Fairline cutting staff

I think the boats have something to do with it. For sure there are less city bods splashing their bonuses on sexy new boats, but on the other hand there are lots of new buyers in Asia, Eastern Europe, Russia, etc. and with the weak pound Fairline should be fighting them back with a stick. I agree with Hurricane some of the lineup is a bit dated, the larger Squadrons by all accounts have not stormed the market, and I also think some of the hardtop boats just look a bit awkward, when placed alongside Princess V boats, Sunseekers and many Italian brands. Add to that the Fairline price premium, and I think they're just a bit less attractive to foreign buyers.
 
Maybe me, but somehow the Squadron 55 doesn't look like a Squaddie to me. Looks kinda eurobland; could be a bigger Phantom or an Azimut.

I think the Squaddie 58 was maybe their highpoint, like the E39 5 Series for BMW.

Only difference being that BMW have kicked on, with the Chris Bangle E60 being even better.
 
2 years after the MBO and if, as I understand it, 3i's are involved, then Fairline will have a tough financial regime. My experience of 3i was a great company but they want preferred shares, i.e. they get paid first including regular dividends.
They are also very quick at putting the boot in if they find they don't fancy the business after all.
I hope it doesn't come to that but as others have commented for the redundancies to come immediately after SBS is not encouraging.

Fairine investment from 3i
 
In a similar (but different) vein, I heard today that "The Warren" near abersoch now has 50 vacant lots. For those that don't know The Warren, its a holiday home (caravan park) for those better off folks. A chalet (wood hut) will set you back £250,000. The ground rent is about £10k pa. There has traditionally been a waiting list of years and you only ever to hear of a possible place if your cash talked louder than someone else's.

Such is the leisure industry right now.
 
The company and in the event of an insolvency the creditors.

The method is called preferred shares which 3i used to call preferred preferential shares.

They could take out each month fixed dividends to cover financing costs and expect the company business plan to be able to support that cost.

3i is the 'kiss of death' to some people. Maybe they have changed but I had experience of this. It certainly changed my whole business outlook and I never ever went back to similar companies for finance.

Lets hope Fairline have a great deal with 3i.

If not then at some point it will be Sunseeker, Princess and Sealine left of the majors.
 
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They could take out each month fixed dividends to cover financing costs

[/ QUOTE ]Are you sure?
PE firms want their pound of flesh, and they're very good at covering their risk of not getting it, no doubt about it.
But what you're saying sounds pretty much against the law in my books, unless by "dividends" you actually mean interests repayments on loans.
 
http://articles.directorym.co.uk/Handling_Your_Stocks-a870324.html

explains the basis of preference shares. There are many other references and especially now with the US situation.
However it is perfectly possible for an investor to write their own terms, so it might be Preferred Preferential shares which pay a monthly dividend whether or not the company is actually making a profit. This is the fall back for venture companies in that they have a guaranteed revenue stream for their own investors.

The company receiving the investment can of course choose not to proceed with the investment but if they do tough conditions are attached with an exit strategy basically being outside the control of the company receiving the investment. I.e if the investor doesn't fancy the business for whatever reason he/she pulls the plug at the point, often early on, when they think they may get the best change of getting all their money back.
Brutal but true.
 
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However it is perfectly possible for an investor to write their own terms, so it might be Preferred Preferential shares which pay a monthly dividend whether or not the company is actually making a profit.

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Mmm... In the webpage you linked it's stated that preference shares have priority over common stock in the distribution of dividends and assets.
I'm fine with that, but it's quite different from what you're saying above.
I bow to the better experience of other forumites re.UK or US regulations, but I can tell you for sure that at least in Germany, Italy, Spain and France, if in the terms written by investors it is declared that they can take dividends out of the Company regardless of the Company results, well, I'm afraid that such investors simply could not go ahead with the investment, regardless of whether the Company would agree or not.
Thanks God.

PS: I agree on the other hand that the exit strategy is outside the Company control, but that's pretty much the same regardless of the type of investors, innit?
 
I'm with jfm on this one. Methinks he knows what he is talking about!! /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif
 
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and in the event of an insolvency the creditors

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Can't see how that can be the case, a company can only pay dividends from distributable reserves, and in the case of an insoolvent company, there wont be any?

I can quite see they can negotiate preferential dividends in a continuing company where there are such reserves, but that's no different to a bank negotiating a higher interest rate, or indeed 3i offering less for the shares, its simply one of the commercial terms of the deal on offer, which the company can either accept or reject.
 
Avaitor you are a bit mixed up. "The company" isn't a valid answer to my question. And preferred shares certianly do not rank ahead of creditors in an insolvency.

I do this stuff for a living and was an adviser on the 3i invesmtnet into Fairline. There are no preference shares that can inflict hardship in the way you describe. Indeed, hardly anyone uses preference shares these days if they know what they're doing. (Show me an MBO that does use prefernce shares and I'll show you a badly structured MBO!). The page you linked to describing shares is Janet and John stuff, not relevant to real deals

I'd have to write pages to explain fully but this is a normal MBO where 3i have preferred capital in the business (but not of a type that can inflict the hardship you suggest) and the common equity is owned by the management team and 3i. That's all public information. It would be completely wrong to conclude from the staff lay-offs that the business isn't going to be an outstnadingly good investment for 3i
 
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It would be completely wrong to conclude from the staff lay-offs that the business isn't going to be an outstnadingly good investment for 3i

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Could be the opposite in fact
Shows that the management have the balls to do something about a problem.
As long as they keep "slimming" the business stays trading.
 
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Could be the opposite in fact

[/ QUOTE ]True. But sad, if you come to think about it.
As jfm said, there are pages that could be written on this subject.
And actually most of it has already been written.

There's one point I can't help but underline, though.
The perception that laying off staff means that a company (I wouldn't say just its managers btw: separating managers from shareholders is purely academic, in any LBOs) has the balls to do something about a problem is as widespread a concept as it is just plain wrong.
There are only two things that we can safely assume in these cases:
1) the company has not been able to foresee the problem: avoiding to get fat is way better than being forced to get slimmer, in the first place;
2) now that the unforeseen problem arise, the company has not been able to find smarter ways to face it, than laying off staff.

Balls have nothing to see with the above.
If anything, it's arguably the lack of them.
 
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1) the company has not been able to foresee the problem: avoiding to get fat is way better than being forced to get slimmer, in the first place;

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Erm - other than I don't know which sector of staff are being laid off, in general it will take a certain number of ppl to do a job effectively ... as you get busier then you'll need more man hours to cover the increased workload, you'll need to shed these as the workload lightens again ...
Of course, they could just go the way of one job, one person .... but then that leads to unanswered queries, jobs left 1/2 finished and in general, unhappy customers .....
 
Its quite simple..... The likes of Fairline and Princess build their boats to stock... They have very little variation in their product and no real customer focused input.... Sunseeker on the other hand are totaly customer focused, no boat is the same, the range and style varies so much that no boat inside looks the same... They also carry such a high level of quality with standards that are far higher than the rest of the competion and this is what the buyer wants... Did you see the 92 Pred @ SIBS, I also hear that they want to produce a 130 Pred which will be a show stopper no doubt... Lets just hope this isnt the end of the UK boat industry..Maye the others can learn from the Leaders in this industry....
 
Is that true? At the 70foot ish level upwards, the sunseeker and Fairline/Princess level of customisation is the same. All three builders will, these days, make lots of mods including not just material finishes but cabin layouts and suchlike. Check out the 3 cabin Sq78 on Fairline's website with the oak interior- finishing materials like the white headlining all selected by owner; customised elimination of 4th cabin and converting it to owner's study area open plan to master bedroom. Sunseeker would do that too of course.

At the smaller level, 40-50 feet, you are right that Fairline/Prin wont customise. But do Sunseeker, at this level? I dunno.

Qualitywise there is no material difference. It's just not correct to say Sunseeker's quality standards are "far higher". Their engine rooms are top of the class. Their general fit out is same as Fairline/Princess. Their joinery is worse. All, and i mean all, their joints and mitres, including things like the mitres at top corners of door archtraves, are finished in a fine bead of silicone sealant, for example. And they have dropped some big clangers joinery-wise, like hull #1 of the 34m which has an atrocious fit out

Not saying there is anything wrong with s/s, just that they are not "far higher" than competition
 
IMO looking @ the various boats @ SIBS the build quality of the Princess range wasn't anything to write home about... The quality of the Lacquer wasn't "top quality", the fiddles weren't the best fit in the world... I felt that the Saloon layout didn't appear spacious, infact very clutered.. the colours and fabrics represented those of a holdiay caravan in North Wales... You talk about the "fine bead", and yes I agree they do have room for improvement, but, on the stands @ SIBS where the public are up and close to boats their attention to detail was appalling... Where they had deck to hulled the boat the stainless strip was badly fitted, the air box was on the aft wings were very scrappy...all the skin fittings were shabby stainless would be much nicer than brass above the water line.. and have you had a look at the quaity of there external finish..The hulls were showing signs of pre release and not looking their best..This could possibly be sorted out with a bit of buffing..

So what was the score with the 34mtr... What happened there?
 
jfm

I think its more complicated than that.
Yes, the smaller boats from Fairline/Princess are not customised but it seems to me that its actually down to supply and demand.
For instance all the most recently installed Princess production lines are geared up to produce quantity - and in doing so limit the amount of customisation that can be done.
It isnt as simple as the bigger the boat the more it is customiseable but generally it happens that way.

My experience is with Princess - I think that our 67 is the largest they do on a production (just in time) line and consequently, there was very little that we could customise in the factory. I believe that the bigger 21m and 23m boats are not built on the same basis and can have more customised specs.

It seems to me that the JIT production line concept has been very succesfull at Princess and I would think that the 21/23 will be replaced with a JIT line boat in the future.

So, to summ up, I believe that its the manufacturing techniques that dictate the customisation - not just the size and price that you are paying. A JIT production line boat should be much cheaper to produce - for example look at the big jump in price between the 67 and the 23m.

Just my observation.

BTW Princess lean on the dealers to do the final post manufacture customisation - in the UK PMYS do an excellent job supporting a sale with a spec that suits the customer thus leaving the Princess factory to get on with the job of producing a consistant product.
 
"You talk about the "fine bead", and yes I agree they do have room for improvement, but, on the stands @ SIBS where the public are up and close to boats their attention to detail was appalling"

Do "they" and "their" refer to the same party? Sunseeker?

The 34m #1 was just awful. None of the joinery fitted. Or the grnaite. Very heavy use of silicone to try to make it work. Lots of wall panels had interfaces between flat panels and curves, but the tangent of the curve wasn't parallel to the flat panel where they met, so there was a kink. Repeated many times. Ugh! Perhaps it was a rush job - it was hull #1. I haven't been on/seen #2. The finish on the 37ms (I've been on the first 3) was much better.

Do you know the answer to my earlier question, ie do s/s customise 50 footers? Or do they only customise say £1.5m+ boats, say 70 footers upwards?

Ah, and while I'm having a s/s rant, /forums/images/graemlins/grin.gif, the new hattan 70 is a disaster. Someone drew the hull wrong, or something. 21knots with Man1360s WOT. Squad 70/Princess 21m do 30kts++ with identical engines. That's an engineering screw up, dontya think? you'll spend your whole life taking on fuel in the s/s /forums/images/graemlins/grin.gif
 
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