BOAT BUILDER SINKS

[anthony]

IVE just been reading an artical in Canal Boat magazine that some of you new boat buyers might want to read.

 

Buyers have lost thousands to Anthony M a boat builder in Harworth who has gone bankrupt.

 

The guy asked for payments in advance.

 

This gets me thinking and others possibly just what is the safe way to buy a new shell, boat ect from a boat builder?

 

The poor people in the magazine artical had sold their house to fund the boat and have lost a lot of money.

Edited October 19, 2005 by anthony

[Big COL]

IVE just been reading an artical in Canal Boat magazine that some of you new boat buyers might want to read.

 

Buyers have lost thousands to Anthony M a boat builder in Harworth who has gone bankrupt.

 

The guy asked for payments in advance.

 

This gets me thinking and others possibly just what is the safe way to buy a new shell, boat ect from a boat builder?

 

The poor people in the magazine artical had sold their house to fund the boat and have lost a lot of money.

 

Anthony

 

This is becoming a regular event, there seems to be one every year. The big p--s take is, that they start up again within a few months if not sooner.

[Gary Peacock]

A bad one is this there is no easy answer, dealing with a builder using a BMF contract and who is a BMF member is some safe guard.

 

Only paying stage payments when work is complete to that stage is also sensible.

 

Boat building in this country is changing the time span between sailing along merrily and being on the rocks can be very quick indeed.

 

At one time long order books used to be the claimed way of identifying the best and safest builders. But basing the future on deposits taken on the order book can be misleading deposits are often held and subject to cancellation. Unexpected changes in the economy and overheads can make it favourable to loose these long term orders rather than build them.

 

HM C&E wiped out £340,000 of orders on our books in the blink of an eye, to fight back from that was very hard.

 

The industry in general tends to be run on a shoe string and many builders are at the mercy of the banks from time to time.

 

Sorry although I can't condone the actions of Tony Walker, but I can see how it can come about so easily within this industry.

 

All I can offer in the way of advice is keep an eye on your build if it is falling behind the best bet is it could be due to cash flow if you suspect a problem do not pay anymore than the stage payments that are due do not be tempted to make cash advances to speed up the build.

 

Sorry I can't offer any real pearls of wisdom on this but I do really feel for the poor customers left to count the cost.

[gaggle]

500 quid deposit allocated build slot,5 grand steel payment,further payment on shell completion,further payments ,amounts agreed between builder and customer during fit out,and final completion payment on completion.

if anything went wrong during the progress i held the right and ownership of all material and vessel as it was at the time.

 

make no mistake if things had gone wrong i would have known as they were very local,i made friends with key workers to keep me up to scratch and i would have been in like a shot with a hired vehichle to claim my property ie the boat or goods to the value of.

 

we are not talking pennies here so the law has to be taken into your own hands.

 

i myself have been in the position where i could have been a lot wealthier if i decided to go bankrupt and to hell with the creditors,but the kind of person who does it is not worth a candle.

bankruptcy does not suddenly appear in the majority of cases,the facts are known long before and those responsable take the money and run.

they stink. and i have just deleted what i really think of them.

[anthony]

Out of interest gaggle how would you get your goods quickly?

 

A 50 foot narrow boat isnt easy to grab then store at no notice?

 

IM thinking things like this should be planned ahead in case of the worse case scenario.

 

Do you think the builder could get heavy if you came along and said right this is my boat your going under so im taking it?

Could he not call the Police to prevent you as it would be the receivers property?

 

I know we may be getting ahead of ourselves here but its a scenario someone could well find themselves in one day especially with the amount of cheap shells being offered in the canal magazines.

[tony collins]

I too saw the story in Canal Boat. Just an idea.....

As I understand it, some of the problem may stem from the fact that the boat builder is actually a fitter-out, buying the shell in from elsewhere, having to finance the purchase up front. This being the case perhaps it would be safer to buy the shell direct from the shell builder and free issue it to the fitter-out. Then you would not be losing quite so much if one or the other should go under. In my case I bought a bare shell having put down a deposit of around 15% this ensured that they had enough money to buy the steel with which to make the build. I then paid the balance on collection.

It actually only takes about six weeks to build the shell, so an initial holding deposit may be required during the lead time prior to start of the build. It is a sad fact that increasing steel prices, (much more volatile than any other part of the boat) and long lead times, may mean that the contracted price holds no attraction for the fabricators unless an inflation clause is included in the agreement.

The buyer cannot have it both ways, a fixed price for (say) two years hence AND security of order. The fabricator has no way of knowing commodity prices that far ahead. They may offer a low price to fill the order book and regret it later as there is insufficient profit to make it worth while. A lifetime in industrial sales has proved many times that it is quite easy to fill the order book, filling it with profitable business is the knack you need.

Just one thing, if Canal Boat had this story and published first, why, I wonder did Waterways World not have it?

 

 

Tony

[Gary Peacock]

It was very common knowledge in the industry within a couple of day's but the press tread very carefully the advertising makes specialist publications profitable not the circulation.

 

In this case gone today doesn't necessarily mean not back tomorrow and at that point roll on with the new advertising campaign.

Edited October 19, 2005 by Gary Peacock

[gaggle]

Out of interest gaggle how would you get your goods quickly?

 

A 50 foot narrow boat isnt easy to grab then store at no notice?

 

IM thinking things like this should be planned ahead in case of the worse case scenario.

 

Do you think the builder could get heavy if you came along and said right this is my boat your going under so im taking it?

Could he not call the Police to prevent you as it would be the receivers property?

 

I know we may be getting ahead of ourselves here but its a scenario someone could well find themselves in one day especially with the amount of cheap shells being offered in the canal magazines.

it is in a standard contract that the boat in whatever stage of build is the customers property,the steel is paid for prior to being fabricated to a boat ,it belongs to me the customer

as for the builder getting heavy,he would be in no doubt about who could get heavier,me or him.

the general person when confronted with the proposal that he is dealing with someone who is quite willing to go the whole hog and do some time for his actions relent and see sense.

 

saying that i still took steps before i done the deal with the builder,who do i know that knows them,check with these people and get them to let the builder know who i am and what could happen if things went wrong,come to the understanding that both parties do not want the hassle or inconveniance of any mix ups.

i am sure ant that you know people that know people and all the people want to get along and help each other out.

well that was my way of going about it and the builder is of the same mind,i had no need to sign the contract nor him but it was understood what we were about.

[John Orentas]

It doesn't work that way, you would immediately be dealing with the receiver, he will have the law and everything else on his side the only thing he will be interested in doing is raising cash initially to pay off the preferential creditors, the banks.

 

You won't get a single wood-screw out of there.

[Keeping Up]

It doesn't work that way, you would immediately be dealing with the receiver, he will have the law and everything else on his side the only thing he will be interested in doing is raising cash initially to pay off the preferential creditors, the banks.

 

You won't get a single wood-screw out of there.

I read that in this case the builder took the money up front from the unlucky purchaser then took delivery of the shell on credit and never paid for it. Therefore the shell never belonged to the builder, hence the stage payment clause in the purchaser's contract became worthless because although that which the builder had owned now belonged to the purchaser, that did not include the shell. Until now I'd always thought the standard stage payment terms in the contract gave the purchaser some protection, but now I'm not so sure.

[Gary Stacey]

I know the person in question in the article. John is a friend of mine and has been since we were both involved in selling/buying houses to realise our dreams of moving on to a boat. In this case the article speaks the truth, John handed over the first stage payment due under the terms of the BMF contract in good faith, unfortunately for him these monies were not passsed on to the shell builder for one reason or another. Whether or not John get back any of the money is down to the receiver and various points of law.

 

One interesting point is that rumour has it that this is not the first time that AM has been in this position with a company. John deserves our sympathy and if you knew more about the situation you would realise that AM does not.

 

Gary

[Gary Peacock]

The big problem is that times have changed in many ways.

 

The BMF standard contract for purchase of a new boat and all other stage payment variations came about in a era when many builders were very small scale and probably only building 2 or 3 boats per year.

 

 

You now have a situation where large numbers of relatively new companies sprung up in the happy times of the last 8 years or so and these companies have expanded rapidly with the demand. The profits alone do not fund expansion so the banks swarm in to lend them the money as expanding business.

 

At the time the stage payment system came about it made it possible for a builder to build a boat with little or no capital the customer more or less 100% financing their own boat by stages through the build.

 

With today's increases in overheads and reduced expected profits the first nee jerk reaction is to increase production to maintain the profitability. As in all business this is a route to be planned carefully expansion is guaranteed to increase expenditure not profits.

 

Now at a time the boat building bubble is beginning to burst, the first lean year for a while and orders are down, labour costs are increasing along with the overheads and a massive increase in steel prices turns that 3 year order book into an albatross.

The trap is set, from the order book you can see the next 3 years are going to be largely unprofitable your new prices should be viable but you have to survive until the 3 year point when those builds start and the bank is already on your case.

 

Rapidly the customers stage payments cease to be payments for a specific boats but just a payments to stay above water.

 

The inevitable outcome is fairly obvious.

 

 

 

 

 

By the way don't take this to be an excuse on behalf of builders, unfortunately it is just a fact of life in a country where very little support is given to small business's in any manufacturing field.

 

The end of the day everyone looses customers, staff, owners, banks and the government.

[dor]

You read it here first!

 

THe fitter out, Anthony M, has I believe recently gone bust. Not only that but has done so owing several prospective boat owners a lot of money. AND has basically told them - tough. The owner of the business is also reported as saying that he can set up again tomorrow.

 

Maybe not so respected.

 

From 30th september - now if I can work out how to insert the link......

 

http://www.canalworld.net/forums/index.php...ic=2542&hl=bust

[Gary Peacock]

I know the person in question in the article. John is a friend of mine and has been since we were both involved in selling/buying houses to realise our dreams of moving on to a boat. In this case the article speaks the truth, John handed over the first stage payment due under the terms of the BMF contract in good faith, unfortunately for him these monies were not passed on to the shell builder for one reason or another. Whether or not John get back any of the money is down to the receiver and various points of law.

 

One interesting point is that rumour has it that this is not the first time that AM has been in this position with a company. John deserves our sympathy and if you knew more about the situation you would realise that AM does not.

 

Gary

 

I wouldn't hold out too much hope on the receiver front I think most people who have visited many builders yards can probably guess how much even some well known builders are worth in the terms of physical assets.

The truth is many on paper will be worth surprisingly little with leased property and equipment, I used to work for finance company on the repossessions side it was quite amusing how little you need to own to actually run a company!

Edited October 20, 2005 by Gary Peacock

[Richard Fairhurst]

Just one thing, if Canal Boat had this story and published first, why, I wonder did Waterways World not have it?

 

It was indeed a 'treading carefully' situation as Gary suggests, but nothing to do with advertising - in fact, all three magazines' advertising departments will try to turn away ads from any company where they have reasonable evidence that there are problems. Rather, I believe that the decision not to publish was because Tony Walker hadn't formally been declared bankrupt, so there could have been libel issues. (It was slightly before my 'watch' began, so I may have the wrong understanding here.)

 

December will be my first issue as editor and I will probably take a different view on such things.

 

Meanwhile, if anyone hears of Tony Walker starting up again under a different name, do let me know.

 

Richard

[Gary Peacock]

It was indeed a 'treading carefully' situation as Gary suggests, but nothing to do with advertising - in fact, all three magazines' advertising departments will try to turn away ads from any company where they have reasonable evidence that there are problems. Rather, I believe that the decision not to publish was because Tony Walker hadn't formally been declared bankrupt, so there could have been libel issues. (It was slightly before my 'watch' began, so I may have the wrong understanding here.)

 

December will be my first issue as editor and I will probably take a different view on such things.

 

Meanwhile, if anyone hears of Tony Walker starting up again under a different name, do let me know.

 

Richard

 

Glad to here it's that reason Richard I much prefer that one.

 

Good look with the new position

[matt]

Some protection could be gained by you paying the hardware supplier direct (rather than via the fitter), then you clearly own the goods.

 

Have a written contract with the fitter with some 'for the avoidance of doubt' lines in about the ownership of the hardware.

 

Pay the fitter one month in arrears like the rest of the world gets paid.

 

The receivers have no claim to any goods and if things go south the worse case is you have a rusty tub outside your house for a few weeks while you find a new fitter (plus some logistics costs).

 

You may pay a higher fitter rate, as they won't be making margin on the hardware but you'd be getting the hardware cheaper, probably not as cheap as the fitter would. But what's 5% for security ...

[anthony]

So it would be a good idea to get a declaration and receipts along the way to prove the builder has paid his supplier.

 

IM wondering if for example next week if i phoned up Liverpool Boats and said i wanted a 55 foot sailaway if they will own the shell and any materials they started work on or would they buy it on credit.

 

Would it be reasonable for me to ask for receipts as the build went along?

 

Some one with a tansit van needs to take that Anthony for a drive somewhere dark if he intentionally did this to these people.

 

For me all this certainly brings a new perspective on the term ''buyer beware''

 

Gaggle i hear what you are saying matey but someone knowing you know people dont stop them trying their luck especially when the law will technically be on their side as thats the way they set these things up.

 

Them knowing you know where they live and other personal details is far more effective plus the fact you like to go clay pigeon shooting makes them think twice.

 

These people who got ripped off worked hard for that money they have lost and any one of us could be in exactly the same position one day,food for thought i would say.

[matt]

So it would be a good idea to get a declaration and receipts along the way to prove the builder has paid his supplier.

 

Them knowing you know where they live and other personal details is far more effective plus the fact you like to go clay pigeon shooting makes them think twice.

 

If you are buying it 'through' someone - it's all out of your control. Whether they buy on credit or not is irrelevant. It's the order of the creditors that matters if things go tits - the bank, or a supplier may have a mortgage on the company (info available from companies house I think), which put them ahead of you in the queue for assets.

 

You could pay them today and it could all go wrong tomorrow, whether you see anything back is out of your control. Often if you do get something back - it's a fraction and it takes a long time.

 

The event itself could be out you their control, they may not be crooks, the bank may have changed thier risk assement of the company (maybe not the companies fault, just a change in bank policy) and withdraw an overdraft or similar facility. Equally a supplier down the line could get into trouble - take an upfront payment from your supplier, but not send the goods. Equally a customer may default on a payment. There are many things to go wrong when you run a company. Often the people running blue-collar companies are tradesmen who don't have commerical experience, they want to work for themselves and make a product and don't have skills to deal with banks etc. that someone more commercial would.

 

Most issues like this are not fraud or intended fraud, they are just bad luck or bad management of the business or both.

 

If you pay for the parts directly yourself, you will always own these on delivery to your fitter - no matter what happens to the fitter or the supplier of the parts.

[charles123]

The big problem is that times have changed in many ways.

 

The BMF standard contract for purchase of a new boat and all other stage payment variations came about in a era when many builders were very small scale and probably only building 2 or 3 boats per year.

You now have a situation where large numbers of relatively new companies sprung up in the happy times of the last 8 years or so and these companies have expanded rapidly with the demand. The profits alone do not fund expansion so the banks swarm in to lend them the money as expanding business.

 

At the time the stage payment system came about it made it possible for a builder to build a boat with little or no capital the customer more or less 100% financing their own boat by stages through the build.

 

With today's increases in overheads and reduced expected profits the first nee jerk reaction is to increase production to maintain the profitability. As in all business this is a route to be planned carefully expansion is guaranteed to increase expenditure not profits.

 

Now at a time the boat building bubble is beginning to burst, the first lean year for a while and orders are down, labour costs are increasing along with the overheads and a massive increase in steel prices turns that 3 year order book into an albatross.

The trap is set, from the order book you can see the next 3 years are going to be largely unprofitable your new prices should be viable but you have to survive until the 3 year point when those builds start and the bank is already on your case.

 

Rapidly the customers stage payments cease to be payments for a specific boats but just a payments to stay above water.

 

The inevitable outcome is fairly obvious.

By the way don't take this to be an excuse on behalf of builders, unfortunately it is just a fact of life in a country where very little support is given to small business's in any manufacturing field.

 

The end of the day everyone looses customers, staff, owners, banks and the government.

 

 

Garry's summary is entirely correct. Its tough to make money. The profit margin for small fitters is very small and when you think they are turning out only half a dozen boats a year, they dont have the throughput to accumulate much profit once all the bills are paid, nor is the boat building business big enough to deliver much in the way of economies of scale. I dont know anything about Anthony except his interiors are of the best around and that level of quality costs, mostly in labour. Maybe he underpriced his boats, anyway he was a better fitter than a business man it seems.

Knowledge of the risks to my money when placing an order led me ask enough questions to ensure I was happy with the financials of my builder and I checked that they had paid the shell builder when I released the cash at that stage payment. That is something everyone should do who is contemplating placing an order.

The other tip I would offer is that if they have a bigger premesis than it appears they need to build 2 boats consecutively or more than 5 staff for a small firm producing 6 boats per year for a sale price of £55k to £65k then they are covering their costs, creating employemt for themselves but are not going to retire on the proceeds any time soon. If something goes wrong such as a hike in the business rate or a loss of a couple of orders unless they can cut costs they are going to turn a small profit into break even or possibly a loss

 

Charles

[Amicus]

I’ve yet to see any mention of insuring against a yard going queer. Shirly a policy would be available?

[anhar]

I’ve yet to see any mention of insuring against a yard going queer. Shirly a policy would be available?

I suspect the premiums would be unacceptably high for such cover so it is not viable. The risks of a firm going under are quite high because they are mainly very small businesses without a great deal of resources.

 

regards

Steve

[Jon]

Ok guys, this has wondered way off topic and the irrelvants posts removed. Keep arguments about personal circumstances in private.

 

Thank you.

[John Wood]

It was indeed a 'treading carefully' situation as Gary suggests, but nothing to do with advertising - in fact, all three magazines' advertising departments will try to turn away ads from any company where they have reasonable evidence that there are problems. Rather, I believe that the decision not to publish was because Tony Walker hadn't formally been declared bankrupt, so there could have been libel issues. (It was slightly before my 'watch' began, so I may have the wrong understanding here.)

 

December will be my first issue as editor and I will probably take a different view on such things.

 

Meanwhile, if anyone hears of Tony Walker starting up again under a different name, do let me know.

 

Richard

 

I am one of the people who have lost money to Tony Walker. In my case £25700, and have nothing to show for it. Yes I had what I thought was a BMF contract, but not being a legal expert did not realise that it had been altered to make payments at the beginning of a stage and not the end. My shell was ordered and built by Jonathan Wilson. It is now finished and in his yard. Unfortunately Tony Walker had not paid for it. He even had the cheek to ask me for another £10000 to release the hull. It was by then I realised that something was wrong, and refused to give him any extra money.

Other people did not do any better. There were 5 unfinished boats in his yard, some which were only, a painted hull with an engine. These people had paid amounts between £61000 and £71000. Two of these customers had had Tony Walker checked out before placing their order.

In the period 10th June to 10th August Tony Walker collected in cheques from his customers to the total of £75000. We have asked the receiver to find out where this has gone.

Hindsight is a wonderfull thing. I would certainly advise anyone considering having a boat built, where the hull is built by another party, to pay your money directly to the shell builder when its finished, and not to the boat fitter.

Hugh Potter of Waterways World was in full knowledge of the situation regarding Tony Walker. ( I spoke to him on the phone just after it had happened ) He told me that TW allegedly owes money to WW for advertising. It would be very difficult for WW to run a story regarding Tony Walker, as WaterwaysWorld is a potential creditor.

I think it is time for the BMF to have a look at their contract and see if it can be reworked to give the customer a better degree of protection.

I know it should be buyer be aware, but we spent months going round boatbuilders, and had no reason to think that there would ever be a problem with Tony Walker. His cabinet making is second to none. His business skills equate to Zero.

I went to see him just after he went bankrupt, he looked me straight in the face and told me he could start building narrow boats again if he wanted to. I had to leave as I dont think I would have been responsible for my actions if I had stayed there.

My only hope is that if anything comes out of this sorry mess, it will be Anthony M Walker going to prison if he has been found to have committed fraud.

John Wood

[Gary Stacey]

Hi John I see you found the forum then!

 

Gary