numerous upgrades to our existing tooling, the shipyard visibly and physically developed - and much progress was achieved. Following an updated business plan, created in January 2021, near record sales were achieved for the period - including 5 (new model) yachts sold off plan.
An integral part of the 2021 business plan was directly linked to a specific and continued investment in the shipyard, notably in capital items. Despite receiving only half the planned injection of funds that were promised in January 2021, the business continued to operate well – but any sustainability was based on a clear understanding that additional supporting funds would be available from our owner / shareholder. Now that support has been suddenly and unexpectedly withdrawn there has been little time or opportunity to progress a new business plan or follow any new direction. Despite urgent consideration it is clear that unless alternative investment is found immediately and put in place the business will have insufficient liquidity to enable it to continue to satisfy all of its current obligations and liabilities.
It seems that the company will be forced to take the very difficult decision to appoint administrators / liquidators immediately in the hope that some better resolution can be found. This decision has come as a devastating blow to all concerned - notably clients, suppliers, shipyard contractors and employees - or anyone who has associations with the business - all of whom have shown great faith and loyalty by supporting the shipyard and its brands despite the many challenges we have all had to face during the past two years.
No official comment has yet been made and we await a statement.

Very sad for the employees particularly on payday.

I hope Richard Matthews fixes this yard. The news that Oyster has taken 16 deposits on the new Oyster 595 at £2.5m must have tipped the decision from the existing owners. Discovery are so far behind in terms of technology. It is very difficult for them to make up this ground without the help of someone who really knows how to fix the problem. Personally I prefer the deck saloon layout to the pseudo deck saloon of the Oysters, but their electronics and construction is more contempory.

 

[AngusMcDoon]

Is it just too expensive to run a small boatbuilding business in the UK now? Quite a few European manufacturers have moved production to Poland.

 

[John_Silver]

Very sad. Especially so with the Discovery 48 winning the Blue Water Cruiser of the Year award, so recently. Was speaking to the yard only a couple of weeks ago. The team were full of excitement about the first Southerly 42 coming out of the mould and the unveiling of a Southerly 330 (updated 32) in spring with a 380 (updated 38) following in the autumn. Let’s hope that the expertise and investment can be found to turn the situation around.

 

[Concerto]

The news in post #1 was reported here.
Discovery Shipyard Ltd on LinkedIn: We have been given the devastating news that our owner / shareholder | 13 comments
Discovery Shipyard loses investor - Marine Industry News

Discovery web site is still running as normal.

Hopefully purchasers have been notified before the news hit the web. Maybe there will be another investor prepared to back this British manufacturer.

 

[Hermit]

I hope so - my 14-year old son is supposed to be doing work experience there in July next year. Only a minor issue compared to the situation for the staff but he will be gutted if he can't go.

 

[Buck Turgidson]

Sad but I have to say their business plan appeared to be offer everything we can think of in the hope of some orders. Their website shows 11 models if you include the variants. Perhaps a little more focus may have reduced the strain on funding.
I do hope someone has the cash to see this as an opportunity worth taking.

 

[Bathdave]

Anybody picked any more news on what’s happening with Discovery?

after the news broke it all went very quiet, as far as I can see no administrators were called in, and I see their website is up and running again (and talking about exhibiting at Boot, though I think that might be off ? )

Perhaps they may have found an investor, or the existing one decided to put more money in after all?

 

[Concerto]

With the administrators in, they would be unlikely to change the web site whilst seeking a potential buyer. As the web site states going to BOOT, but BOOT was cancelled recently confirming the web site has not been updated.

The administrators would try to complete existing orders after shedding some of the workforce to reduce running costs and keep the business trading. When Westerly went bust in 1980, that is exactly what happened and surprisingly during administration remained profitable so was easy to find a buyer/investor. Just keeping my fingers crossed that happens with Discovery.

 

[Minerva]

The administrators would try to complete existing orders after shedding some of the workforce to reduce running costs and keep the business trading. When Westerly went bust in 1980, that is exactly what happened and surprisingly during administration remained profitable so was easy to find a buyer/investor. Just keeping my fingers crossed that happens with Discovery.

So cutting every corner they can get away with to build the boats as cheaply as they can to look profitable to potential investors - you'd hate to be the poor sod who's dream boat was currently in build!

 

[Concerto]

So cutting every corner they can get away with to build the boats as cheaply as they can to look profitable to potential investors - you'd hate to be the poor sod who's dream boat was currently in build!

During administration, the administrator will always reduce costs where ever they can. The easiest and quickest is alway getting rid of a lot of staff, leaving a core of experience so the company can continue trading, compared to fixed costs like factory rent. Nowhere did I say building as cheaply as they can, this would be counter productive and an administrator is usually accountancy based, not product based, as this is outside their remit. If quality was dropped, then the customer who ordered a yacht would be unsatisfied and could state the company had breached the order contract and demand all their money back - causing even greater problems for the administrators finding funds and having a part completed yacht and the need to find a new buyerfor it. All monies from completed sales will be directed to paying off wages, tax bills, bank loans and supplier debts pretty much in that order

Perhaps reading a little about admistration will help.
Put your company into administration
What happens when a company goes into administration?
What duties does an administrator have to creditors in a formal insolvency procedure? | Begbies Traynor Group - The UK

 

[Frogmogman]

What a worry for the workforce .

Here’s hoping the administrators manage to sort things out satisfactorily.

 

[Bathdave]

What a worry for the workforce .

Here’s hoping the administrators manage to sort things out satisfactorily.

I said in an earlier post that as far as I can tell, administrators haven’t been called in, which does suggest that someone has bailed them out

the point of reactivating the thread was to see if anyone had anymore info ..it seems not ?

 

[Concerto]

Re reading the article in Marine Industry News, it seems that Discovery lost their investor, not any mention of administrators. There was an assumption that Discovery could not continue without the investor. It appears that maybe they can continue with strict management controls to ensure boats are continued to be completed and customers are happy with the product. They certainly have a pretty full order book. My advice would be to concentrait on just a few models rather than offering so many models.

Discovery Shipyard loses investor - Marine Industry News

 

[Enroute]

The Discovery 58 custom is a fantastic yacht, the build quality for me is second to non, it’s a perfect size for exploring the world. Few years ago my wife and I toured the manufacturing to see the build. I am a professional engineer owning my own engineering business. If the time was right for us we would place a order for a 58. You would expect the profit margin to be 30% on these yachts, the build time, component costs, overhead is all known. So if the company does have a good order book why is it in administration. I was told any deposit paid would be separate from company overheads allocated to equipment and build costs in a timely manner. At anytime I could see the build an expenditure through the process.
I can only conclude unfortunate time’s management decisions probably due to expansion and a down turn in orders due to the pandemic. In my business I have seen order cancellations mainly due to the desire to see what happens next with Covid. We buy these yachts to sail the world if that’s restricted then those plans go on hold. My best wishes go to all the people involved in Discovery yachts. I hope the administration can give you the time to help you through this difficult period to find a investor/new owner to sort this out with a firm hand on the helm and a good accountant at his side, that will take 6 months! Good Luck ?

 

[Tranona]

Welcome to the forum - and this debate.

The current (or perhaps more correctly recent) Discovery company is not the same as the one that built the 58, and the other Ron Holland designed derivatives of the original 55. It has 2 changes of ownership and now builds a different range of boats derived from the old Southerly designs.

 

[Boo2]

So cutting every corner they can get away with to build the boats as cheaply as they can...

A business not busy doing that is busy going bust so one has to hope that is on the list, if not already a fact...

Boo2

 

[Parabolica]

Indeed it is a sad state of affairs at Discovery. We were owed money by them at the time of their demise, fortunately not so much having had all our largest invoices paid last year but we are having quite a job recovering what it was we supplied from the administrators as it appears there is a plan in place for a resurection, but one that of course doesn't satisfy the existing creditors.

The Discovery team on the face of it were doing all the right things and from their media it certainly appeared that everything was rosy and upbeat but the reality all to clear to see now, is that a few people at the top knew exactly what state they were in. I have it on good authority that they were taking stage payments for yachts in build well beyond what should have been possible to request from clients for the work that had been carried out and with their investment in new product inevitably haven't cost their cashflow too, they were clearly trading whilst knowingly insolvent for some time. Much is owed and none will be paid back i’m sure. I suspect a pheonix will come in the form of clients coming together to get their part built yachts through to completion, somehow, but whether this means the brand will survive or not is another thing. Lets hope it does and not in Poland but only if it can be viable.

Re Oyster. Yes Richard Mathews made a personal success of that company but it has since had quite a chequered history, especially when it was being run by the fool that was the CEO at the time the 118‘ brought them down. That man is pure and simple a nasty little man with no idea how to run a company or do the right thing by others hence why he broke Oyster and likely why he didn’t last long at Fairline either. Hopefully the company's’ latest resurrection will see them more succesful this time and with some longevity too as they do I believe, strive now, to make a decent product.

 

[Concerto]

Discovery is reborn as Ocean Shipyard Ltd. It will build Southerly 42 and 48's, and Bluewater 50 cats as they have bought the rights. The old general manager is the new general manager. Oh and the investor who pulled out, is the new owner.

UK shipyard opens in Discovery Shipyard's former premises - Marine Industry News

 

[awol]

And just to cheer you up - David Tydeman was appointed CEO of Fergusons, the Clyde Shipyard that is having a little difficulty building a couple of ferries in December '21. You just can't make this stuff up!

 

[Seven Spades]

So it looks like the Discovery Brand is finally dead.