Lynton and Barnstaple - Operations and Development

Successful organisations have flexibility in their plans, take opportunities, and change plans as necessary.

With the L&B and the complexities and puzzle like nature of the piecing it all back together you cannot say this is how we will do it and that will be what actually happens. I can guarantee there will be many obstacles which will arise and will block what we are trying to do.

The key is not giving up, maybe finding new ways round things, maybe just trying again even the same way but with subtle differences, each situation will be unique.

Step by little step, this railway will be rebuilt.

 

All true, but at what cost? There’s a hell of a lot of money for a relatively small business to earn back before it starts to contribute.


Sent from my iPhone using Tapatalk

 

This is something I don't understand where people say it's not worth what we paid for it.
The house is a private house, worth somewhere around £900k.
The pub, let's say is worth somewhere around £500k - 600k, plus some for the goodwill.
There is a £250k power gen plant which is returning money each year.
Then there is the land that comes with the whole complex.

I come to somewhere near £2million?

 

What is the Power Generating Plant?

 

Let's work on that valuation, though I believe it is on the high side.

Borrowing from post #12578, we know from Companies House filings that there is £1.34m of share capital, and that there are additionally two loans totalling £830k. We are also told that borrowing has fallen by £225k since those filings. Put together, they give a purchase price of approx. £2.2m.

Against that, we have a reported profit figure of £18k for (presumably) LBBC's trading in 2023 - so 8 months. If we assume (implausibly) those profits are evenly spread through the year, that implies a profit of £25k-£30k per year. These aren't formal results, so we should also assume that they are operating profits - i.e. before loans, dividends, etc. We also don't know what these are as a percentage of turnover. This to service over £2m of capital - or in other words, it would take 66 years to earn back the capital invested. Others have made the fair point that the profit may currently be depressed for investment, but I find it hard to believe that these will affect the order of magnitude. We also need to bear in mind that the secured loan, on it's own, requires an operating profit of ~£35k if it is to be paid.

Now, "only" c. £500k of that capital is known to be a Trust stake. Of that, £250k is due to be repaid at £25k/yr - meaning that the other £250k is tied up in the business unless and until either dividends are payable, or the business is sold. If, as appears plausible from what's been reported, the Trust's loan has been converted to shares, that means all £500k is tied up indefinitely - and for a minority stake in the business, where the first call on funding is to the secured loan.

This feels like being told that a new Ferrari is "cheap" at only £250k. It may be, but I have to have £250k spare in order to enjoy it in the first place. Otherwise, it's a luxury of little or no use.

 

I learnt the hard way in my business life to avoid those who absorb energy. There's always another way...turn problems into opportunities....worked for me & my shareholders !

Sent from my SM-T575 using Tapatalk

 

We know how much was paid, £1.8m? That's what's quoted on the website.

We also have money tied up in any property we buy, is it not better to have a property generating income than not at all? There is money tied up at WB, PH, BF, ChM.

I just don't understand all the furore about Blackmoor Station, I am sure that if they hadn't bought it and just bought the trackbed there would be calls of why the station wasn't bought. Why did we miss that opportunity, it's part of the old L&B.. Etc etc.

 

Its a 6 bedroom house and reputed to be rented to the previous owners for £250.00 a month all in, IF this is correct then something is very wrong when the average rent for a house that size in somewhere in the region of £2,500 - £3,250 in the area

 

Interesting since RVR have permission to cross the A21 by a level crossing - had to make a case that there was no alternative. The A21 is a trunk road managed by Highways England.

 

Limited period though, isn't it, part of the deal?

The vendors had them over a barrel. 'Buy a different pub then'..
'No, we want that one' :-(

 

quite simply because the trust paid over the odds in a down turning, unstable market, yes its a pub and 6 bedroom house but it has to service big loans as well, it is only worth what someone will pay for it, The Fox and Goose is proof of that for sure and more closer to home for me The Portsmouth Arms just sold for£220k , thats a big pub with renting rooms and 2 cottages right beside the A377 and a stones throw away from the station of the same name, J.B himself told me the biomass boiler returns £15k per year which isnt much in the big scheme of things

 

How does the Trust have money tied up at BF please?

 

again only by word but 2 years and yes the vendors did have them over a barrel or wait and see what the market dictates

 

EA has money tied up there, but the "we" is the railway as a whole. Any part of this railway ties money up.

 

Trustees who were genuinely concerned about the financial health of the charity would not have squandered cash as the present trustees have on several occasions.
Edit: deleted superfluous word.

 

Precisely, over the last 3 years approximately £13k+ by taking short cuts around trustee nominations and unnecessary disciplinaries and EGMs

 

Yes that would work but for a number of reasons why are they still building steam locos and continuing to build yet more carriages we don't have enough room as it is for what we have? sometimes I wonder if it is a case of cart before the horse?

I could see that it would make sense if we had somewhere away from the railway that could dry store all the extra rolling stock that is either being built or could be acquired at some point right now.

 

The one bit of the Secretary's information that we should be able to rely on (published in 'Trackside' magazine on 8 December last year) is that the turnover of OSHI was £563,000 in the first six months (i.e April to September - the 'high season'). So, say around £800 to £850,000 in a year. I counted four staff when I had lunch there on the day of the EGM - two in the bar and two in the kitchen. So, even if not full time, a presence of four must surely be required most of the time during opening times. And then there is the salary of the Manager. So a significant salary bill. And we know the interest on the secured loan is (or was) set to be £34,600 pa. The debt has been reduced by £225,000 - so either the secured loan has been reduced or the unsecured loan from the Trust (or part of it) with it's commitment to pay £12,500 interest and repay £25,000 per year, has been exchanged for shares. Whichever scenario, that leaves a commitment to pay either £35,000 or £57,000 each year in interest and/or repayments. At the very least the business is going to struggle to pay a modest dividend of, say, 3%, on £1.3m - £40,000 to shareholders, especially if the profit mentioned of £18,000 is the result of the first 8 months. All will become clearer when the Trust's accounts for 2023 are distributed in the next 10 days or so. I worry about the £563,000 that we know about that the Trust has invested in this business with no security in a situation where there is a creditor secured for £580,000.

 

We have somewhere if push came to shove.

 

Not the point though. If the charitable objects will be met with a museum operation on the existing railway then we certainly don’t need more than 1 or 2 Manning Wardles and maybe 6 coaches.

If we are serious about running a longer railway then the trust need to stop behaving like they are running a garden railway.