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

Interesting thoughts, I don't agree with all.

To illustrate your point, what % of the SVR supporting family – the +/- 15,000 existing shareholders and members combined – bought shares this and last time round? I haven't seen but suspect it won't be very different?

The Railway disagrees that survival and a sustainable future comes only from carrying more people: it's said publically it sees higher spend per passenger as the way forward, not carrying extra passengers on discounted fares as it has done in the past.

Passenger numbers have for three years been 205-215k, not critically diminishing. You do however refer to paying passengers - do you have that info? I haven't seen it

A truth IMO is that SVR was a well-managed self-sustaining business until 2007 but by deferring expenditure in areas such as rail, infrastructure and loco overhauls.

Cheers

Patrick

 

Passenger numbers have been in constant decline since 2005,when the railway carried 250,000 paying passengers. That was the tipping point after a decade of steady growth from 180,000 in 1983 (the last year before Kidderminster opened). 230,000 is the de minimis for any sort of cash flow sustainability– and even then it is a wafer thin margin; in 2001 that many people still turned in an operating loss of £30K, but that was also the price paid for the coal yard at Highley, now the Engine House. I think it is important to differentiate between paying and non-paying passengers after the catastrophic flirtation with free child tickets in the peak, which did no one except the parents any good at all and has quietly been dropped this year. 200,000 paid tickets is not enough, if you accept that the fares are set as high as the market will bear.

Yes, the railway did indeed say that it wanted to increase per capita spend in favour of more bums on seats, but it has stubbornly stuck at a tenner and the shops still carry huge amounts of unsold stock. So that hasn’t worked either. 2012 saw a very unambitious (those who wrote it called it “realistic”) decreased target, and even that has been missed - which is a new low point and a surprising one – SVR pays £52,000 per annum for its General Manager, who is a tourism professional rather than a boring old railwayman, and it poses the question of how much we have to pay for one who can actually increase sales.

I don’t know what percentage of the family responded last time, although any shareholder can examine the Register and look it up. The historic response since the ‘83 issue has been pretty consistent – a million a time at today’s prices. The last one to really bomb was the 1978 Rights Issue, which set a target of £200,000 and got £60,000, a big miss and the only one to be as dismal as the current one. That was on the late Bill Broadbent’s watch as Chairman, a very long time ago.

The last big call to the family to unbelt was the Flood Appeal in 2007, which raised £560,000. Since 2008 but before this issue the PLC has sold a further 700,000 shares at face value, without the expense of a formal issue. This indicates that these days the family will without being asked support SVR to the tune of £180,000 per annum. If you deduct this sum (which would have come anyway) and the launch expenses (probably £100,000) from the 2012 issue, you are left with not much – just about enough for the new MPD stores and nothing else.

You are perfectly right that the bow-wave of deferred maintenance started to build up under the previous regime, especially in track renewal. But what a shame it was allowed to get so out of hand that it took a derailment and a very angry HMRI to make anyone notice – and two years on it is still necessary to hire an expensive Class 5 engine from Ian Riley just to handle Santa. Christmas comes but once a year and should not really take MPD by surprise.

 

To me, there are two competing elements for the share issue money raised (...so far). Firstly the General Manager has said, probably rightly, that there is a need to increase "customer spend", so he no doubt hopes the shop/visitor centre building is built. I recall one of our contributors from the NYMR a couple of years ago quoting how many passengers they need on a given train to make the running costs break even. Not "make a profit", just to break even. It was a lot of passengers! However as the poster above highlights you need to maintain and increase basic passenger numbers as well as increasing their "spend".
The competing element is the "forget the fancy new buildings and return to basics" idea. Basics? -thats having an adequate reliable working steam fleet, and permanent way/infrastructure that will allow the running of the train service in future years. In fairness even if it is not fully paid for yet, the repairs and reconstruction that took place after the 2007 washouts has left the line in somewhat better shape, but there is still much to do. Even "modern" structures like the Bridgnorth by-pass bridge need maintaining, as well as some of the much more vulnerable older sandstone structures. Parts of the line require rail replacement, and clean deep ballast does sometimes appear to be the exception rather than the rule. Do the p-way standards contribute to the frequent loco spring problems?
The first project which is getting underway at Bridgnorth will lead to greater works capacity and the ability to have more engines being attended to at any given time. I must admit to being taken aback by the circa £500k cost of this, but I am no expert on building and engineering costs. To my mind this is a good start and a priority. I believe the facility will also improve apprentice training facilities.
Again as others have mentioned grant applications including HLF applications are long and tedious, so I suspect the big new building next to the existing Bridgnorth station building wont materialise any time soon.
It is interesting to note that the architects are going to revisit their designs, and there does appear to be a concensus at least amongst the membership that providing contrasting styles is not the answer. I have spoken to someone who knows about English Heritage's criteria, and it appears quite possible to build new in a matching period style, provided they are not actually attached to an existing listed building, and one does not try and pass off the new as being old. A date stone saying "2014" over the door??

Unless lots more money is raised, either by direct share purchase, or some form of grant funding, then I dont see how these competing interests are satisfied. The traditional running of a reliable steam service over secure p-way and infrastructure, or commercial retail space to increase "customer spend". Maybe we should be appreciative in these difficult times that customers do turn up and our trains are generally well filled, but maybe they just dont have that "extra" money to spend at present? I for one feel that for instance if a family rides the line but brings sandwiches and drinks instead of using our cafe facilities we should still be grateful, very grateful, for their patronage. It is better than them not turning up at all, or going elsewhere to a competing leisure attraction.

46118

 

There is more to fundraising than a binary "share issue or HLF" choice. Again, I come back to the Bluebell example - if I backdate to ca. 2006 (when we had our last big HLF funding, for the Sheffield Park Carriage Shed) then since then we have raised £8 million for capital investment. £3million (or in fact, just under) was from the HLF; about £1 million (or just under) from the share issue, but that means over half the money - more than £4 million, in round figures - came from other sources, mostly individual donations ranging from a few pence to five or six figures in pounds. I don't see why the SVR should be any diferent in what it can raise, either in total or in the split between various sources. But be prepared that raising £10million might take 10 years...

As for the HLF: I'm not an expert in their process, but from what I understand, don't assume that they will fund a "nice shiny shed to keep rotting coaches in just so they can stay rotting for another twenty years" (that's a paraphrase from a comment on our Yahoo group). In other words, capacity building, interpretation, access and other shiny buzzwords is the name of the game. So looking at the range of projects the SVR want to fund, some might be suitable for an HLF bid, but others won't - either because they don't have a strong heritage aspect, or because they are more properly seen as what should really be revenue spend. For example - and again, I'm not an expert - I doubt you'd get HLF money to restore Hagley Hall - not an immediately obvious public benefit from restoring a loco that isn't unique or in any other way particularly interesting (apologies to GW types!). You might get it for Steam Works if you can dress up the interpretation aspects.

So to me, I'd be really surprised if the SVR are really thinking about a one shot, £7million HLF bid - it's simply too high a risk. Instead, you have to think about a range of projects that can be delivered over probably a ten year timescale, as fund raising allows, and accepting that you will need to tap up a variety of sources of which the share issue is one (but not the majority) and the HLF ditto (but also not the majority). One key is packaging the work in discrete units that specific individuals can really buy into: you may for example, find a HNWI who couldn't care less about Hagley Hall but is really passionate about volunteer accommodation, and another who couldn't care about volunteer accommodation, but wants to see Hagley Hall running. That's much easier to manage if you have a sequence of linked projects, rather than a vague call for £10million as a block, and a sense of defeatism that if the share issue fails and the HLF bid doesn't come off, there is nowhere else to look...

Edit: Should add, for the avoidance of doubt, that I am not an SVR member or shareholder, simply an interested onlooker.

Tom

 

A third hand bit of gossip from the SVRA forum, several directors are said to have reported the £1m figure is not yet reached.

EDIT: A note on the forum confirms from last night's board meeting that HR jumped the gun and £1m is not yet reached /EDIT

Jamesaquared - from the boilershop meeting I attended it was reported grants were being sought from four (?) bodies for several different parts of the project, recognising (as did you) some might be suitable for an HLF bid, but others won't - so no single megabid. Also the railway has appointed a team to develop detailed proposals for the interpretation themes to be developed within our new buildings and site wide Steam Works.

Patrick

 

Probably explains the sly cut in members discount from 50% to 35% as well...

 

The members' rate follows the child's rate, which has been increased from 50 to 65%. What I'm trying to say is it's not an increase solely 'aimed' at members. I believe local residents' fares will also increase. Sly I'm not sure about, revised fares are on the website and trailled here and the SVRA forum, and it was in SVR News last week

I think I'm right in saying discounts are available on 'Freedom of the Line' fares if booked five days in advance (£8.50 plus £1 booking fee) BUT these are open dated so you can buy several up front and use them through the year - terms apply, please check, usual caveats.

Remiders please that the SVR runs daily whole line 26 December to 6 Jan, the Black 5 and 42968 (going out of ticket) are due to run and the share offer remains open

Patrick

 

I've never understood people who take members discount. If I visit a railway where Im a member I always waive my discount. Its all part of supporting a railway. Other views exist,I guess.

 

The most recent comment from Tigger would suggest the board are being kept in the dark too.
Draw from that what you will.

 

As someone who is a relative newcomer to the preservation movement I find some of the posts on this topic astounding. What exactly have the SVR done wrong here? Can anyone tell me the last time that a preserved railway raised more than £1 million in 3 months from a share issue? How many other lines have 8 resident locomotives currently in ticket? (yes I know that 34053 is on loan and 42968 is about to come out of service, but even so...) How many other lines carry over 30,000 passengers on Santa Specials? How many others have had over 6,000 people attend a three day gala and 200,000 passengers this year?

Times are tough. Passenger figures are down at most (though not all) major preserved lines. Only the Bodmin and Wenford is significantly bucking the trend. And undoubtedly the SVR's motive power situation has not been ideal - but then many other lines are in the same position. I visited the NYMR earlier this year and found two diesels operating in a supposedly all-steam timetable. The Bluebell has been so restricted that it hasn't been able to run a single gala this year. Other than the Great Central and (maybe) the Llangollen I can't think of many that are exactly flush with engines. The ELR has had only one ex-main line steam locomotive in service for much of the year.

If you really think that the SVR are doing things so badly wrong (and in my view the figures raised really do not establish this to be the case) then please set out your remedy - to us or more appropriately the railway. Aren't we supposed to be a proactive movement?

 

There has been no mention of cost cutting maybe reduce number of trains run midweek off peak or substituting the dmu for steam loco.
They need to get back to operating at a surplus this may sound obvious but you can not keep coming to people for more money each year share issues appeals.
The hagley Hall situation needs to be sorted out if the share issue does not create all the money needed for the overhaul it may be best to sell the loco to the friends of hagley hall giving it away would not look good while apealing for money or if applying for funding from other sources.

 

No great surprise surely? Four of the attendees at Holdings Board Meetings - Chairman, Vice-Chairman, General Manager and Company Secretary – all know to the penny how much they have banked from the share issue on a daily basis. Those four gentlemen together regard themselves as permanently quorate regardless of how many of the “semi-detached” Directors turn up, so why tell the others anything..they will only go and broadcast it to the unwashed in the Railwayman’s Arms...and we all know what happens when you do that.

The only really disturbing thing is that the Operations and Safety Directors are apparently among the “semi-detached”. They really should be taken a bit more seriously than that.

 

Perhaps slightly mis-quoting; but quite simply - scientia potentia est. And they ain't gonna start sharing either unless they are forced to.

 

Rejoice!

Home

SVR-Online Forum :: View topic - Share Issue

"For further detail on the Share Offer, please refer to the Share Offer document on svr.co.uk/shareoffer
Thank you for your on-going support with this scheme.

Nick Ralls
General Manager"

Now for the next million!

Patrick

 

This wasn't really my point. What I was trying to put across was a sense that purchasing a membership was something that was valued by the SVR, and the members discount was a way of them showing that. Cutting the discount seems to show a disregard to the SVR faithful, and I fail to see how the Valley aims to encourage new members based on this. You may waive your discount, and that is certainly very generous, but I know from reading the SVR forum on this topic that this discount may essentially decide whether members spend money on other facilities at the railway - which is surely a sizeable aim of the share issue, given the size of the proposed restaurant.

IIRC, it was one line in the News, which I happened to skip over and only found out through the various complaints on the SVR Online site. I imagine a reasonable chunk of members and shareholders do not really use computers much (or have access to them), so this may be the only time they would see this. I think a letter enclosed in each copy explaining the situation would probably have been sufficient.

 

Depends how far people are coming to visit a railway and the discount can be seen as an incentive for people to join. I'm sure most (if not all) railways would see it as better some money than none.

 

You would think so. I travel on the SVR maybe 4 or 5 days a year. I have the option of travelling free every time through a reciprocal agreement with a railway I volunteer but I prefer to use my membership card to, at least, put some money into the railway. The membership discount is the reward I look for as a result of my membership and support for the line. If you chip it away so that it's meaningless then what's the point in being a member? I spend more money in the shop each year than my membership is worth (my lineside permit is worth more too although I have to be a member to get it) so it's not a case of that I don't want to support the SVR but I'd like something back for my support other than a feeling of goodwill.

 

I think we can see from all posters in this thread that although they have differing viewpoints on the share offer, building designs, members discounts etc., that they all have the SVRs best interests at heart, which is very encouraging.

What is also clear to me is that the share issue team either jumped the gun in going ahead with the offer (which is now clearly not what the majority of would be investors and/or members wish to see as the main focus of the funds raised, despite whatever spin the SVR team care to put on it) or were too wrapped up in their own views as to think that the building designs were acceptable. However, whichever of these is the case at least the SVR have positively and maturely realised the strength of feeling and are in the process of undertaking a review, the outcome of which will be known in the next month or two I believe.

There does however seem to be a positive spin being put on the share issue by those who are immediately connected with it. This is not helped by the void of silence that has now been imposed, as that inevitably leads to speculation and a questioning of the motives behind it. It would have been far better to be open with us the interested enthusiast public on a continuous basis - don’t shut down sources of information on the building design, say that we are going away to work on how we can introduce a railway character to the buildings, say that our professional advisors got their brief wrong and didn’t understand the heritage aspect and how this could be negated by simple measures such as date stone (and although I’m no expert on this if that is the case I would advise getting in another set of advisors if the original ones were so wrong in their understanding of the rules), don’t stop the regular share sale updates. All the silence does is to make interested parties feel that there is something to hide.

The above communication issues seem symptomatic of a problem with the SVR who have recently vowed to open up communication, with regard to the share issue they haven’t done this at all, and with regard to the membership discount being eroded to add it as a ‘one liner’ in the middle of an article seems to me as if they were trying to hide the fact. It’s all well and good involving twitter and facebook as communication means but to, and I will generalise here so bear with me, most people over the age of 40 (certainly 50) these channels do not register and have no interest - I would hazard that the majority of SVR members and shareholders fall into this group. As simple loose leaf insert, or a separate headlined article, in the magazine to communicate the reduction in benefits would have been far more beneficial, together with a paragraph or two to provide justification and rationale behind the decision.

As regards the total funding package the SVR does seem to be putting all its eggs in the same basket and pinning its hopes on substantial HLF and matched funding. All well and good if things work out, but surely a dangerous policy. I would like to know how much effort has been put into obtaining, as per the Bluebell seems to do in the excellent posts from Jamesquared, donation funding from individuals, and also how much funding is/could be raised from ongoing purchases of existing shares (I’m a small SVR shareholder and did not know that this was possible, I have been waiting for this share sale scheme to top up my holding – again a lack of communication).

Have to agree that the railway has been surviving in a precarious position since 2007, but I’m not sure that the way to go in these current times is to squeeze and squeeze every penny from loyal supporters and the general public, without cutting your own cloth accordingly. On a personal level although we visit the SVR as a family we don’t do so as often as a few years ago, the reduction in member discount will reduce that further, yes we now take a picnic instead of visiting the buffet (or more likely the pub) for a meal, but with the increases in the cost of living far outstripping salary increases then in order for us to have a family day out then we have to curtail spend in other areas during the day, such as the aforementioned picnic or parking for free a distance away from where the attraction is. Perhaps in this case the SVR just needs to do as the public are being forced to do and batten down the hatches in order to survive the current lengthy downturn. Putting up fares and reducing discounts will ultimately have a negative effect on passenger numbers.
I’m not sure in which way the SVR, or preservation in general for that matter, is heading, but my gut I feel is that it’s going too far down the commercial route, and that for a large number of reasons some of which are highlighted above it runs the risk of alienating its loyal supporters. I am a small shareholder but haven’t as yet supported this offer, I have also so far not renewed my membership (which expired at the end of Sept) as I’m not sure I know or agree what direction the railway is taking, and don’t know if the membership offers me value for money anymore.

 

OK, news time

Severn Valley Railway steaming past £1m mark in shares offer « Shropshire Star reports over £400k of the £1m has come from new shareholders. Good, IMO

SVR-Online Forum :: View topic - Share Issue TO DATE (20/12/12) - THE TOTAL OF SHARES IS £1,007,683 (their capitals). AIUI to get maximum impact from the press the railway wanted them to find out via a press release sent to all press contacts at the same time. As soon as the release went information as circulated to the railway and regular updates have resumed.

A Noticeboard Issue "Thank You 2012" is at SVR-Online Forum :: View topic - Thank You 2012. Note comments on a profit in 2012, a budgeted profit for 2013 and Holdings Board Monthly Updates which will summarise work in progress and decisions made by the Board and management of the Railway. Good communication IMO

Also note the problems with 7714. I'll crosspost that to the SVR Newsey News thread in a minute

Patrick