Sealine sold to US investors

[stelican]

Sealine

I believe that Ancasta have tried hard to promote the Sealine Brand ie. Their Sealine Roadshow promotion throughout UK marinas,Constant advertising and the ability to speak to a Sealine salesman in all the major boating centres seven days a week
I cannot see a new set up on the River Itchen equalling that amount of effort.
Can only assume that Ancasta found dealership not viable as Sealine currently only have one good seller.

 

[rafiki_]

I would take a guess that Sealine want to take a bigger margin out of the boat sale. For obvious reasons, direct sales carry a far higher margin than dealer sales.

In terms of the P&L, the cost of building a new sales showroom is a capital cost, which can be written down over say 25 years, so a very small part of the P&L, although clearly the assets increase on day 1.

Of course, the business case only works if Sealine can sell at least as many as Ancasta used to do. Ancasta had an advantage in being a multi brand outlet, so one might have gone to look at a Bavaria, and ended up with a Sealine. Clearly a direct sales outlet is 100% focussed. Plus the opportunity to again recover higher margins from spares/options/lifestyle gear etc.

I hope it works for them.

 

[Nick_H]

In terms of the P&L, the cost of building a new sales showroom is a capital cost, which can be written down over say 25 years, so a very small part of the P&L

Yes, but investors don't look at profit so much as return on investment, so if the investment goes up (by building flash showrooms) then the profit must go up accordingly or the ROI falls, hence Deleted User's comment that in many buyers mind, flash showroom equals higher prices.

 

[rafiki_]

Yes, but investors don't look at profit so much as return on investment, so if the investment goes up (by building flash showrooms) then the profit must go up accordingly or the ROI falls, hence Deleted User's comment that in many buyers mind, flash showroom equals higher prices.

I tend to agree. If I visit a service supplier where I am wading through wilton and sinking into serious furniture, I am cynical about pricing and value. However, a showroom has to be fit for purpose, and I would not want to be putting life and limb at danger when visiting a Sealine dealership.

A decent car showroom will need to have invested £1 mil + as a comparison, and this excludes the building.

 

[Deleted User YDKXO]

I would take a guess that Sealine want to take a bigger margin out of the boat sale. For obvious reasons, direct sales carry a far higher margin than dealer sales.

Yeah but thats before the depreciation on the showroom, the cost of the stock, the salaries and company cars of the overpaid salesmen and the cost of the potted plants and coffee! At the end of the day, Sealine might well find out that the margins they're actually making on selling their boats are a lot thinner than when they just sold them to a dealer and forgot about them

 

[Moody]

This has got me thinking about Sealine sales in the short term.

Let's just say that SWMBO tells me where she's hidden the cheque book, and I role up at SIBS to do a deal on their new SC42. Obviously I would want to chop in my SC35, and previously I would have sat down with someone from Ancasta and probably been able to thrash out a deal on the day.

I wouldn't be so confident that there would be someone from the factory able to do that deal.

By the way it's not a very likely scenario.

Neil

 

[rafiki_]

Yeah but thats before the depreciation on the showroom, the cost of the stock, the salaries and company cars of the overpaid salesmen and the cost of the potted plants and coffee! At the end of the day, Sealine might well find out that the margins they're actually making on selling their boats are a lot thinner than when they just sold them to a dealer and forgot about them

Yes, but if you can double the margin, these overheads are quickly consumed. I'm not sure how Sealine manage their business, or at what point the boats are considered sold? In some cases, to improve cash flow, the builder sells the boat to a bank, who then sells on the vessel to the dealer. Clearly here, the builder takes a significant hit on the margin, but does not have expensive inventory lying around.

 

[Nick_H]

In some cases, to improve cash flow, the builder sells the boat to a bank, who then sells on the vessel to the dealer.

Is this speculation or you know of cases where it's happened? Why wouldn't the bank just offer the dealer a mortgage secured on the boat?

 

[joliette]

A boatbuilder could arrange to factor their invoices - to a dealer or end customer -thus securing their cashflow and passing the risk of collection to the bank. Maybe Sealine's new owners will consider implementing this type of mechanism.

 

[lovezoo]

I think you will find Sealine's new owners have no need for any kind of external finance. Part of the idea of this kind of operation is to do something useful with the vast amounts of cash that very high net worth individuals have lying around. Use some of that cash to buy a business and some more to finance it. Hopefully increase the value of the investment, whilst at the same time pay a decent rate of interest on the loan.

 

[Nick_H]

A boatbuilder could arrange to factor their invoices - to a dealer or end customer -thus securing their cashflow and passing the risk of collection to the bank. Maybe Sealine's new owners will consider implementing this type of mechanism.

Factoring, and other similar arrangements, only raise cash during the credit period, and I doubt dealers or end customers are given credit by the manufacturers when buying boats, in fact isn't it normal for stage payments to be made? Even if the manufacturer did give credit, factoring relies on the debtor being financially robust, or the bank wont lend against the invoice, and I wonder how many dealers would fall in to that category anyway. I couldn't see banks factoring invoices to end customers at all, for low volume, high value, purchases like boats.

 

[Deleted User YDKXO]

Yes, but if you can double the margin, these overheads are quickly consumed.

rafiki, I've been on both sides of the fence when it comes to manufacturer owned sales operations v dealers. The key point is the difference in motivation between the 2 types of organisation. A good dealer organisation is motivated to maximise sales and minimise overheads because their livelihood depends entirely on that. Even the best manufacturer's sales operations tend to be staffed by company men who know their salaries will arrive in their bank accounts every month however well or badly the organisation does; basically there is less motivation to go the extra mile to get the sale

 

[Hugo_Andreae]

Latest development from Ancasta:

"Ancasta International Boat Sales are delighted to be representing Prestige Luxury Motor Yachts on the UK’s South Coast from today.
Commenting on the appointment Ancasta Managing Director Nick Griffith said, “This stylish and contemporary range is ideal for our customers in the UK and we’re all very excited to be representing Prestige Motor Yachts. The impressive new product development plan ensures an exciting future that’s full of innovative design. I have no doubt that the exacting levels of quality and technology offered by Prestige not only lead the way in our industry, but can be complemented by our own award winning aftersales and commissioning teams, to ensure that this is a long and successful partnership.”
Jean-Paul Chapeleau, General Manager of Prestige and Prestige Yachts commented “It is a pleasure to announce that Ancasta will distribute the Prestige range in the South of England. As part of our strategy for the worldwide development of the Prestige brand we are keen to strengthen our distribution network in those countries that currently offer the most potential and it’s clear that the market presence of this strong partner ensures the future success of the Prestige brand in the UK. We are excited to welcome the Ancasta staff to our boats at the forthcoming PSP Southampton Boat Show and look forward to a successful show together to mark the start of what I am sure will be an enjoyable partnership for both companies’”
There are 11 models in the 2012 Prestige range of flybridge motor yachts and sports cruisers, ranging in length from 35 to 60 feet.
Ancasta will be representing Prestige at the forthcoming PSP Southampton Boat Show with 3 Prestige motor yachts on display: the Prestige 350 flybridge, the Prestige 390s and the Prestige 500s (new for 2011/12)."

 

[MapisM]

I just read the latest news on Fountain Powerboats, and this thread where we mentioned them and their financial investors sprung to my mind. Maybe the article might be of interest for someone else.