Severn Valley Railway to launch £4,000,000 share issue.

SVR Holdings plc is to launch a share issue in 2012 to raise £4 million. The Business Plan announcing it can be downloaded here http://www.svr-association.org.uk/NB - business plan_strategic review 2011-2013.pdf . The proposed issue can be found on Page 2, along with some very worthy promises to run the business properly in the future, which will doubtless give comfort to the existing shareholders who will have to give consent for their existing investment to be diluted by 50%.

Nice timing, with the economy in the toilet, passenger numbers in the doldrums, and two consecutive years of operating losses under their belts.

Good luck with that.

 

A bit disappointing to see the creeping use of 'management speak', for example:

"Re-engaging shareholders"
"strands" and business plans will be "delivered"
"Management given targets for volunteer engagement"
"Take the railway forward into the future"
I quote.
It was to escape this sort of jargon that I took early retirement. Our senior management made life for staff increasingly unpleasant and when they realised that something was amiss with morale, they started setting targets for middle management for 'employee engagement'. How on earth do you measure happiness? Well, they thought they could .
I'm not saying the SVR have a problem with morale (I hardly know them) but this language....

 

Is it me or do others think that it is poorly written and badly put together? In the first few pages there are such gems as:
'We need to Strengthen Our financial base to allow the SVR to invest further in buildings, track, improvements to facilities like the buffets at Bewdley and Bridgnorth.'
and
'You will also notice that there are in the strands that there are common denominators:
Communication - amongst the dispirate workforce will be improved.'

If it is intended to impress influencial people, it is likely to do the opposite. At least it only appears to be a draft and not the final version. Even so, I would have expected the grammar to be sorted out well before this stage.

 

Totally agree, Steve. It needs re-writing.

 

Erm, it's "influential" not "influencial" by the way. So if we're going to criticise the grammar of others..................

 

Fair cop, Guv! And I read it several times before posting, too!

 

Good news, glad to hear it, it offers enthusiasts an oppertunity to be a part owner of the railway, and there are benefits to wning shares which increase the more you own. The world would be great if we didn't have to do such things, but I shall be adding to the couple of hundred I already have.

 

it needs re-signalling too!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:dance:
regards
noel

 

The original poster does not offer his or her alternative solution for taking the SVR foreward as one of our leading Heritage railways, and a major tourist venue in the West Midlands, which devalues the criticism of this proposed share issue. Please let us hear your solution to the increasingly expensive business of running an aged railway with aged steam motive power. ( half a million is a realistic figure for a ten year heavy general overhaul)
Running the actual trains is at best a maginal exercise cost-wise, as other posters on the forum connected with other Heritage lines will no doubt confirm, and salvation (or continuing in business....) very much depends on other activities, ie Santa operations, driving experience courses, dining facilities etc, so in my opinion it is both desirable to have good business managers with experience from the commercial world, and to have an adequate capital base from which to fund repairs maintenance and improvements along the way. The OP should appreciate that share investors in Heritage lines tend to invest their money for altruistic reasons, ie the continued wellbeing of their favourite line, and NOT for a financial gain on the investment.
The OP points out that next year might not be a good time for a share issue, but we dont live in that sort of World any more. What do they do otherwise? Continue to defer steam overhauls and increasingly go diesel? Defer line maintenance and contract to a shorter route? We are indeed fortunate that the SVR survived the disaster of the floods of 2007, we could easily be looking at a line only running between Kidderminster and Bewdley now.
Indeed I suspect that getting the business properly capitalised and with a foreward plan is taking shape now because the line has only relatively recently finally shaken off the debts and borrowing incurred rebuilding the SVR from the damage of the 2007 storm.

I for one hope the share issue is succesful, and the SVR can continue on as one of our leading steam Heritage railway operations.

 

SVR Fundraising initiatives have always been successful to date, so this one might be expected to be as well, but in the past they've had a defined project as their aim. It will be interesting to see how well supported a broad capital raising offer will be. Less so, I suspect - partly for the reasons given, and partly because of the sum sought.

 

I any case it will be better thna the last Bluebell share issue which had been a true "flop"!:deadhorse:
regards
Noel

 

Why? as others have said this is not a business in which the existing shareholders have invested to see returnd on their money. Exisiting shareholder rights will be set out in the company documents, these will not normally prohibit the issuing of new shares although it may give the exisiting shars holders the right to invest in the new shares

So best to wait until it fails then?

 

This seems to be a good way to generate capital for the SVR. Maybe a few other railways will need to go down this road soon to avoid running out of funds. The world doesn’t own a preserved railway a living. Could we see one or two of the small preserved lines fail with in the next few years or even one of the larger preserved lines could fail?

 

A bit of working capital can go an awfully long way, especially now that, from a Business perspective, the SVR seems to be at a watershed point. I wish the railway every success in raising the funds, and may consider putting some of my money into it if I am in a position so to do when the time comes.

 

This does seem like a pretty awful time to be launching a share issue. Everybody is watching spending. The recent Churnet Valley share issue was aiming for £450,000 by September and stopped pretty much dead in its tracks at £300,000. Still an impressive figure for what is a much smaller operation than the SVR but even so, £4m seems like a very ambitious number. The NYMR are still crawling towards £1m with their Bridge & Wheels appeal. I think the SVR may have to adjust their expectations... maybe aim for £2m and then some match funding or something along those lines.

 

Four milion seems and is an awful lot of money, but it is frightening to think that this appears not to be for a specific project but rather as working capital to maintain and fund the railway. If one of the most succesful railways in the UK needs this sort of funding it does raise concerns for the future of our hobby and for other lines.

 

May I ask where you get that idea from? Trains during the summer were quite well used and the passenger figures I think are up on the budget ones, even if the Budget was very conservative.

 

I have worries about some..............
regards
noel