Llangollen Railway

Is one financial lesson or possibly a point for the auditors that advance payment for such items as dining trains, driver experiences and santa trains should be deposited into a client type account that can only be drawn down when the "service / product" has been "enjoyed/taken"?

Yes there are cash flow implications but should HRs be using todays takings to pay accounts now due? I know this can be quite common practice for small businesses but .......

 

That might be the conclusion, though I suspect the FDs of many railways might balk at the implications, at least in the short-medium term.


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Agreed, and would require supporters of heritage railways to provide increased working capital - significant sums too, the SVR's 2020 COVID-19 inflated prepayments were £368k in the accounts.

In addition, railways also fund up front some necessary event outgoings which they wouldn't be able to offset against the deposits held: depending on the terms of trade that might include licenses for the Polar Express or Thomas, lighting for Steam in Lights, mince pies and beer, locomotive hire and transport fees etc.

In practice, the increased protection would mainly benefit credit card companies.

Patrick

 

Accounts in escrow are the law for landlords up here. Yes they're a bit of admin nightmare but it's better than getting 1/4 of money back because you're far down the list of creditors.

 

That’s fair, but doesn’t address the issue of the working capital required to deliver something being unavailable until after it’s been done. That’s more than just admin.


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You're not wrong there but in the case of say dining, most companies have a period in which to pay. My suppliers generally are on 28 day payments because it isn't necessarily being sold as soon as it arrives. And for driving courses, the costs are broadly staffing costs as well which aren't required till whenever they pay period ends. Coal, I don't know on that one. I'm not suggesting it's held in escrow for weeks after the fact.

 

As you say, the estimated £225K cost of administration is a hefty sum, which eats deeply into the sums that would otherwise be available to creditors or to the railway. Although "secured" and "preferential" creditors are expected to be repaid in full, "unsecured" creditors are forecast to get only 22% repayment (£188K out of £862K). Administrators do not come cheap, nor do the lawyers, valuers and other specialists involved.

Engineering claims of £450K amount to more than half of the unsecured creditor total. They are not broken-down in this latest report but have escalated significantly from the amounts quoted in the Administrators' earlier reports (which were £120K for SRPS, £100K for Patriot, £50K for 3814 & £9K for 4709).

The blindingly obvious lesson is the overriding importance of heritage railways not getting into insolvency, but of course this particular situation seems to be mainly the collapse of the engineering business. I don't think there has been a full account of what went wrong, but the 2019 Annual Report & Accounts stated "a substantial loss due to two contracts being massively under-quoted".

It must have been gut-wrenching for Llangollen Railway workers & supporters to have seen so much of their labour and donations go up in smoke. So all the more credit to them for getting the railway back up and running.

 

Recent footage (not mine) of progress at Corwen station:

 

That car park sure looks handy for the station and town.

Those giant RSJs on top of the cast iron columns don't like right. Too brutal. Look under any GWR canopy and you don't see something like that. It would have been a latticework of purlins.
Our builder at Broadway planned two RSJs like that for the last part of the canopy we are building, and we managed to avert that idea. Also the box section steel trusses he had in mind
We were told 'people don't look up'.

 

The new Corwen station is actually in a very good position for the town, far better than the original station. Even if the original became available, this one is far better positioned with museum, car park and access to the town center. It also avoids the expense of putting in a missing bridge, which you would likely not get permission to reinstate anyway as it would be very low, and lowering the road would create a problem with flooding.

The continued development of Corwen is a remarkable achievement in the current climate.

 

The line wasn't built by the GWR or indeed by the Cambrian from which the GWR took it over, whereas the origin of Broadway justifies the purist GWR approach, arguably the Llangollen heritage should involve variation from pure GWR.

 

Smart of them to start work on the turntable to the left of the Signal box…



Simon

 

It's funny you should say that.
In a similar fashion there are 4 old sewage/water treatment tanks just south Feltham Marshalling Yards that are listed on Pokemon Go as Turntables

 

Years ago, a colleague on the Mid Hants PW, the late Chris Bitton (Old Mother Goose), commented that on every railtour it seemed to be a tour of sewage farms as so many were sited beside railways.
Pat

 

Most railways get comments about installing 2 Turntables, 1 at each end of their line.
Is it easier to build 2 side by side then move them at a later date?

 

Funny I also thought that birdwatchers were the ones that favoured sewage farms. Certainly the wife and myself have been to a few around the world including (pre 9/11) ones where in true US style you could drive around and bird from the comfort of your hire car.

 

Does that include the pits Bryan ?

Bob.

 

For a GW man I would have thought Flush deck.

 

They still have pits !

Bob.