Oyster Yachts gone into administration

[JumbleDuck]

Sorry I wasn't clear, Practically speaking many Augusta members are very wealthy: Warren Buffet, Charlie Munger, Bill Gates, Jack Welch, etc. But by no means all, and the annual sub at this invitation-only club is far lower than many other US clubs. An unsaid rule there is, "if you need to ask, you shouldn't be here". Asking, or boasting about wealth is an absolute no no.

What the Irishman missed here was that the marginal utility of his entire fortune (£50m) was greater to him than the marginal utility of £200m to the American, which in his case represented a trifling amount. The Irishman's laughter stopped when he realised this.

Ah right, sorry. I misread it and thought the Yank's entire fortune was £200m. Reminds me of the Wodehouse story about the tycoons who play a golf match for two railroads against an Englisg butler.

Augusta is the club which has only very recently allowed black members, isn't it? As I recall, when Tiger Woods first won the US Masters there he wasn't eligible to join.

 

[dom]

Ah right, sorry. I misread it and thought the Yank's entire fortune was £200m. Reminds me of the Wodehouse story about the tycoons who play a golf match for two railroads against an Englisg butler.

Augusta is the club which has only very recently allowed black members, isn't it? As I recall, when Tiger Woods first won the US Masters there he wasn't eligible to join.

I think that battle was won by the wonderful Lee Elder in the mid-70s, but a media-shy club in the Southern US with a tiny membership; well it’s certainly fair to wonder. First black member was 1990. I think Woods was made honorary member back in 1997 when he won the Masters (not sure and certainly cld be wrong), but he did champion womens’ rights and Condoleezza Rice was the first woman member in 2012.

 

[Frogmogman]

It sounds to me like a version of the Kerry Packer story (quoted here from a book on Packer by Michael Stahl).

"The most celebrated story has Kerry Packer playing cards at a table in the Bellagio, which opened in 1998 as the flagship property of casino king Steve Wynn’s Mirage Resorts group. Mirage Resorts boss Bobby Baldwin confirmed the story to casino roundsman Norm Clarke in the Las Vegas Review-Journal in the days after Packer’s death. Packer was playing at one table and a loudmouthed Texan, playing at the next table, wanted to join in. He didn’t take too kindly to the Australian’s rejection. According to Baldwin: ‘The [Texan] said, “I’m a big player too. I’m worth $100 million”. Kerry said, “If you really want to gamble, I’ll flip you for it” … The Texan quietly went back to his game.’ In Texas parlance, they call that “all hat and no cattle”.

 

[rotrax]

Another little weath story-from Stewart Barnes Rugby book "Smelling of Roses IIRC.

On a tour, Chris Oti, the really fast guy, from a very wealthy background was rooming with a white guy from a more modest background. Amateur days.

Oti phoned all over the world using the room phone. His roomate went balistic-" You barsteward-you have run up 400 quid on the phone last night-are you crazy! "

Oh-sorry to cause you a worry old chap-is cash alright to settle it? "

400 quid was a lot of money when Oti and Barnes were playing..............................................

 

[Zing]

Sorry I wasn't clear, Practically speaking many Augusta members are very wealthy: Warren Buffet, Charlie Munger, Bill Gates, Jack Welch, etc. But by no means all, and the annual sub at this invitation-only club is far lower than many other US clubs. An unsaid rule there is, "if you need to ask, you shouldn't be here". Asking, or boasting about wealth is an absolute no no.

What the Irishman missed here was that the marginal utility of his entire fortune (£50m) was greater to him than the marginal utility of £200m to the American, which in his case represented a trifling amount. The Irishman's laughter stopped when he realised this.

In the context of the UK, it's not really for me to say. But I would have thought that Gladstone's era at the end of the nineteenth century saw a change in the nature of the struggle between the UK's so-called elite and its middle and working classes. As time went by the nature of wealth changed and some saw its direction towards investment and philanthropy as a more noble cause than driving an expensive carriage with a plume on the horse's head. And to first group, it can feel like a red line has been crossed when some fake-tanned jerk in a Boatshow asks visitors to identify themselves as rich or poor. I'm not sure old-Oyster got this delicate balance quite right.

The chip on your shoulder is so deep I think your head is close to falling off. At least that's the best explanation I can come up with for that nonsense. Maybe the green eyed monster is displacing his anger to some ill thought out rationalisation? There's more than a little bit of that going on in this thread.

Ah, I think I might guess why you got so muddled. The salesman probably asked you the usual, "do you have a boat now" or "what do you sail". It is so he can direct you to the 85' boat or the 49' boat. He is assuming you wouldn't be looking if you want just a dinghy or if you do then he will let you look around, just he will direct his valuable time to someone who will benefit from it. It's not a political issue or done to demean you for heaven's sake.

 

[Scolly]

If anyone is interested... The Hoveton facility is a hive of activity and not a golfer in sight !!!!

 

[SO40]

Depends a bit on the day to be fair and certainly after the ‘change in management’? Either way, wld be happy to post a pic of one of the other two car parks right now if i had one of those google number plate redacty gizzmos. Else, happy for you to check for yourself next time you’re passing if you fancy a beer! Oh, and nobody will even dream of looking you up and down like those oily old fake-tanned Oyster salesmen did

Hahahhaha, oily old faked tanned Oyster salesmen...... I wet my pants from laughing! Excellent!! +1

 

[SO40]

It appears the ex CEO of Oyster is still group emailing Oyster owners, to get across his side of things. He also sent the KPMG joint administators proposals, which includes the bid amount of Mr. Hadidi. Seems all rather odd since it was clear Mr. Hadidi was not going to reveal the amount. Also weird, as DT is no longer part of Oyster and the group has a new owner and is trying to start up. The email and attachments are hopefully the last convulsions of a bitter man.

 

[Poecheng]

It appears the ex CEO of Oyster is still group emailing Oyster owners, to get across his side of things. He also sent the KPMG joint administators proposals, which includes the bid amount of Mr. Hadidi. Seems all rather odd since it was clear Mr. Hadidi was not going to reveal the amount. Also weird, as DT is no longer part of Oyster and the group has a new owner and is trying to start up. The email and attachments are hopefully the last convulsions of a bitter man.

Interesting use of data

 

[lpdsn]

Interesting use of data

Might get even more interesting if some of those contacted complained.

 

[SO40]

And he is not very honest either. He says: I have your details in my personal contact lists built up over the years meeting Oyster Owners.
Well, my friend who received the email has never met or spoken to DT.

 

[AndrewfromFal]

And he is not very honest either. He says: I have your details in my personal contact lists built up over the years meeting Oyster Owners.
Well, my friend who received the email has never met or spoken to DT.

Getting his story out before GDPR means he can't use those contacts unless they expressly give their consent. Seems a very, very odd thing to do (am sure that's not the first time I've used that phrase in the context of DT).

Go on then, tell us how much the winning bid was for...

 

[SO40]

Out of respect for RH's wishes not to reveal it, you will not hear this from me. But no doubt it will become public knowledge soon. Apparently, it public anyway.

Here the email:

Dear colleagues



I have your details in my personal contact lists built up over the years meeting Oyster Owners, but if you'd rather I deleted them, please let me know.

I remain deeply shocked and apologetic that this all happened - directors really didn't see it coming and the attached notes may fill in some gaps. The administrators application/report for the Holdings Company has also just been published as attached. With what I think is ~£500k+ KPMG take for Oyster Marine, its too big a fee in difficult times I think.

I am looking at other ideas and many of you have been in contact about sailing plans, thank you. I may buy a brokerage yacht for the next World Rally, presuming it happens, so perhaps we'll meet on the water

Fair winds

Best regards

David Tydeman
-----------------------------------
And one of the attachments:

Oyster Overview DT - 25th April 18

Oyster started in the early 70’s as a marketing company, conceiving designs, owning the tooling needed for moulding hulls and decks and working with many sub-contractors, out-sourcing moulding and fit-out. Building female tooling to enable a series build of each type of yacht, the company built a mixture of performance, race and cruising yachts over the first 10 years, mostly 35-50 ft.

In the early 80’s the first Oyster Deck Saloon was created and this has been likened to inventing the 4 x 4, the Land-Rover of sailing. This established Oyster as a leader in marketing comfortable live-aboard cruising yachts. Solidly built, comfortable, good visibility from the saloon seating through the deck windows (hence the expression ‘deck saloon’), the yachts were capable of ocean cruising with perhaps just a husband and wife team or two couples.

Between 1980 and 2000, the company sold over 400 yachts, the largest being the Oyster 70 and the Oyster 80 (5 + 3 were built respectively). All of these yachts were moulded and fitted out with sub-contractors in Norfolk. At that time in the sailing world a large family yacht was considered to be a 50-footer and a ‘maxi-yacht’ was around 80ft. The superyacht segment over 80ft was around 15 yachts per year globally.

In the early 2000’s, the company introduced two new models– the Oyster 72 & the 82, followed by the Oyster 655 in 2004/5 – and also started the social side of the Oyster community with the first regatta in Antigua in 2001 and owner’s dinners in London.

This generated a wave of successful orders and differentiated the brand with the sense of belonging to an exclusive club. The company also sought new sub-contractors to cope with the expanding model range and orders. McDell Marine in Auckland were contracted to build the Oyster 49, 53 and the Oyster LD43 powerboats. Proving to be an innovative partner for production methods, McDell also developed the Oyster 54 in 2005, introducing new moulding techniques and modular construction. Southampton Yacht Services was also contracted to build the Oyster 61, 62 and other larger yachts, including the Oyster 82.

In parallel, the superyacht 80ft+ market segment expanded to ~30 new build contracts per year, a rolling global order-book of ~80-100 yachts and with lead times extending to 3-4 years. To address this, in July 2007, after over a year of planning, Oyster announced a partnership with RMK, a Turkish Shipyard and with Dubois Naval Architects to enter the 100ft+ segment and build the Oyster 100 and the Oyster 125.

Leveraging the in-house order-book for the 655, 72 and 82’s, adding the potential for the new Oyster Superyachts, and building on the expanding regatta and owners-club events, the founder sold the business in Feb ‘08 for what proved to be a net ~£65m, representing a ~9 multiple of the profits of the best three years in the company’s history – 2007, 08 & 09 – EBITDA ~£7m.

Sub-contractors vs. in-house

Oyster’s first step to in-source its operations was the acquisition of Southampton Yacht Services through which it was building the Oyster 82’s, some of the Oyster 655’s and 72’s. This was driven by the Oyster 82 clients wanting greater personalisation and access to the yacht during build.

This increased the contribution from the south coast yard for the overall profitability; SYS also added ~£5m pa of profitable non-Oyster work from restoration and refit projects, although it was managed ‘as a sub-contractor’ until 2012.

In 2008 and 2009, new orders halved post the financial crisis. This created losses in 2010 and 2011 as the company traded out of its order-book. Exchange rate changes made the sub-contracting with McDell unviable and during 2009, the tooling/IPR for the Oyster 54 and the LD43 powerboats were repatriated and the new build work sub-contracted to Landamores, Windboats and Broom in Norfolk.

The RMK superyacht project proved costly, man-hours and pricing over-runs became significant and the three yachts built – Oyster 100-01 delivered in 2011, 100-02 in 2012 and 125-01 in 2013 – proved that the model of fully outsourcing moulding, fit-out and commissioning to a third party in a foreign country was an expensive mistake. Oyster operations in Turkey were closed down in 2013 with the superyacht agreement between RMK and Oyster terminated, per-contract - ‘3 years after the last yacht’ - in May 2016. The lessons learned however, subsequently led to the successful development of the Oyster 118.

In 2010 & 11, the lack of orders generally led to the LD43 project being scrapped and to ideas of merging Windboats and Landamores to take cost and duplication out of the Oyster supply-chain in Norfolk.

The new models developed during this 2010-2013 period - the Oyster 885, 825, 745 & 675 – were focused on feedback from the market, the learning from the Turkish project and were designed with in-house fit-out in mind. We lifted our game technically with more sophisticated internal space planning through extensive use of Catia software. The marketing & business strategy allowed more personalisation by clients of their yachts, which in turn led to the decision to in-source the Landamores fit-out operations in Norfolk in June 2012 and to stop working with Windboats.

Reprofiling the two, now in-house shipyards, as Oyster Yachts Southampton and Oyster Yachts Wroxham, helped protect the heritage of SYS and Landamores, yet announced firmly that operations were in-house and that engineering standards had been raised.

Oyster HQ was moved from Ipswich to Southampton as part of a streamlining of overheads.

2014 results proved the success of in-sourcing with a ~30% gross margin on ~£34m turnover.
 
Polina Star

The one part of the operation not in-sourced was hull and deck moulding and in July 15 Oyster 825-02 Polina Star sank through moulding failures. This created significant direct costs for the company for legal and technical aspects, and orders and margins suffered. This flowed through to a trading loss of more than £2m in 2017.

The crisis management activities in 2015 & 2016 contained the media coverage and made it clear that this incident related to a few yachts only because these were built with a different moulding method to any other Oysters past or future. 4 Oyster 825 yachts were ‘recalled’, repaired and owners reassured. Unfortunately, the Administration process created more spurious media and much of incorrect – the flexing of the keel to hull joint was unrelated to the moulding defects which caused the failure. This flexing was genuinely a cosmetic issue and many experts supported this view.

Recovery

The recovery plans were based around 5 factors – and this required an agreed injection of ~£5m working capital from shareholders – final figure to be confirmed and paid Jan 18 latest (at a board meeting 17th Jan ‘18, we agreed £3.2m was needed plus support for the banks rolling facility of £2.5m)

1. Closely manage the moulding contractor and plan to in-source once the legal and insurance battles had completed.
2. Sell the new Oyster 118 – two orders were secured.
3. The launch of the new Oyster 565 & 595.
4. A lean budget relaunch of the Oyster 825 & 885 with a new shared deck tool and a re-designed composite structure to create the new models – Oyster 835 & 895.
5. A marketing strategy focused on the Oyster World Rally to emphasise the exclusive ‘global explorer’ nature of the brand.

This strategy was working with 6 x 565’s; 3 x 595’s and 3 x 675’s sold during the second half of 2017 and client negotiations were well advanced for new Oyster 745’s, 835’s and the 3rd 118. The 2017-19 world rally included 24 yachts bought specifically for the event – 6 new build and 18 brokerage/second-hand yachts.

The plans for the Oyster 2021 world rally included expressions of interest from 50 families, two wanting to buy new Oyster 745’s and with nearly half of them without current ownership of an Oyster and either planning to buy new or brokerage yachts.

The energy of the World Rally, the potential and the detailed and thorough investment in the new models from the 565 to the 118, was just starting to generate a pulse of orders akin to the 2003:2007 previous success of the company.


Shareholder change of mind/Bridglands

There were samples of 4 transverse beams from 5 x 825’s – 20 clear examples of proof of failure by Bridglands to mould the 825 in line with the design plans. Their legal defence did not dispute this.

Their case rested on whether they were at arms-length or whether Oyster had some management responsibility. My view was that at worst the Arbitrator could decide a 50:50 award, 50% moulding defects and 50% management for the £5m claim by Hiscox’s insurance who had settled with Mr Ezhkov.

We had £1.5m legal cover so at worst we had an exposure of 20% of £5m - £1m.

The issue for shareholders was they believed that the arbitration could be appealed and they would have to bridge the £5m on top of the working capital/recovery demands above.

This is not true in UK law – you can only appeal for a point of law (we were a tech case, not legal) or gross misconduct by the QC. In Dutch/German law its different and you can appeal/delay etc.

This seemed to be the tipping point between the board meeting 17th January and the phone calls 25-31st Jan when they decided to pull the plug on us all.

I hear that they plan to sell their RV vehicle business in German for €100m’s profit and then they will wind up HTP – if this is true it seems we were a rounding error and I remember their words “we’re rich enough to walk away”.

 

[Zing]

There is not a lot revealed in that letter that wasn’t widely known. A few interesting bits of information that are of interest and not I believe nothing there that is contentious or damaging. The reasons for the failure and proposals for the company as put out in the administrator’s statement of affairs to the company creditors are public knowledge, contrary to what you say. It was released in a public document anyone can read, including information about the winning bid amounts.

I find it hard to sympathise with your indignation about this.

 

[SO40]

What's your point Zing? That's what I am saying. It is public knowledge, but I am not going to mention it, as obviously it is not thát public. Feel free to do so yourself.
I just find it very odd that DT is emailing Oyster owners from some private gmail address. But also what he writes. Like anybody cares what his plans are. People care about Oyster, not him. It is all rather odd and that is putting it very mildly.

 

[Seven Spades]

I think the DT is makibg the point that he did a good job and that it was not his fault that Oyster went into administration. He obviously wants to clear his reputation. I don't think that there is anything more sinister than that it is just that he obviously feels that he has been a victim of the owners whim. I don't think that there is any other agenda, he is just trying to restore his reputation.

If his version if events is correct then I would have some sympathy for him, however I know that a lot of other people were not fans of his style.

 

[AndrewfromFal]

I think the DT is makibg the point that he did a good job and that it was not his fault that Oyster went into administration. He obviously wants to clear his reputation. I don't think that there is anything more sinister than that it is just that he obviously feels that he has been a victim of the owners whim. I don't think that there is any other agenda, he is just trying to restore his reputation.

If his version if events is correct then I would have some sympathy for him, however I know that a lot of other people were not fans of his style.

+1

 

[Zing]

What's your point Zing? That's what I am saying. It is public knowledge, but I am not going to mention it, as obviously it is not thát public. Feel free to do so yourself.
I just find it very odd that DT is emailing Oyster owners from some private gmail address. But also what he writes. Like anybody cares what his plans are. People care about Oyster, not him. It is all rather odd and that is putting it very mildly.

You were disparaging about the ex CEO. That he was bitter and revealed confidential info. I contradicted this. That’s my point. He was writing to his friends and acquaintances as many others, many of which cared and those that didn’t care could choose to not read it. He also was defending his role in the demise of Oyster, for which he has taken a lot of criticism and that is fair for him to have done. I don’t think it so odd to have sent it.

 

[SO40]

Zing: fair enough. I edited my comment with the fact it was public later and should have therefore removed the confidential part, as I am contradicting myself leaving it in.
However, to the other commenters: let's not pretend that the ex CEO was an innocent victim in all this.
Anyway, it is what it is. I am just happy he has left the scene and will leave it at that

 

[Lozzer]

I received the email directly and was very happy to do so. I do not see what has happened here for people to criticise.

On a more interesting note I am sure that the same people have had an email from another person / company touting for business in the spares and support area. Now this is interesting regarding protection of data as I have never given that company permission to contact me in anyway shape or form so I wonder how they got my details.

Personally I wish DT good luck for his future and if he wants to contact me again he is welcome to.