The Steamship Company accounts (and Skybus) have recently been posted at Companies House. Turnover for the Group was up 2.1% at £17.457 million (2017 £17.094 million) but gross profit was down substantially at £0.373 million (2017 £ 1.405 million) with staff costs up by £679,000 (to £6.629 million) reflecting an increase in staff numbers (extra 14) and increases costs due to regulatory changes (introduction of living wage and pension changes). Increased vessel maintenance costs of £273,000 also contributed to the reduction in gross profit. The final profit/loss for the year was a loss of £119,000 due to an exceptional item (Mali Rose impairment of £633,447).
Ferry passengers were up substantially 7.8% at 122,381 (2017 113,497) but Skybus numbers were down 2.5% at 93,243 (2017 96,338). Skybus reported a net loss of £42,479 after tax (gross loss £90,479).
The Groups Net Current Assets/Liabilities stood at negative £883,819, a deterioration from 2017 (negative £160,460) due to continued spending on new fixed assets. Cash at bank stood at £4.951 million.
Note 25 to the accounts (page 49) refers to IOS Skybus Ltd entering into a three year contract for helicopters services from May 18 with a maximum commitment of £4.561 million.
The issue of governance and managing changes in governance feature large in the Directors’ Strategic Report (pages 7 – 11).
The Mali Rose has cast a pall over the Company’s finances to which has now been added the £4.5 million 3 year contract (after year end) for helicopter services from Lands End Airport which must, in part, be expected to cannibalise Skybus’ customer base and increase its losses significantly.
The Company accounts explain that the Mali Rose has been valued using the ‘value in use’ valuation which is based upon the future discounted profit stream from the vessel in use rather than the vessel’s resale value. This valuation resulted in declaration of an impairment in the asset value of the vessel of £633,447. One can speculate that a traditional resale value valuation would have resulted in declaration of a larger impairment. The Mali Rose is due to enter a period of operational trials for 3 months shortly.
The attention to the issue of governance in the Directors' Strategic Report has to be welcomed.