Premier Marinas - Why haven't they furloughed staff?

[migs]

Yes, we have a 30' boat berthed in a Premier marina in the Solent.

 

[dom]

Crikey, that’s about £10k in today’s money. Our annual berthing rack rate is £4k5, but of course we don’t pay anything like that. In fact, if anyone out there is paying list, the big boys are gonna love you; but you don’t need a Henley MBA to work that one out.

Why are we are so bad at negotiating? Well, for the British it’s a taboo subject, whereas for the rest of the world it’s the daily norm. If we do it at all, we start desperately embarrassed, then quickly become angry and aggressive. We don’t understand the rules of engagement (like initial position etc.), or what is a felt fair outcome.

My guess is that it’s a cultural thing, and having had the opportunity to work all over Europe, Middle East and Africa, I would nominate my top three negotiators as (in reverse order) 3: Egyptians 2: Lebanese 1: Belgians. The British come in at about 195th.

So lets do some basic calcs: Premier own c. 5000 berths and space for 2000 boats ashore. So that's 7000 in total. Total profit in 2018 was c.£4.5 million. So that's £642 per space (£4.5million / £7000).

Not much negotiation room there unless they start reducing the service.

Edit: just seen that you say you're at a Premier Marina. It is well known that they give discounts for berths which are restricted in some way - e.g. Brighton, difficult access, etc. If that works, great. If it doesn't, great. No different to theater seats?

 

[Bobc]

So lets do some basic calcs: Premier own c. 5000 berths and space for 2000 boats ashore. So that's 7000 in total. Total profit in 2018 was c.£4.5 million. So that's £642 per space (£4.5million / £7000).

Not much negotiation room there unless they start reducing the service.

Edit: just seen that you say you're at a Premier Marina. It is well known that they give discounts for berths which are restricted in some way - e.g. Brighton, difficult access, etc. If that works, great. If it doesn't, great. No different to theater seats?

Interesting numbers. It just shows you how slim the margins are without visitor fees and marina services (which are included in your numbers).

 

[migs]

We have a standard berth. I think what's going on here is that there are plenty of spare spaces for <9.5m boats, but Solent marinas are chock full of the monster craft people seem to have these days...

 

[dom]

We have a standard berth. I think what's going on here is that there are plenty of spare spaces for <9.5m boats, but Solent marinas are chock full of the monster craft people seem to have these days...

I think you may be right there; hence the reconfigs in Port Solent and Gosport to create space for bigger boats.

Returning to your Henley analogy, if you’ve landed on supply-side imbalance well done you - a free market in operation

 

[migs]

Yes, and when we finally get back to our boats, and the beer comes aboard - that's what I call a supply side imbalance.

PS. I actually did do an MBA at Henley as light relief from doing C.Eng and FIET, but that's for another day...

 

[Mark-1]

So lets do some basic calcs: Premier own c. 5000 berths and space for 2000 boats ashore. So that's 7000 in total. Total profit in 2018 was c.£4.5 million. So that's £642 per space (£4.5million / £7000).

Not much negotiation room there unless they start reducing the service.

That's a really interesting perspective.

 

[migs]

Using the same maths as dom:

Premier’s total costs were around £4.5 million, and £4.5 million / 7000 spaces gives a cost for each space of £642. If you paid say £6k for your space, that’s quite some mark-up...

 

[smert]

Using the same maths as dom:

Premier’s total costs were around £4.5 million, and £4.5 million / 7000 spaces gives a cost for each space of £642. If you paid say £6k for your space, that’s quite some mark-up...

Eh?

If it's £642 profit per £6000 berth then markup is approx 10%.

That's not huge, it's average.

Costs per berth is £6000-£642k=£5358

 

[migs]

% Markup = 100 x (Sell - Cost )/ Cost

100 x (6000-642) / 642 = 835%

 

[smert]

"Mathematically, markup is always a larger number when compared to the gross margin. Consequently, non-financial individuals think they are obtaining a larger profit than is often the case"
Margin vs Markup Differences | Effective Ways to Optimize Profitability

 

[migs]

In truth neither dom’s nor my calculations are valid; they merely demonstrate just how easy it is easy to mislead people.

What can be said is that a revenue of £9 million on costs of £4.5 million implies a mark-up of around 100%. At least this approach doesn’t involve unknown occupancy rates.

 

[dom]

In truth neither dom’s nor my calculations are valid; they merely demonstrate just how easy it is easy to mislead people.

What can be said is that a revenue of £9 million on costs of £4.5 million implies a mark-up of around 100%. At least this approach doesn’t involve unknown occupancy rates.

Hmm, I think Smert is right here, the GM you cite is totally misleading. Nobody would for example purchase a buy-to-let property for say £100k, let it for £5k a year, spend £1k p.a. on maintenance and speak of a 500% margin. But one could speak of a 5% gross yield or a 4% net yield.

How would you calculate Premier’s return on investmen?


https://s3.eu-west-2.amazonaws.com/document-api-images-live.ch.gov.uk/docs/zAuprGVhWPFfwy2J0G86uQkHr5ZFO3ezPTzGBcreIOw/application-pdf?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&X-Amz-Credential=ASIAWRGBDBV3OMPW4FGL/20200501/eu-west-2/s3/aws4_request&X-Amz-Date=20200501T212855Z&X-Amz-Expires=60&X-Amz-Security-Token=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&X-Amz-SignedHeaders=host&X-Amz-Signature=34ce05f85214507f52c04392b2281d32ee2718ef6e6fed77b48f30d284e02303

 

[migs]

All goes to show that accountants can be quite creative when they feel like it...

 

[dom]

All goes to show that accountants can be quite creative when they feel like it...

Accounts have a clean audit report from Deloitte - doubt there’s any mucking around going on there.

On which basis, how would you calculate Premier’s return on investment?

IMHO it’s a solid fairly low yielding asset - a sign of the times and nothing in the least untoward.

 

[Sticky Fingers]

Boardroom Chronicles Part 2 - see post #88 for part 1
(We’re back again around the board table at Marina Towers - it’s now June)
FD: What are we gonna do; the forums are full of customers worried about us not sharing the excess profits we made during the crisis?
CEO: Don’t worry sonny. We’ll give them 10% off for last April, (i.e. 0.8% per annum), but only as lift-out vouchers. Their boats will be so hairy due to the lockout, they’ll be queuing up.
FD: Sorted; looks like a win-win for the good guys. High fives all round.
Scene fades to a general buzz of bonhomie...
PS. Of course this is pure conjecture. Actors voices have been used to protect the innocent.

...Our annual berthing rack rate is £4k5, but of course we don’t pay anything like that. In fact, if anyone out there is paying list, the big boys are gonna love you; but you don’t need a Henley MBA to work that one out.

...C. If marinas do end up with excessive profits as a result of the crisis, the wealthy were happy to hand over their money as long as everyone else agreed to be labelled as tightwad whiners (social media speak for ‘I don’t give xxxx about your opinion. Mummy I want to see the bad man fly…

Yes, we have a 30' boat berthed in a Premier marina in the Solent.

We have a standard berth. I think what's going on here is that there are plenty of spare spaces for <9.5m boats, but Solent marinas are chock full of the monster craft people seem to have these days...

...PS. I actually did do an MBA at Henley as light relief from doing C.Eng and FIET, but that's for another day...

Using the same maths as dom:
Premier’s total costs were around £4.5 million, and £4.5 million / 7000 spaces gives a cost for each space of £642. If you paid say £6k for your space, that’s quite some mark-up...

In truth neither dom’s nor my calculations are valid; they merely demonstrate just how easy it is easy to mislead people. What can be said is that a revenue of £9 million on costs of £4.5 million implies a mark-up of around 100%. At least this approach doesn’t involve unknown occupancy rates.

You seem determined to hate Premier. Why not find a berth elsewhere? Maybe you could find somewhere that will give you an even bigger discount.

Your Henley MBA has not served you well it would seem... Sadly, you've fallen into the trap of shooting your mouth off in full poessession of an opinion, but no actual facts. There are many companies in play here. For example. Premier Marina Holdings Limited. About £30m. Premier Marinas Limited. About £9m. Most of the individual marinas, example, Brighton, about £4m. All figs from Companies House latest filings.

Basing any remarks on the berth capacity of the entire group, but the turnover /profit of only a part especially whilst you have no knowledge of how those numbers are apportioned, is just plain wrong.

No connection in any way other than as a satisfied berth holder.

 

[migs]

Oh dear, we’re back to personal attacks again. People will give up on this forum if they are not allowed to express an opinion without being insulted.

 

[Bobc]

% Markup = 100 x (Sell - Cost )/ Cost

100 x (6000-642) / 642 = 835%

MBA not going too well then?

 

[nicho]

I assume you're not in the Solent then? When all the marinas are full and they all charge about the same rate, there is little or no negotiation I'm afraid.

Make that NO negotiation! Rates are rates, take it or leave it. The Solent is very popular, crowded yes at times, but some great destinations within a few miles. Proximity to Greater London means plenty of well to do customers. I guess if the current crisis means many owners giving up, then a lot of empty berths could well see some ‘special offers’

 

[migs]

My thanks to all those who have contributed in a positive way to the discussion.

For many this forum has been a much-loved source of knowledge and inspiration. Now it has become home to some nasty, viscous, bullies, it’s time for me to move on.