Good time to be a British boat builder

What actually matters is the currency the buyer is paying in. All my posts refer to Euro buyers or Euro prices. Some of Sunseekers forward order book will have been sold in Euro, so they are already seeing the benefit on their bottom line with every stage payment made, unless they sell all of their boats in GBP, in which case it is the euro dealer who is benefitting.

I accept that boats sold in GBP will only benefit the builder indirectly in terms of less competition from boats built outside the UK (because they will be more expensive), and this will take longer to filter through.
 
Currency determines how FX flows to the builder's bottom line but not whether the sale is "export" or not. I dont know first hand but I'd expect sunseeker sell in GBP and if local dealers sell to customers in euros then the fx risk is laid off with a currency contract. (In which case the bank/FX counterparty is the winner!). When I've looked at buying ferretti in the past all dealers including the UK one have wanted to sell to me in euros
 
Yes, I meant what actually matters in financial terms, not what actually matters in defining whether its an export or not ..

As you say if all Sunseeker sales are in GBP, and the dealer takes or insures the currency risk, then the benefit to Sunseeker will be in being able to push through price increases, because the competition just got 15% more expensive.

However it pans out, I can only see it as a good thing for UK boat builders
 
I would be surprised if Sunseeker themselves accepted payment in any currency other than GBP. My company has been a dealer for a number of manufacturers in Europe and the US and I've only ever met one that would even consider payment in another currency other than their own. One of the reasons that manufacturers sell through dealers is to lay off the currency risk
I think Sunseeker sell partly through independent dealers and partly through wholly owned sales outlets although I may be wrong. Independent European dealers will of course benefit from the £/€ fall but my guess is that they probably would have forward ordered £ last year to pay for this year's stock so they may not benefit immediately. Any wholly owned sales outlets selling in € will obviously benefit Sunseeker themselves immediately
I don't think the current £/€ rate will allow Sunseeker to raise prices because a) they have to compete with other UK builders selling in £ and b) they are also selling into $ denominated markets in which the £ is still v expensive. In any case, in mty experience, manufacturers tend not to react to short term currency movements. They set a pricing strategy and tend to stick to it for a few months or a year. But, as you say, they will possibly benefit from increased sales against European competition
 
It hasnt been a good time to be a UK manufacturer of anything that can be imported for many years now, and a minor currency shift wont change that. Increasingly we dont have the infrastructure to support manufacturing and so many components will have to be imported with an effective cost increase. Inflation in the UK is nearer 10% in reality than the govt's 2% ( where do they get that idea from /forums/images/graemlins/laugh.gif) and UK labour is both expensive and low productivity. As the VP of General Motors once famously said, the UK is a great place to sell things, but a poor place to make them.

Note that the Sunseaker report talks of profitability improvement in a couple of years under private equity - ie the accounts have been wrung as dry as they can be short term. UK industry is generally more profitable in ROC terms than that on the continent - but is it more successful or less so? We all know the answer to that one.
 
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As the VP of General Motors once famously said, the UK is a great place to sell things, but a poor place to make them.


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In my particular industry, there are currently 3 major global competitors, 2 Italian and 1 German, and 16 minor competitors, variously Italian, German, French, Spanish, US and Brazilian. Not 1 single British manufacturer. Zilch
Yet, historically, the UK has always been in the top 6 largest markets in my industry
I agree with you. The biggest single difference I see between UK companies and foreign ones is short termism. UK companies seem to be run quarter by quarter with managers having to meet arbritrary financial targets which result in low investment and bad decisions. There are very few UK companies with a clear idea of where they are going in the long term
 
Yup Deleted User, but with the exception (in general) I'd suggest of privately owned and private equity owned companies. They absolutely do not have quarterly earnings targets or suchlike and can be run to a 3 year business plan or whatever.

I don't agree wottayottie's comment on accounts "wrung dry". Private equity investors don't give a damn what the accounts say. They (sensibly) run businesses for long term cash generation, not accounts profits which are distorted beyond recognition by stupid entries for non cash items like goodwill, equity remuneration, etc
 
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