The Plymouth-based luxury boatbuilder Princess Yachts has announced record profits of £30million, as its remarkable turnaround continues.
The company, which found itself in the red in 2015 and only three years ago announced it would cut 350 jobs, showed a £30million operating profit in 2018 on turnover of £340million.
The Stonehouse headquartered company has set new records for yacht sales and employment and is celebrating its most successful year in its 54 year history with forward orders worth £700million and stretching through 2020
Financial results for the 12 months to December 31, 2018, show record turnover of £340.3million, up £65.9million, that's 24% on 2017. There was also a record operating profit before exceptionals of £29.8million, up £10.9million, or 173%. EBITDA (earnings before interest, tax, depreciation and amortization) for 2018 was £32.8m up from £14.9millio in 2017.
In 2018 Princess hit a record high for employment of 3,200. Recruitment has taken place across the business from engineering to exterior design, manufacturing to management, making Princess one of the UK’s largest specialist manufacturers. Princess also increased investment in its successful apprenticeship programme with 40 new apprentices brought into the business; apprentices now make up 4% of the workforce with a 100% retention rate following qualification.
In 2016 Princess Yachts brought in Antony Sheriff, former managing director of supercar manufacturer McLaren Automotive, as executive chairman, and pumped in a £100million investment. The company’s five boatyards in and around Plymouth are working at capacity.
“British industry is known for its craftsmanship,” Mr Sheriff said. “But there’s nothing like what we do here at Princess Yachts. We have craftspeople that make every part of the boat, apart from the electronics and engines.
“This gives us unique control over quality. We make our boats for boaters – they’re not just floating gin palaces.” He said they were now “the preeminent in UK luxury yacht brand, and possibly the world”.
Princess makes yachts in the 35ft to 130ft range. Over the past three years the company has launched 16 new models, with more on the slipway.
“The yachting industry isn’t known for innovation,” Mr Sheriff said. “I have come from a background of supercars, where the concept of having no innovation was foreign.”
The newest innovation is the R35, a 50-knot speedster built of carbon fibre, with a “active foiling” technology more familiar from racing yachts.
They work with Italian designers Pininfarina, Isle of Wight naval architects Olesinski and a 100-strong in-house team.
More about Princess Yachts
Mr Sheriff said they had drawn up contingency plans for Brexit, but in the meantime a week pound was helping exports. Half of the boats built in Plymouth are sold in Europe, including the UK, a quarter go to the Americas, and a quarter to the rest of the world. Some foreign customers were holding off because of uncertainty about future tariffs, he said.
But international sales continue to provide strong growth. At the Düsseldorf Boat Show in January this year Princess took orders for 21 yachts. Prices range from £300,000 to £17million. The company is now eyeing the Chinese market.
Princess Yachts’ exceptional figures were based on a combination of strong sales at the industry’s three biggest global boat shows – Cannes, Fort Lauderdale and Düsseldorf – and new levels of interest in the brand driven by increased investment in design and technology, progressive new global retail partners, and innovative marketing activity. 2019 began in equally buoyant form with strong orders secured at the 2019 Düsseldorf Boat Show in January.
The focus on luxury slots neatly into the portfolio of the majority shareholder, the French businessman Bernard Arnault, whose LVMH group owns brands including Louis Vuitton, Christian Dior and Veuve Clicquot.
Princess has continued to invest in a sustainable strategy to ensure that the business continues to drive forward product innovation and its manufacturing capabilities. As a result £14.7million (2017: £8.9millioon) was invested back into product development in 2018. With more than 75% of each yacht manufactured in Plymouth, Princess continues to invest in its UK sites, adding capital expenditure of £9.0million to the additions in 2017 of £3.7million.
To help drive this plan HSBC UK Bank plc and National Westminster Bank plc have refinanced Princess Yachts, backed by L Catterton (a partnership between Catterton, LVMH and Groupe Arnault), as part of the growth of the business, having constructed a multi-year funding facility as of May 16, 2019.
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To contact William Telford: william.telford@reachplc.com
