West Somerset Railway General Discussion

The latest Letter from the Chairman issued today does mention the appeal, but gives no update on the current total, stating merely "...We still need regular donations to this campaign, and these can be made to the plc direct, or through the WSRA or the WSRH.....".

I'm puzzled tho' by a comment therein that "Income in June was boosted by works we completed on the Seaward Way Level Crossing of £25,955..." How did they come to be paid for work on the crossing?

 

Is there a link to this letter please?

 

Maybe, as the cost of the works is the responsibility of the County Council, the WSR did some work under contract to the Council for which payment was received?

 

I did consider that possibility. But if that was income to cover the cost of work done, then IMHO as a layman in such matters it does not really represent any extra money on the coffers.

 

I quite agree. But if future energy savings are going into the pot, why not this?

 

Basically the WSR are funding their own funding appeal. <BJ>

 

I guess that when things are going badly you will big up anything you can. It is rather like a football manager after a humiliating defeat praising how many miles their side ran during the match.

Its clutching at straws.

 

If the WSR is actually the appointed contractor or consultant (I don’t know if they are) then they’re entitled to make a profit from the deal as would any other company working for the Council.

 

To be fair, he was talking about income: "Income in June was boosted by works we completed on the Seaward Way Level Crossing of £25,955..." Money from the council is definitely income, although not necessarily profit.

 

Question...........

The Directors have to satisfy themselves that any business remains a going concern.

Presumably in the WSR's case the proceeds of the appeal are needed to ensure the PLC is still viable

BUT what happens if the appeal does not perform as expected/hoped?

 

More of the smoke and mirrors that they're good at?

 

Question - has the Plc Board actually yet defined the criteria by which they will judge whether the appeal is actually 'on target' and likely to be a success (give or take a margin for error)?

 

Whilst its the Directors who have to satisfy themselves on that point they also have to convince the company's auditors that their conclusion is well founded. I'll defer to the accountants on here but my understanding is that, if not being a going concern means insolvency appears likely, then the duty of the directors changes to one of running the business in the best interests of its creditors i.e so creditors recover as much as possible if the company fails.

I confess to not having understood the logic of an appeal that seemed to suggest insolvency might follow if the appeal is unsuccessful. It's hardly the most compelling inducement to contribute if donations are insufficient and end up benefitting creditors.

 

Indeed they did, but IIRC they did not specify the required date by which they wanted to reach that interim target.

 

The autumn steam gala should bring in a much needed income boost.

 

There's quite a few posts looking at the future WSR PLC financial wellbeing. None of us have seen the post COVID-19 accounts which aren't due until 30th September, and even then they won't cover the period from 31st March 2021, so so much is and will be speculative. From what we know and looking at March 2020 (last accounts) to March 2022 (getting through next winter):

WSR PLC burns spends £150k a month we're told, so ~ £3.6m March 2020 to March 2022 (2019/20 annual turnover was £2.8m so £150k pm after cost savings is not far off?)

Against that cash in March 2020 was £450k. It had grants/awards of £865k, a Covid appeal of ~£312k , some share sales (mostly in the Covid fund total), it gets other income (e.g. bequests) which amounted to around £500k in the previous 2 years - so £2.1m in total? Added to that will be its Christmas 2020 and its 2021 trading income and so a good 2021 autumn steam gala, lights and Santas would go a long way to filling the gap.

In March 2020 its net current assets were £500k (from being a negative in 2019).

So not rosy but if the appeal does not perform as expected/hoped it still had rolling stock with a net book value of £1.14m against its borrowings of ~£330k - so it could raise more cash by selling or mortgaging it, and still have a positive net asset figure.

I know only what's published but the PLC's more recent comment that failure to reach the 2021 appeal target would mean money would need 'to be raised by grants or other commercial means' sounds about right to me.

That doesn't change what the PLC, @Lineisclear and lots of others have said about long term funding

Patrick
(A huge caveat that no-one can rely on this as financial advice!)

 

I thought most of the rolling stock/locos were already mortgaged?

 

IIRC two Mk 1s to the WSRA and a manor on a finance agreement which was due to have been paid off (always assuming it hasn't been suspended/deferred/rescheduled due to Covid, as have others' loans)

The next accounts (for all lines) will be instructive

Patrick