Fairline Boats purchased

[petem]

Fair comments Henry. But dealers do have an interest in these boats, as the T53 is dog food they'll need to eat. With regard to unpaid suppliers, in my opinion the new owners paid a considerable price for the assets (£4.5m), it's not like they paid 50p for them.

 

[Deleted User YDKXO]

I am disappointed because seeing the situation they are starting from, I expected a new input, which as I see there is not..

To be fair, PYB, they have to walk before they can run and that means competing in the market with existing models before introducing new ones. Also don't forget that they have a dealer network which has to sell products now to stay in business too. But I agree with you. It was supposedly Einstein who said that it was the definition of insanity to do the same things over and over again and expect different results so in the long run they have to develop different models which don't compete head on with their bigger rivals

Interesting to hear what you say about Absolute and their sales of their Navetta range. As I've said before, I really do think that there are buyers out there who want something different from the same old gin palace planing boat designs that the likes of PrinFairSeeker are producing

 

[crazy4557]

This was part of the reason for my question. As a supplier it is one thing not to be paid for goods you have supplied when a customer goes into administration but it feels like a real kick in the teeth when a phoenix company rises out of the ashes and sells on those goods which they have effectively paid no money for

I am delighted that Fairline are up and running again but it would be a gesture of good faith on their part if they found a way of part compensating those suppliers who lost out.

Me being one of the creditors and it's galling to hear Pete returning from his factory visit carrying one of 'my goodie bags' that were never paid for. Small fry in the scheme of things and only a few grand so not disastrous but leaves a bad taste for sure.
If they use any of these goods in the new business for financial gain or marketing purposes the suppliers should be paid at least a fair proportion of the original cost.

 

[henryf]

Fair comments Henry. But dealers do have an interest in these boats, as the T53 is dog food they'll need to eat. With regard to unpaid suppliers, in my opinion the new owners paid a considerable price for the assets (£4.5m), it's not like they paid 50p for them.

I wonder if, when you consider the unfinished boats and other assets £4.5m might be seen as something of a bargain.

Dog food is an interesting analogy

Ultimately yes, the machine has to march on. I just wouldn't waste my energy developing something ultimately flawed, I would concentrate on creating a genuine class contender as soon as possible. Mid term that benefits everyone. As it is everyone just thinks "here we go again".

Whereas I was genuinely interested in the 53 I have now written Fairline off as a contender. The only thing I personally would consider is an offensively cheap deal on a Squadron 65.

Do whatever deals you can on existing models without wasting a penny developing them, put all your energy into creating the future.

Henry

 

[henryf]

Me being one of the creditors and it's galling to hear Pete returning from his factory visit carrying one of 'my goodie bags' that were never paid for. Small fry in the scheme of things and only a few grand so not disastrous but leaves a bad taste for sure.
If they use any of these goods in the new business for financial gain or marketing purposes the suppliers should be paid at least a fair proportion of the original cost.

It would certainly send out a clear message that the new owners were well funded and honourable people with a social conscience.

Henry

 

[petem]

I wonder if, when you consider the unfinished boats and other assets £4.5m might be seen as something of a bargain.

Dog food is an interesring analogy

Wel I don't think there was a long queue of potential buyers.

DEFINITION of 'Eat Your Own Dog Food' A colloquialism that describes a company using its own products or services for its internal operations. The term is believed to have originated with Microsoft in the 1980s.

Note, no negative implication!

 

[DougH]

It would certainly send out a clear message that the new owners were well funded and honourable people with a social conscience.

Henry

Why? It's not their debt, it belongs to another Company.

I've never understood this 'social conscience' when it comes to money. They have bought some assets and rights from the receivers of a bankrupt company but not the debts.

If we are to have a 'social conscience' surely we should all volunteer to pay more taxes.

 

[Jegs]

Why? It's not their debt, it belongs to another Company.

I've never understood this 'social conscience' when it comes to money. They have bought some assets and rights from the receivers of a bankrupt company but not the debts.

If we are to have a 'social conscience' surely we should all volunteer to pay more taxes.

I would wonder whether goods that had been supplied but not paid for are the 'property' of the receivers to sell? Surely title does not pass until the stuff is paid for?

ATB,


John G

 

[DougH]

I would wonder whether goods that had been supplied but not paid for are the 'property' of the receivers to sell? Surely title does not pass until the stuff is paid for?

ATB,


John G

Alas no, unless you can prove Retention of Title which even if stated on an invoice can be contested by receivers quoting Terms & Conditions of Sale or Purchase.

Generally when a company goes under all goods in their possession become part of the general assets which the receiver 'sells' to recover funds to pay a dividend to the creditors.

Of course the creditors who get paid first are the Banks, HMRC and those with any preferential charges over the assets.

It's rare that the smaller creditors get paid anything.

The really big kick in the teeth is when a company supplies goods to a customer and also buys from them. You end up loosing the money owed to you and have to pay the receiver for the goods from the bankrupt company. No you cannot offset one against the other.

It never fails to amaze me how small companies continue to supply a customer who has overdue amounts payable.

 

[jfm]

Me being one of the creditors and it's galling to hear Pete returning from his factory visit carrying one of 'my goodie bags' that were never paid for. Small fry in the scheme of things and only a few grand so not disastrous but leaves a bad taste for sure.
If they use any of these goods in the new business for financial gain or marketing purposes the suppliers should be paid at least a fair proportion of the original cost.

Pete, thanks for the updates and info. Got any pictures? Do you know whether the high tech furniture line (the automated wood lacquer gear) installed in Corby during Alistair Schofield's tenure) is being moved to Oundle/Nene Valley?

Ref the above quote, if I may call a spade a spade, that is business nonsense. Crazy, you sold your bags to someone completely different, who didn't pay you, and that's bad luck of course. You have my sympathy: I'm a business equity owner too and it's happened to me. It's part and parcel of being in business on your own account rather than being an employee. But to suggest that a debt owed to you by A should be paid by B is muddled thinking in the extreme with a strong flavour of "please can someone else wipe my bottom". The bad taste is entirely of your own invention and any criticism of the new Fairline for not paying you is illogical and most unfair.

I wish Russell, Karl, Andy, Martyn and the wider team, plus the shareholders, much luck in this new venture. They need a new formula of course: Henryf you go on and on about the shortcomings in their current model line up compared with Princess, and I agree with you that those shortcomings exist, but fixing them is absolutely not the solution as you seem to think. The evidence for that is that Princess make old Fairline look like amateurs when it comes to losing money. Princess have at last replaced their CEO and I hope they have a new business plan because their current one is broken badly and there is surely no more money in their shareholder's pockets. Watch that space. New Fairline needs some sharper new designs of course, but they also need an all new leaner production and overhead model, the very opposite of Princess. If they need inspiration, a visit to Azimut would be more useful than a trip to Plymouth

 

[BartW]

I would wonder whether goods that had been supplied but not paid for are the 'property' of the receivers to sell? Surely title does not pass until the stuff is paid for?

ATB,


John G

this is all strictly regulated J, (at least in Belgium, but I don't believe its any different in UK)
in such a case, the administrators provide a period that suppliers can claim back the goods they have delivered, and not have been paid for, (when the suppliers sales conditions allow them to do so), In Belgium this is called 'right of ownership". Ofcause this doesn't make much sense for custom made parts.
From then on all the remaining "assets" can be sold by the administrators, and from then on the creditors can get a proof or certificate from the administrator for a unpaid invoice, for their accounts.

as has been said, the new owners can't be blamed for buying the whole lot at a silly price, and use or sell the stuff again,
it is indeed sad for the creditors, but this is something that happens daily

the idea of "socialising" with the creditors is legally impossible, and it would be chaos to decide, or to know who suffered the most,
sometimes a few grand hurts more for a one man co, than big sums for a bigger co.

as has been said, best thing to do for the creditors is looking forward, see how they can start up again their business with the new owners,
and
adjust their credit controll system, there are many solutions to avoid business threatening customer credit situations
imo
it is a suppliers right to insist for a payment of the services and goods they deliver (as long there are no complaits ofcaurse)
and act according some strict rules in that respect,
even more if the customer is a big and well respected factory !

 

[BartW]

It never fails to amaze me how small companies continue to supply a customer who has overdue amounts payable.

+1

I'm pleased to say that we have a good credit controll system in my company and not over agressive towards a regular / important customer

 

[petem]

Pictures would have been worthless as it's literally a building site. There is a fairly large space where all the CNC stuff is going, perhaps that's the stuff that you mean. I did ask if they were going backwards in terms of automation and was assured this is not the case.

 

[Portofino]

Pete ,
Thx for the update -can I just pick up this -----in post 265 you said

"They are confident that their fresh start with facilities, a workforce and systems geared to produce 100 boats a year will put them back into profit. Having no debt, "

Where are we with these numbers ? that's 2 boats a week ish ?
How may boats recently -have rolled off per year ie - past 3 y rs

I realise T/O is meaningless its Profit and the ability to service the loan /overdraft or expect the directors -come backers to sub it going fwds .
its just seems an ambitious figure 100 boats from one name stacked against some funky Italian competition , from Ferretti group and Azimut et al .

 

[wakeup]

EME, I'm happy to stand corrected over that point. As I've been at pains to say, I hope you guys get the money you deserve.

Hi Pete, thanks for the write up. As Deleted User says, quite an initial turnaround in a short period to be up and running building boats again.

Couple of comments:

The dealers have been loyal probably because there was no more capacity for more dealers within other brand's networks so I wouldn't see that as a massive vote of confidence more like Hobson's choice.

With regard to the supply chain, I wouldn't mind betting that they on on Pro-forma for everything they need to finish the boats. So the squeeze will come if they haven't planned out their working capital properly and soon.

However they are in a better position with little or no debt, short term lease and equity investment taking place than the WB bunch so it stands a chance of working.

I hope, once they have finished their WIP boats that they seriously rationalise their range and come out with one new boat this year to make their mark and lay down their brand position of the future.

 

[Baseplate]

.................Incidentally Russell Currie is a keen boater and was telling the guys and me how he got in trouble with his wife for selling a Sq58 that they had in stock and were using themselves.............

And that one-liner, for me, sums up the attitude of most SME Directors that I have met.

It does not give me a warm, fuzzy feeling about the future success of the marque.

 

[henryf]

The leanest, most efficient production line is of little use if no one wants to buy your products.

I have absolutely no idea how Princess boats are made and even less insight into the business side of things. I've never visited the factory. My focus and opinion is based purely on the design.

Common sense would suggest that if you start with no bad debt, no employee burden and assets acquired for pennies in the pound you are potentially in a pretty good place. The question then is what can you salvage to sell or produce.

I know I'm like a bad record on the 53 but as a former design student and having started my full time employment in the world of design I just can't see how lavishing time effort and money on it makes any sense. If your designs aren't up there with the very best of them then you purely sell on price. There comes a point when you just can't say no and you live with any compromises but that's not what I'm seeing with list prices. They are set to go head to head with some extremely strong competition. In fact compared to the likes of Prestige they are probably set higher?

As for suppliers who have been knocked, you are of course correct in that legally things move on with the new owners able to hold their heads high. They won on the day and put their money where their mouth was.

Re: volunteering to pay more tax. I don't aggressively seek to avoid paying it. If every business trading in the UK paid their dues in the same way I and others do we would be in a vastly better position. The year that happens come and see me for additional contributions if we need them.

Henry

 

[Deleted User YDKXO]

I've never understood this 'social conscience' when it comes to money. They have bought some assets and rights from the receivers of a bankrupt company but not the debts.

All legally correct but ethics do play a part in business and also, more importantly, the Fairline newco may wish to do business with these suppliers again in the future. I'm not suggesting that the newco is in a position to fully compensate suppliers who lost out to the previous company but the newco management might choose to do something like offering partial payment for items included on boats in build and for which they will get paid themselves or accepting marginally higher prices for future supplies

One thing is almost for sure and that is that the bigger suppliers won't have lost out. The likes of Volvo and Cat would almost certainly refuse to supply the newco unless they were paid in full for previous supplies. It is always the smaller guys who get shafted in a situation like this

 

[KevB]

Excuse my ignorance.. but Wessex bought fairline for a quid from better capital and better capital had £2million consideration which they called in and started the cards tumbling. FYL just paid £4.3million, that leaves someone with over £2million in the kitty to pay any outstanding debts surely?

 

[KevB]

And how come wessex could find someone prepared to pay £4.3mil but better capital could only manage £1? Stinks to me.