BWML For Sale

[Tim Lewis]

CRT Press Release

1 March 2018

 

TRUST TO EXPLORE SALE OF BWML

 

The Canal & River Trust is exploring a potential sale of its wholly-owned marina subsidiary, BWML, and has engaged specialist agents to market the opportunity to investors.

 

Stuart Mills, chief investment officer at the Canal & River Trust, says: “BWML is performing well and we believe its prospects for future growth are good. Following a review, and several informal approaches, we have decided to explore interest among potential purchasers. 

 

“Subject to our securing the right price we believe that selling the business could help inject further private sector investment into the business and waterway network in general.  The Trust would invest any proceeds in other income-generating assets to support our core work of caring for the nation’s canals and rivers.”

 

There will be no changes to BWML’s current operation during the process and the Trust and BWML management are confident that business will continue as usual in the event of a change of ownership.

 

BWML operates 18 marinas across England representing 5.8% of the inland marina market and 0.8% of the coastal marina market.

 

The opportunity is being marketed through BDO LLP and Vail Williams.  For investment enquiries contact Helen O’Kane at BDO LLP or Ian Froome at Vail Williams.

 

ENDS

 

For further media requests please contact: Jonathan Ludford 07747 897783

Jonathan.ludford@canalrivertrust.org.uk

 

Notes to editors:

 

About BWML

Set up in 2004, BWML is as an arm’s length subsidiary of the Canal & River Trust.  Originally set up with ten marinas BWML now operates 18 marinas across England:

• 3 coastal, 15 inland (of which 4 are on river navigations, including some outside the Trust’s navigations)

• 17 ‘Gold Anchor’ accredited by The Yacht Harbour Association

• 2,520 berths in total of which 28% (699) are residential

• Statutory reported income in 2016/7 = £8.1m

 

 

Tim

[Athy]

So it's losing money, then?

[NB Lola]

Difficult to say without details of expenditure, capital and revenue.  I am sure someone on here has the figures.

[Athy]

1 minute ago, NB Lola said:

Difficult to say without details of expenditure, capital and revenue.  I am sure someone on here has the figures.

If you own a business and it's making money for you, why on earth would you sell it, unless you intend to retire, which they obviously don't?

[matty40s]

Just watch,  Waterside Moorings will be next.

[Guest]

1 minute ago, matty40s said:

Just watch,  Waterside Moorings will be next.

Just said exactly the same on 'the other channel'.

I wouldn't be surprised at all.

[NB Lola]

5 minutes ago, Athy said:

If you own a business and it's making money for you, why on earth would you sell it, unless you intend to retire, which they obviously don't?

Raise funds to shore up rest of the mess as govt subsidy drops

[Alan de Enfield]

Someone has probably realised that they are going to have to pay back the £150 million loan so they will need some cash. Its not going to be a quick sale.

 

BWML have always been reported as making a profit, but as with many 'multi-tentacled' companies the true figures are lost within 'management charges' etc. So who knows ?

[Athy]

Just now, NB Lola said:

Raise funds to shore up rest of the mess as govt subsidy drops

But a profitable business IS raising funds, that's exactly my point. It would be short-sighted indeed to sell the marinas, as CART would then be deprived of future income and would end up poorer, not richer, than before.

I'm not an accountant, except once a year when filling in my tax return, but that makes sense to me.

[Alan de Enfield]

5 minutes ago, Athy said:

I'm not an accountant.................

A steady income is all well and good, until you suddenly need a huge lump of capital to either repay a loan, or start some new major development.

I suppose its along the lines of those folks who took out an endowment mortgage, but when the mortgage capital repayment became due and the 'endowment' did not cover it they had to sell the house.

[BEngo]

Selling BWML has several attractions for CRT:

BWML's return on capital is poor and  CRT believe that investing the sale proceeds in commercial property will produce a better return in the same way that they expect to get a return on their bond sales.

Selling BWML gets the private marinas off their back for 'unfair competition'.

Running BWML is not core to being the waterways custodian and selling it removes a management distraction / removes a tempting target for the vultures when it all goes pear shaped in a few years.

N

 

 

[Tanglewood]

10 minutes ago, Athy said:

But a profitable business IS raising funds, that's exactly my point. It would be short-sighted indeed to sell the marinas, as CART would then be deprived of future income and would end up poorer, not richer, than before.

I'm not an accountant, except once a year when filling in my tax return, but that makes sense to me.

Not necessarily,  without seeing all the figures we don't know how much profit has gone back in, but someone will have worked out that the 14% NAA or whatever other figure is negotiated, for doing nothing (by nothing I mean for getting shot of  the hassle of even having an arm's length subsidiary) may well be more profitable.  

 

 

[Athy]

1 minute ago, Alan de Enfield said:

A steady income is all well and good, until you suddenly need a huge lump of capital to either repay a loan, or start some new major development.

I suppose its along the lines of those folks who took out an endowment mortgage, but when the mortgage capital repayment became due and the 'endowment' did not cover it they had to sell the house.

Your analogy is a quite good one - though probably no one was caught out by endowment policies which under-performed, as they were warned several years in advance so that they had plenty of opportunity to save up to cover the shortfall.  

Major new development? But the canals are there already, and the bits which aren't are being put back by preservation societies, so I don't think that applies.

[Alan de Enfield]

3 minutes ago, Athy said:

Major new development? But the canals are there already, and the bits which aren't are being put back by preservation societies, so I don't think that applies.

Office blocks, Pubs (lets try it again shall we), cycle tracks, newt farms, the list is endless.

[NB Lola]

1 hour ago, Athy said:

But a profitable business IS raising funds, that's exactly my point. It would be short-sighted indeed to sell the marinas, as CART would then be deprived of future income and would end up poorer, not richer, than before.

I'm not an accountant, except once a year when filling in my tax return, but that makes sense to me.

Oh I quite agree, shortsighted.  

[Athy]

46 minutes ago, NB Lola said:

Oh I quite agree, shortsighted.  

Ah, I have converted you! You appeared to be in favour of the plan earlier in the thread.

So, who will persuade CART not to sell their marinas? I don't suppose that the Government has any say in their policies any more.

[Alan de Enfield]

6 minutes ago, Athy said:

I don't suppose that the Government has any say in their policies any more.

Yes they do - Asset sales will need Government approval - although could it be argued that the Marinas are assets of a separate limited company (BWML) which is a trading division of C&RT ?

Tricky - where's Nigel when you want him ?

[TheBiscuits]

Also depends if they are selling the marinas or keeping them and leasing them when they sell the business.

[b0atman]

Marinas are gold mines when run properly .Also they can increase in value

.Chck out Lock keepers cottages some on zoopla where sold for £60 k now sell at £400k+

[NB Lola]

1 hour ago, Athy said:

Ah, I have converted you! You appeared to be in favour of the plan earlier in the thread.

So, who will persuade CART not to sell their marinas? I don't suppose that the Government has any say in their policies any more.

Not at all, just not enough information upon which to come to a view.  If the business is profitable and if  5 year projections maintain this view then CRT are barmy to be selling given their budget position unless there is no other option which is still barmy. Catch 22?

[BEngo]

15 hours ago, NB Lola said:

Not at all, just not enough information upon which to come to a view.  If the business is profitable and if  5 year projections maintain this view then CRT are barmy to be selling given their budget position unless there is no other option which is still barmy. Catch 22?

BWML are widely known in the marina business to be making a poor return on their capital.  So, let us say the business is worth £50m  and produces an income to CART of  £1m a year.  That might well continue for the next 5 years.  It is unlikely to produce much more money because BWML have been trying unsuccessfully to make bigger returns, through  buying marinas to spread their overhead wider and other initiatives.  CRT's property department are quite successful and their view will be that if CART sell BWML they can then invest the £50m  in offices and stuff and that will make more than £ 1m a year in profit.  If that is the case then CRT would be silly to keep an underperforming asset which it has failed to turn round.

This is the same principle, born of the realisation that the charitable public won't cough up enough money to make CART viable in the long term without a big Guvmint  grant or other income ,  that led CART to borrow £150m to invest in property.  They think they can make enough income to pay the interest on the bonds  and have something left over to support CRT's other activities.  When the bonds need repaying they will probably just issue some more  to pay off the old ones, or if interest rates are high, sell off some of  property they bought with the money raised by the bonds.    With luck the capital value of the property will also have gone up/been inflated so they won't need to sell everything they bought with the bond money. This is pretty standard corporate finance.

N

[Athy]

If I had a business which was making me a million pounds profit per year, I wouldn't be selling it.

Mind you, I probably wouldn't be living in Norfolk either.

[Movin' on]

20 hours ago, Athy said:

If you own a business and it's making money for you, why on earth would you sell it, unless you intend to retire, which they obviously don't?

Don't be so sure Richard has got to make sure there is enough for his pay off when the EA merger happens!

 

20 hours ago, Tim Lewis said:

 

“Subject to our securing the right price we believe that selling the business could help inject further private sector investment into the business and waterway network in general.  The Trust would invest any proceeds in other income-generating assets to support our core work of caring for the nation’s canals and rivers.”

 

 

At least the cyclists will be happy - more manicured towpaths with waterside vegetation for them to use - bet we won't see any of it

Edited March 2, 2018 by Halsey

[LadyG]

Exactly what income generating  investments can they be thinking of? If they can't run a group of marinas profitably, what hope is there for anything else?

If they can generate profits from a group of marinas, why are they selling them as a group. Just sell the ones which perform worst.

What private investment? Who wants to provide the CRT with spending money?

Its the usual nonsense, having appointed some "high flyer" , he has to justify his ridiculous salary with "innovative ideas" , "sea changes" "blue water thinking" [yawn]

madness.

Edited March 2, 2018 by LadyG

[Victor Vectis]

1 minute ago, LadyG said:

Exactly what income generating  investments can they be thinking of?

Perhaps they could buy a few pubs?