海角视频 boat-builder Princess Yachts is more concerned about a possible global recession than the threat of Brexit as it heads into the crucial boat show season aiming to maintain a momentum which saw it declare record £30million profits in 2019.
The Plymouth-headquartered company, now positioning itself as the 海角视频’s leading luxury vessel brand, has sustained three years of impressive growth.
But it is now warning that expansion may plateau when the 2020 figures come out, though this is as much because the company is now entering a consolidation phase after a spurt which saw sales jump 24% to £340.3million in 2018/19, as it is the result of any Brexit uncertainty.
Top brass said the firm now needs to concentrate on maintaining the super-high quality of its products, after releasing nine new models in the past year.
It is pushing into an even higher-end market, usually less affected by turbulence in the economy, with models such as the “game changing” £6.5million X95, which cleverly packs more living space into a 95-footer without having to add length.
Plymouth Yachts is debuting five of its new models - the Princess S62, S66, F50, V55 and Y58 – at the 10-day Southampton Boat Show, From September 13, where its 12 display vessels will make it the largest exhibitor.
And it said that even though the European Union remains its largest market, it feels confident that any currency fluctuations will balance out any tariffs imposed post-Brexit, thus protecting the firm.
But global economic headwinds are a bigger threat to knocking the company, which employs about 3,000 people in Plymouth, off course.
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“The problem is no one has a clue about Brexit, said executive chairman Antony Sheriff. “All the things we need to do in terms of paperwork, that has been done. That’s the easy part. Everything else is difficult to plan for.
“So we will need to be nimble and cautious. We would not expect explosive growth, as a high exporter, but we do expect everyone will be sensible and there will be no additional trade barriers with the EU and other countries.
“But Canada, for instance, has a trade arrangement with the EU, not the 海角视频, so someone will have to figure it out in the short-term and long-term if there is no trade agreement in place.”
He said Princess has a “diverse” sales base, with 25% of its boats, which can fetch up to £20million, going to the Americas, 25% to the Middle East and Asia, 35% to Europe, mainly the EU, and just 15% to the 海角视频.
He said the firm is optimistic a no-deal exit will be avoided but said Britain could struggle after Brexit. However Princess would stay afloat, though growth may be tricky.
“We are confident common sense will prevail, but if it does not we (the 海角视频) are in a difficult situation,” Mr Sheriff said. “The pound will be a record weak levels, but if you export that is a good thing. But if there are trade barriers, 10% for example, the 海角视频 economy would take a hit.
“But the pound would go down and we sell in pounds. And we are seeing customers ordering a number of boats for after Brexit. But it’s absolutely prudent to be cautious and not plan on large growth. This is a moment of pause. But we have new products so are optimistic.
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“The larger, more expensive products are increasing in sales and for smaller products we have an enormous waiting list for them. We have quite a degree of confidence.
“The boats we are planning to make next year are about 80% ordered already – and we are now going to the boat shows.
“September and October are key, Southampton is followed by Cannes, Genoa, Monaco and Fort Lauderdale.
“We have no idea what will happen (with Brexit). There is probably more risk from a General Election and the 海角视频 political system breaking down.
“But the longer term concern is 2021, that it will be affected if there is some kind of downturn, a global recession.”
He said global headwinds may put off some customers, those wealthy enough to spend but still a little careful with money. The super-rich, however, are more fearless.
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“We see some issues with some customers,” Mr Sheriff said. “You would think it’s the customers with the biggest boats that would be worried but we sold four 85ft motor yachts at the Palm Beach boat show this year.
“Instead it is the people we want to break into, that have the wealth to buy but don’t yet have a yacht in their life, they are hard to bring in when there is uncertainty.”
As a result or all these factors 2020 is likely to be a year of consolidation. Mr Sheriff said: “We still see the market as strong. Out biggest distributor just had the best August we’ve ever had.
“But there is a degree of uncertainty. We hope next year will be a strong year, stronger than this year and 2018, or about the same order of magnitude, but it is hard to say for 2019, we have had some costs, so it may be a bit worse.”
Mr Sheriff said the thrust for 2020 therefore will be to ensure quality in every product, so every customer is delighted with their purchase.
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“A lot of work has gone into the design and engineering integrity and improving the visual appeal,” he said. “We have to maintain where we are and achieve a level of build and perceived quality that is the best in the industry. We will have a boat that comes out with zero defects.”
But he stressed that whatever happens Princess will not be leaving Plymouth.
“Logistically it’s a difficult place to be,” he said. “We could have mitigated any Brexit risk by moving operations to Europe and building factories there. But we have been good citizens to this city and invested here, bringing in a net 1,000 staff in three years. We have no plans or intention of moving anything out of the city.”