Fairline Gone Pop

[ari]

You should have a search for where the hulls / decks are moulded for these 'mass produced' smaller boats ..... then you see how they can price them.

Doesn't really matter. What matters is what potential customers feel they want to spend their money on when looking at boat shows or online, what it costs, and whether or not the reduced costs persuade them to buy the cheaper boat. If they do, then you've got a problem.

 

[Portofino]

To save regurgitation insert Fairline where I wrote S/skr here Correlation between boatbuilding and politicians

Then factor in a far greater % of home buyers and Fairlines knackered. . It’s pipe line , deposits dried up .There not enough cash flow to continue.

[ of course the first blurt out by the receiver is gonna say “ 250 jobs still here “ as he’s trying to up sell the residual value to achieve the best % ]

Add in the contacting leisure boat mkt esp as the entry level buy in is now , the” bar “ set high ….not much under£ 0.75 M .
When a mkt contracts the weakest, the minnows go first .


Add in the Italian builders , the epicentre of leisure ( med based ) boat building and the med is biggest mkt for over £1M boats - have critical mass ,repetitional marketing + economy of scale etc l eg Itama doing 20-30 units with the warm blanket of the FG envelope = Fairline can’t continue as a stand alone .
There’s no group to dissolve the R+D costs in .

The modals have never had a USP . Eg Riva , Pershing, Itama , Wally . Fairline s space is very congested and to be fair they haven’t any usps . They look very ordinary and dare I say it passé at Med boat shows .

Take the FL GT 62 launched a decade or ago ? It barely reached 31 knots , the eq FG group 62 ( ish ) like the Riva and the Itama 62 …reached ( personally witnessed ) 43.5 knots at WOT . So a dead in the water springs to mind !

Those historic loyal U.K. FL buyers have migrated away .
The sales arn’t just there to give any backer any confidence on the rtn of capitol.

It’s a bit like manufacturing B+W tv s in Oundle , when the Italians are way ahead with colour tv.

Re pulling the plug ^ other posts .
I suspect the various sellers financiers are not the same as the various buyers and debts have been settled by the sellers or losses cut when they passed the toxic parcel on .

It’s the new ( lost count now ) owners backer that’s pulled the plug based on what I said in the link above .
They weren’t to know exactly how U.K. govt budget would play out when took the latest punt on FL …..so fair play to them for taking the risk .

Hate to say it but you need folks with “ broad shoulders “to create jobs ( aka absorb seed £££ + risk ) for the “ average workers “ .
U.K. boat building recently has been on fine knife edge it’s just tilted .

 

[47GC]

Was just thinking

It's very rarely an option as Fairline is unlikely to be in a position to complete them and would you give them more money in the hope they complete your part finished boat. Then there is the problem assuming they can find another company that will be able to complete your half finished boat and that is getting it off the administrator / receiver who usually considers it the property of the company.

The bank put them into administration. They offered factoring to fairline, and will most likely offer factoring to the administrators. Until a new buyer comes along and they get paid back.

 

[Bouba]

To save regurgitation insert Fairline where I wrote S/skr here Correlation between boatbuilding and politicians

Then factor in a far greater % of home buyers and Fairlines knackered. . It’s pipe line , deposits dried up .There not enough cash flow to continue.

[ of course the first blurt out by the receiver is gonna say “ 250 jobs still here “ as he’s trying to up sell the residual value to achieve the best % ]

Add in the contacting leisure boat mkt esp as the entry level buy in is now , the” bar “ set high ….not much under£ 0.75 M .
When a mkt contracts the weakest, the minnows go first .


Add in the Italian builders , the epicentre of leisure ( med based ) boat building and the med is biggest mkt for over £1M boats - have critical mass ,repetitional marketing + economy of scale etc l eg Itama doing 20-30 units with the warm blanket of the FG envelope = Fairline can’t continue as a stand alone .
There’s no group to dissolve the R+D costs in .

The modals have never had a USP . Eg Riva , Pershing, Itama , Wally . Fairline s space is very congested and to be fair they haven’t any usps . They look very ordinary and dare I say it passé at Med boat shows .

Take the FL GT 62 launched a decade or ago ? It barely reached 31 knots , the eq FG group 62 ( ish ) like the Riva and the Itama 62 …reached ( personally witnessed ) 43.5 knots at WOT . So a dead in the water springs to mind !

Those historic loyal U.K. FL buyers have migrated away .
The sales arn’t just there to give any backer any confidence on the rtn of capitol.

It’s a bit like manufacturing B+W tv s in Oundle , when the Italians are way ahead with colour tv.

Re pulling the plug ^ other posts .
I suspect the various sellers financiers are not the same as the various buyers and debts have been settled by the sellers or losses cut when they passed the toxic parcel on .

It’s the new ( lost count now ) owners backer that’s pulled the plug based on what I said in the link above .
They weren’t to know exactly how U.K. govt budget would play out when took the latest punt on FL …..so fair play to them for taking the risk .

Hate to say it but you need folks with “ broad shoulders “to create jobs ( aka absorb seed £££ + risk ) for the “ average workers “ .
U.K. boat building recently has been on fine knife edge it’s just tilted .

So, even the molds have no value?

 

[Portofino]

So, even the molds have no value?

There true value will be what they achieve at a dispersal sale .

Intellectually zero as with competitors it’s not a good look imho the next “ new modal “ is based on a defunct FL .

 

[Seastoke]

So, even the molds have no value?

Mold is difficult to get a boat.

 

[Fire99]

I think with all premium products (boats being included) profit margins increase as the size increases. We live in a labour cost / site cost focussed environment. Even car manufacturers find it difficult to make a profit on a small, simple car.

To be honest, with little care our government has for manufacturing in the UK, and consequentially, costs being so high, If I were Fairline / Sunseeker, Princess etc, I'd be tempted to push manufacturing of smaller models abroad. A genuine competitor for the larger Axopar / Saxdor etc models, with a Princess/ Fairline / Sunseeker brand, could work. As things stand, there is no real hope for 'production level' boat manufacturing in the UK...

 

[Snowgoose-1]

I think with all premium products (boats being included) profit margins increase as the size increases. We live in a labour cost / site cost focussed environment. Even car manufacturers find it difficult to make a profit on a small, simple car.

To be honest, with little care our government has for manufacturing in the UK, and consequentially, costs being so high, If I were Fairline / Sunseeker, Princess etc, I'd be tempted to push manufacturing of smaller models abroad. A genuine competitor for the larger Axopar / Saxdor etc models, with a Princess/ Fairline / Sunseeker brand, could work. As things stand, there is no real hope for 'production level' boat manufacturing in the UK...

Tend to agree. I don't now if any folks here watch the TV program "Made in Britain" . We seem to do rather well in niche products with regard to exports.

How about this though. (Article Published May 2024)
The UK has become the world’s fourth largest exporter, but can it maintain this momentum?.

 

[Hooligan]

Because there was zero prospect of getting their money back!

My guess is as just said the last buyer paid £1. The current debt holder effectively just converted their debt to equity. I suspect that without financial leverage the cash flows look better hence they keep the employees ie cash flow based on current order book looks positive or break even before financial debt. So the debt holder who is now equity will get a return based upon what any new buyer is willing to pay for a debt free business. The only real issue is working capital and so quite possible that the old debt (now equity) is funding this. There seems to be demand for “brands” and “impulse” buys. So I would be shocked if this is the end of the story.

 

[Grubble]

The names and the design studios might live on, but the UK is a location with ever-increasing costs (energy, labour, taxes) to do manufacturing, and the same skills are available elsewhere for less.

The car industry has the same problem: Rolls Royce and Bentley will remain, Aston Martin, probably/maybe.
Any volume manufacturer will look around, but without some sort of intervention, it could easily end up like the Australian car industry, which is now non-existent.

Do their French, Italian and German competitors not have the same problem of expensive labour, taxes and energy?

 

[oldgit]

A salesman at the last boat show said "It's difficult to get someone to move on from a Sealine SC35".
Errr, yes, because the boat that I might have paid £150k for ... the equivalent thing new is now well North of half a million quid which I do not have.

I will admit that "I can't afford a new 40ft motorboat" is a First World Problem and highly unlikely to succeed in crowdfunding.
But it used to be possible in smaller increments than it is today.

What they are left with is a much smaller target market that will be very demanding in terms of what they want for their much larger spend.
.

+100.
We were so far behind the curve ,often walk past a still gorgeous Princess 500 moored in a local marina, featuring with two lengths of chrome tubing and several bits of Teak to get you onto the flybridge .

 

[PowerYachtBlog]

Do their French, Italian and German competitors not have the same problem of expensive labour, taxes and energy?

Boat building wise the Italian and French/German are very different.

If we take the French as the Beneteau Group or Germans as Bavaria and Hanse Group, everything is very lean and made in-house with some little exceptions.

The Italians have a supply chain sub-contracting line. Meaning a lot of the things are made by third parties.
The exception to this are Cranchi and to a smaller extent Absolute and Azimut sub 78 feet.

Abs and Az follow a similar model to the British Fr/Pr/Ss .

The Italians have an advantage IMO in the bigger sizes and or smaller production numbers, when third parties especially in the La Spezia to Pisa area.
It is very easy to make stuff for you and the choices are endless, also because it is a supply chain which has been build onward from the sixties and kept on expanding to what is today.

 

[SC35]

Do their French, Italian and German competitors not have the same problem of expensive labour, taxes and energy?

Boats or cars?
I don't know how the French get away with it, but somehow car plants there end up getting subsidised.

 

[ylop]

The administrator is responsible for doing the best for the business. They have kept the 250 workers on, presumably to continue building the boats in progress. This is in their interests as completed boats bring in cash. It is up to them to decide whether it is viable to continue given the resources available. It makes a sale easier perhaps if there is still activity.

Best for the business or best for the creditors?
I imagine that key criteria is that the income is actually covering the real costs of the business (excluding the debt).

Some one failed somewhat at their so called due diligence

Not necessarily - they may well have gone in with their eyes open as a calculated risk. Often the lender has secured their debt so doesn't really care.

First question is, what do administrators know about building boats.

They don't need to know anything about building boats, they need to know about selling failing businesses.

 

[Fire99]

They don't need to know anything about building boats, they need to know about selling failing businesses.

Exactly. Like 'em or loath 'em, administrators don't care if you're a paper clip manufacturer or bionic eye designer, it's all 'pounds, shillings and pence'.. The company is either viable (with changes) as an ongoing concern, or it's not, and they'll (allegedly) attempt to get the best return for those owed by the company. Entirely impersonal and indiscriminate to the type of business.

 

[ari]

+100.
We were so far behind the curve ,often walk past a still gorgeous Princess 500 moored in a local marina, featuring with two lengths of chrome tubing and several bits of Teak to get you onto the flybridge .

That's called a 'ladder'. It's what the vast majority of boats had to get to the flybridge over 30 years ago when the Princess 500 was launched, so not too sure what your point is?

 

[petem]

That's called a 'ladder'. It's what the vast majority of boats had to get to the flybridge over 30 years ago when the Princess 500 was launched, so not too sure what your point is?

His point I guess is that boats were simpler and more affordable. People bought them in decent numbers and the builders made a profit.

It's not a great example because people wouldn't accept flybridge ladders now.

But they might accept a 40ft sports cruiser laden with so much fancy woodwork, fold down sides, hi lo platforms, snazzy lighting that it retails for the thick end of £1m.

 

[oldgit]

That's called a 'ladder'. It's what the vast majority of boats had to get to the flybridge over 30 years ago when the Princess 500 was launched, so not too sure what your point is?

The point is Sealine were able to mould in a set of stairs without encroaching on interior space on some fairly small boats, when Prinline were still using ladders on some very high craft.

 

[ImpImp]

First question is, what do administrators know about building boats.

You seem to misunderstand an Administrator's role.

 

[ImpImp]

The problem with small boats - is the cost per foot is actually higher and not so easy to sell at price people will accept. There are boats of course from 'cheaper' manufacturing / labour cost areas - so that would be hard to compete with.

So many Boat Builders have migrated away from the smaller markets to make larger profits on fewer larger boats ........... but it a high risk path to take ... you can see many well known |Brand Names fell into the trap ...

+1

It's been said before but the sales effort needed to sell a £500k hull is not much different to a selling £5M hull. Smaller market obviously but one can see the financial attraction to move up the market.