Railways, structures, fundraising and democracy...

These thoughts have come out of comments about the above in the SVR and WSR threads, amongst other places, but rather than sidetrack those discussions, thought it would be worth having a more general discussion.

So, what structures are out there, what works, and what doesn't? What are the pros and cons of different models?

It strikes me, that in an "ideal" structure, you would achieve the following (not necessarily listed in order of importance):

- Be able to operate trains, but separate commercial risk of failure from ownership of assets (so if the operating body goes belly up, it isn't a simple matter for someone to gain control of the company in receivership and thereby its assets, which have largely acquired their value due to volunteer input)

- Maximise flexibility of fundraising and be able to take advantage of tax breaks, for example, collecting gift aid.

- Ensure that the ultimate seat of democratic power is the membership.

As an example in action, at the Bluebell we have a membership body (the Bluebell Railway Preservation Society) which is about 10,500 strong. There is a commercial company (Bluebell Railway PLC) which runs the trains, but is (by design) majority owned by the BRPS - the current shareholding is around 72%. And we have a charitable body (the Bluebell Railway Trust) which can solicit donations and reclaim Gift Aid. That structure seems to work OK, but has certain in-built problems: for example, the Trust can only fundraise for activities within its charitable remit (so it is awkward, for example, to use the Trust to raise money for what are basically maintenance activities). Whereas the PLC can raise money to spend on any project it sees fit, but because the Society has to maintain a majority shareholding, it limits how much capital the PLC can raise at any one time: essentially, for every £1million of new shares issue by the PLC, ultimately the BRPS will need to buy £750k or so from member's subscriptions that would have been raised anyway to maintain its overall majority shareholding, so only about £250k would be genuinely new money. I note from the SVR thread that the membership body doesn't have a majority shareholding in the commercial company - which makes it easier to attract new money via share issues, but at the risk that the membership loses democratic control, at least in theory.

So, is there an ideal? What do other railways do? And how do you square the circle between the desire of the membership to work on "interesting" projects (extensions, exotic loco and carriage restorations etc) and the need to also run a basic, cost-effective railway? How do you avoid the tensions where, say, the more commercially minded departments want to lay CWR and concrete sleepers and colour light signals because it reduces what would otherwise be a staggeringly big maintenance bill, and the more heritage-minded members want bullhead, wooden sleepers and semaphore signals and the like?

Tom

 

Possibly the biggest driver of what corporate/financial structureworks best is the background situation that appears to be a truth across all heritage railways;

1. To be truly commercial, you can’t do much heritage conservation. See the Paignton & Dartmouth or Vale of Rheidol business model. That is why you will probably never see a B set at Kingswear, or all three of the VoR tanks in steam during the same year (or even decade!). Without unwashed volunteers and gift and grant, you are very constrained, but a stable investment for the owners and a happy customer for the bank.

2. Supporters can be enticed to invest in capital projects, but won’t support maintenance. And they are very attuned to the difference.

This is perhaps most vividly demonstrated by the GreatWestern Society. Their membership is a broad church, from small relics conservators and academics to blasting a blue King out onto Network Rail (soon, anyway) - but united by a very focussed devotion to the cult of the copper cap. They routinely stump up for inconceivable miracles – Railmotor, Lady of Legend, Pendennis Castle, etc, and can have a serious conversation about recreating a Dean Single without having to reach for the Tramadol. On the other hand, they struggle to raise anything much for a new shed roof, or to return stalwarts like 1466 or Cookham Manor to steam. Supporters see that as maintenance, to be funded from gate receipts, thank you very much.

These two considerations seem to be the defining rock and hard places between which everyone has to work.

It is also a brick wall into which the mature railways are now all crashing together. Infrastructure and locomotives have finally emerged from the cocoon of work done by BR, and are presenting their owners with massive financial headaches – quite outwith any previous experience. Theaccepted wisdom that a 10 yearly will cost £500,000 is fine if you say it quickly enough, but a bit sweaty if you actually have to write the cheque out.You can let your infrastructure suffer catastrophic failure and throw yourselfon the mercy of an emergency appeal to the faithful, but when you have done it once you have played the Joker and you can’t keep doing it.

Whatever structure you follow, you need to be able to earn £50,000 a year every year for every working engine in your pool, even before it breaks a spring or pops a piston liner. And you need a combination of cash reserves,insurance and (awful option) pre-negotiated bank borrowing that allows full business recovery when your infrastructure has complied with the rules of gravity rather than the power of wishful thinking.

The calibre of your leadership, the productivity of your unwashed (ideally all of them volunteers), and how successful you are at selling tickets and ice creams are probably more important than your Articles of Association or charitable registration.

Aye

GF-G (being very off topic – sorry ‘bout that!)

 

No, not off topic - the thread encompasses "fundraising" as well as "structures" Maybe I should have said "funding".

The £50k per year per engine figure is interesting, and is a ballpark that I have used before - obviously caveated that it depends on size and complexity of the engine. But let's take it as a ballpark fair estimate: that means even if you manage 100 steaming days for a given engine (and how many engines manage that?) then you need to clear £500 per day before you even start paying for your coal and water and oil. Which puts the general enthusiast cry of "why can't we have X and Y and Z at a gala?" into context: if the owners of X and Y and Z aren't charging at least £500 per day to hire them out (plus transport costs...) then the said owners aren't charging enough!

And not just engines: if a figure I have heard for track materials is right, and assuming a useful life of about 40 years before complete renewal is needed, then you also need to be putting aside about £10k per mile per year for track renewals, just for materials. The true figure might be £25k per mile per year if you assume that when you relay, not only will you replace the sleepers, rail and ballast, but you might also dig out right back to the base of the formation, restore drainage etc. £1million per mile, with a design life of 40 years, sounds about right - hence £25k per mile per year. That's quarter of a million per year for the Bluebell; twice that for the NYMR or WSR. And that is before you think about signals, stations, bridges, tunnels, viaducts... Oh, and if you are the Bluebell or SVR with forty-odd carriages in traffic and want to do an intermediate every twenty years and a heavy every 40 years, that means one heavy and two intermediates per year - that's another £200k per year or so...

I do think a lot of enthusiasts are in denial about just how expensive it is even just to stand still, without thinking about doing all the cool development stuff we actually want to do...

Tom

 

The £500 per steaming day is just the “depreciation” against the next and inevitable heavy overhaul. There is maintenance too. There was an interesting item in Steam Railway some issues ago from the FD of the A1 Trust who said (from memory) that after allowing for some paid staff, £7000 was not a sustainable daily appearance/railtour fee for them.

I actually think the £500,000 figures has some merit - except that it is a major burden on the revenue account and demands very healthy ticket sales. The B1 chaps have done most of a 10 yearly on their 4-6-0 for about £350,000, by using volunteers but boiler certification meant a trip to a contractor with coded welders and insurance and £230,000 went just for that bit.

I think your other depreciation/renewal figures are very robust. Carriages are as big a cashflow pitfall as engines, but I wonder if a coach can run 40 years between heavy repairs. 10 years will see off the interior upholstery, window seals, and the paintwork...

Bridges seem to have a particular skill at catching their owners unawares. A civil engineer would be able to throw some values at the cost/benefit of preventative maintenance versus waiting for nemesis or a TSR.

There should, with some expertise from other spending departments who post here, be a mean number that is a real annual cost per mile figure applying to most heritage lines. I think it will be interesting and very frightening, and it will shape the viability of the movement over the next couple of decades. It may even underscore the need to cherish the unwashed, because actually there is no money for a big payroll and doing actual preservation.

Aye

GF-G

 

Of course so! Some railway enthusiasts are as benighted as any football supporter. "We want, we want" is the cry, egged on by silly magazines, without the slightest idea of who is going to pay.

I am reminded of the cynical comment of a long dead motoring historian regarding car makers. This was to the effect that if you made a big enough loss there would be no difficulty in borrowing enough money for expansion so you could make an even bigger and better loss! For "borrowing", in the case of preserved railways, read "share issues".

The Byzantine structure of some operations is amazing; "A" company, "B" company, "Holding" company etc. It makes it almost impossible to judge if enough money is being made, or expended on maintenance, or even distributed sensibly between the competing calls. (See a certain lengthy thread elsewhere). Even the companies with a simpler structure have difficulty in adjusting to variations in levels of business. (See another lengthy thread)

PH

 

All true, but if we have a go, might we get a better qualityof loony-tunes schemes, deter some of the real no-hopers, and enable people to make informed numbers-driven judgements about future business models and funding demands? Don’t assume that the Directors of any preserved railway have big crystal balls – the truth is they are mostly in as much darkness as the rest of us.

It is also true that every one of the established heritage lines – except the most hardcore commercial ones - were once improbable loony-tunes ideas before they grew up (and in many cases, ran out of money).

Aye

GF-G

PS Could I for the sake of completeness add to my list of P& D and VoR (above) the Lakeside & Haverthwaite and Snowdon Mountain as hardcore unwashed-free zones that make a reasonable net profit every year, but might not be as much fun to be part of.

 

As has been discusses in this and other threads the heritage railway industry is increasingly finding itself at odds between which course of action is better for the long term survivability of the railway. Railways are expensive things to operate and maintain which can lead to pressures to ‘modernise’ to reduce this cost, yet many supporters are supporters because they wish to see ‘the past’ in many varied elements preserved or recreated as best as possible. These two aims may be seen as almost mutually exclusive, yet I don’t believe that that need be the case (at least not for all locations for 100% of the time). I am also of the belief that encompassing the heritage aspect as far as is reasonably possible in this health & safety age is at least one of the answers to actually increasing revenues by keeping visitors on the line for longer and/or encouraging repeat visits.

I would propose a three pronged approach to generate the most harmonious situation, which would best serve the interests of the railway and its membership in the long term.
The first part of this triumvirate would be the establishment of a clear policy (a heritage constitution if you like) as to what the railway is for. Such a policy would be guarded by a group of elected, by the membership, representatives who enforce a clear mandate regarding policy and aspirations in order to safeguard the integrity of the railway. Any changes to this constitution would be voted on by the membership.

This constitution should be clear statement of definition of the railway and should include full details of what we are preserving or aiming to achieve. For example, at one end of the spectrum you may have a railway just concerned with operating steam locomotives hauling house liveried Mk2s without any reference to historical accuracy, using computer printout tickets and with the station building being a portacabin (this is fine if it’s what the membership have democratically agreed to). Another railway may have a constitution which aims for the operation of steam locos in an historically accurate a way as possible, and preserving the steam age infrastructure – and here we can then broaden this to perhaps having different stations representing different time periods, 30s and 50s for example. Taking this further does the infrastructure stop at the platform end or does it include other infrastructure such as platelayers huts, telegraph poles, wooden sleepers and bullhead track. Further still does the railway try to keep alive the traditions and workings of the steam railway, a well maintained lineside with neatly cut back vegetation for example. This heritage protection body could advise on how best to keep necessary developments within the preservations of the railway, for example advocate the installation of a properly staffed barrow crossing for disabled use instead of an out of character footbridge.

This policy document and its custodians are key to defining what the railway is trying to do, to ensure that the third part of the trinity do not act outside of their remit and destroy the very fabric of what is being preserved/reproduced in the first place.

My second structural element is the membership organisation, the railways bread and butter supporters (both working and armchair). By the fact that these people have become member means that they have bought into the constitutional aims as something laudable to pursue. I would propose that the railways physical assets are vested in this membership body. By doing so it would make it impossible for one person or group of people to gain control of the railway and to turn it into something that the membership does not want. Secondly I believe that with the asset ownership in the hands of the membership body then possibilities of a fire sale should the railway cease to trade profitably would also be negated. Thus the long term future of the railway is assured. It becomes owned by the body (albeit comprised of different individuals) who created the railway in the first place.

My third structural element is that of an operating company and its directors. This group would be responsible for the day to day running of the railway, to make the railway attractive enough bring in sufficient visitors to generate a profit, to take care of planned maintenance out of those profits etc. Their actions, although autonomous on a day to day level would have to be within the remit of the aforesaid constitution. This group of people would be subject to annual election by the shareholders. The operating company would have shares, but at least 51% (and preferably in the region of 60-75%) would be held by the membership body, again so that control is maintained by the people who buy into the aims the most – the members. In this way the operating company could generate funding via share issues but these would still be subject to control by the members. For a large railway the membership body could generate £200k pa in memberships (£20 x 10,000 members), which could be drip fed into the buying of shares to maintain this percentage, or could wait until a share issue is launched, which that was every 10 years would give a £2m pot with which to maintain its percentage shareholding. Alternatively this membership pot could be used to fund capital projects in its own right without the recourse of a share issue.

I’m sure some experts on company/charity/membership structures will pick gaping holes in my case on this as I’m no expert in the legalities of such a structure. But I feel that this triumvirate would be a good starting point to organise a railway if you were starting from scratch. The power would be in the members, the operating company and its officers would look after the day to day operating with the aim of making a profit to sustain the railway at its optimum operating level. Capital projects could be funded by share issues or members. And the whole of this would be performed within the boundaries of a set of constitutional heritage aims.

 

Zigzag,

You have almost (but not quite 100%) described the structure of the Bluebell - which I guess is at least a bit comforting!

Firstly, we have the kind of constitutional protection for heritage objectives you describe. Our Long Term Plan says that the objectives of the society are to:

To back that up, we have a "Heritage Standards Committee" with a dedicated trustee to oversee that role. With regard whether preservation stops at the edge of stations or on the whole line, we have designated areas within stations within which no development can take place without agreement from the Heritage Standards Committee - so I guess that is your answer: it stops at station boundaries. Hence bullhead rail in stations, but flat bottomed on concrete sleepers between stations.

Our draft new Long Term Plan considerably strengthens (in my view) the heritage element.

Secondly, we have a membership organisation that sets the above policy, but vests operational running in a separate commercial company. Our constitution requires the membership body to own at least 51% of the PLC, and the current percentage is about 72% - exactly as you describe. We also use the Society to fund the PLC exactly as you describe: the surplus from membership fees (remembering that the Membership body collects membership fees in, but has very few outgoings) are lent to the PLC as an unsecured loan, and periodically are converted into shares when the PLC does a new share issue. Thus there is an effective drip-feed of £100k or so every year from the membership body to the PLC that ultimately is used to maintain the overall shareholding above 51% while still allowing the PLC to raise funds through share issues. Though as I said in my opening post, that effectively controls the rate that the PLC can issue new shares.

We have two differences from the model you describe: The first is that, as far as I can see, a lot of the "Bluebell family" owned assets are actually on the books of the PLC, not the membership body. I'm not enough of a historian to know why that happened, but it is a potential risk in my view, though probably ameliorated by the fact that the membership body owns a majority shareholding in the PLC. Secondly, we have a third body, a charitable Trust, which can fundraise independently in a tax-efficient (for donors) way, though those funds are more closely prescribed in what they can be spent on. GFG makes the point that members are quite attuned to the difference between "development" and "maintenance" activities, funding one but not the other. But some of that may also be because the fundraising groups within the overall "family umbrella" are constrained on what they can fund. For example, currently we are fundraising through the Trust to extend the canopy at Sheffield Park, restoring it to its Victorian condition; but it is harder to fundraise from the same source to simply buy materials to maintain the track etc.

Tom

 

Why would anyone tear it apart? You have bought a number of relevant issues to the table, all far more important than the niceties of charity and company law. You emphasise the importance of democracy to you, you differentiate between very different categories of end product, you propose heritage should be protected by a constitution, and you identify the importance of making a profit (which when I was younger was a very dirty word on the railway I know best and elsewhere – it was treated with the deepest suspicion).

Where I would cast a quizzical glance at your triumvirate structure is the duplication of organisations. Is it necessary and does it bring actual benefit? Or is there a simpler way of doing it? Another poster has used the word byzantine, and certainly you can end up with a lot of duplicated Chiefs supervising a relatively small number of Indians. Sometimes having duplication actually makes it easier for ambitious men to hijack the democracy you seek, and demolish it before you even notice it has gone. See my posts elsewhere for a real life example of how exactly that has happened under the noses of 13,000 members of a railway.

Is there a single unitary organisation (of any kind) that can do the whole job? One set of Directors, one set of accounts, one set of shareholders/members. You mention “power”. What happens if you call it good leadership? Do you still need a multi-layered structure? Are there any lessons for us, perhaps, in how the John Lewis Partnership works? Maybe a store of shops is not a railway, and is just too far off the wall even for consideration, but it is a corporate structure I have always liked and looked at enviously.

Aye

GF-G

 

A most interesting discussion. What strikes me as a threat is the fact that preservation societies are still being created and new lines are being started up. I would have thought that the future demands an implosion rather than an expansion. Foremost I see as difficulty is what one correspondent somewhat unkindly referred to, but not entirely inaccurately, as the reduction in numbers of 'fat old men playing trains'.

The 1950s train working class train spotters are now reaching the age at which the size of the movement that brought about the later preservation scene in the late 60s and 70s (previously the preserve of middle class vicars and the like), will almost certainly diminish in numbers.

The two trends above just do not match up - and that's aside from the wasteful politics! Naturally I hope I am wrong.

If societies are not structured as Tom points out they had better grasp the nettle pronto. I know of one major line PLC that has in its mission statement no mention of preservation or conservation that I could find - just all about tourism and being part of the local economy - that stuff.

 

K&ESR has the closest model I can think of to a unitary structure, in that the Members have democratic control over one organisation which owns the railway, runs the trains and raises the core funding. The K&ESR Co. is a charitable company limited by guarantee. It owns and operates the railway as well as carrying out all the other charitable activities. Operating trains is a charitable activity since this is one of the aims of the charity. Members join the company`(not a society), paying the annual subscription fee and electing the Directors who are`also the charity Trustees. A bit like joining the National Trust I suppose. The company cannot issue shares but has borrowed money in the past by selling redeemable Bearer Bonds. As a charity it can apply for all grant-funding which may be available. Non-charitable trading activities (e.g. shops and catering) are carried out by a wholly owned subsidiary which donates all profits to the charity.

(The above description excludes the separate Trust and Company set up to fund and manage the Robertsbridge extension without financial risk to the existing railway. Since the aim of the RVR Trust is eventually to hand over the completed project to the K&ESR I presume these organisations will dissolve after this is achieved.)

 

Maybe that is as close as we could get to unitary, but I still think the partnership concept has something going for it.

For reasons I can't quite put my finger on, I always thought KESR Bearer Bonds (I still have a unredeemed one somewhere) were somehow more "honest" than printing and selling millions of comedy "shares" that provide the owner with the square root of b*gger all in influence.

Aye

GF-G

 

I can name a railway which owns every last piece of rolling stock and equipment. It also owns all the land it runs on (debt free)except for one of the termini whose site is held on a long term lease.

There are only two organisations concerned in its operation. One is the statutory operating company, a Charity limited by guarantee where the Trustees are elected by the votes of the members. The second company is concerned solely with sale of goods and refreshments to make profits to donate to the operating company which it has done successfully. No loss making catering here!

Oddly enough, when it started up, this organisation fell slap bang into the "loony-tunes" category. It would never be allowed to start up thus today. There weren't even any lavatories for the passengers! This poverty stricken start was to the lasting benefit of the line for it has never had any illusions as to where money comes from. It comes from the membership, what it can glean from fares and sales, private charities, local authorites, bequests and the National Lottery. It has never been easy and won't get any easier but to old timers the present state even if not exactly rolling in money at least one of relative comfort, still seems unreal.

Which railway? The Welshpool and Llanfair which celebrates the 50th. anniverary of reopening this year.

 

I agree about the 'comedy' railway shares which will never pay a dividend and I'm sure are mostly worthless on the open market whereas the K&ESR bonds have a guaranteed rate of interest and redemption. However the K&ESR hasn't issued any more bonds since almost drowning in debt following the Bodiam extension but if a high proportion of the bondholders (including me) decide not to cash them in when they mature the railway will see a nice little boost to the balance sheet at that time.

 

Shall we have a collective style guide decision that henceforth in this thread all shares in heritage railways except the commercial big four- Dart Valley Railway PLC, SMR or LHR (VoR is owned by a Rampton family trust) - shall be referred to as “Comedy Railway Shares” – just to keep ourselves reminded of what they really are? Nice wallpaper, and nothing more.

Aye

GF-G

 

Miff - I think one reason for not offering bonds more recently is that the financial regulations have changed, making it more complex.

For example, about 10 or more years ago, the Bluebell needed to raise money very rapidly to buy the Woodpax site (where our new Carriage Shed is sited). It did this by accepting money on deposit from members - essentially loans to the company. The interest rate was 0%, but there was a defined period after which the loans would be paid back. By doing such, the railway raised the required £400k very quickly - I think in about 2 weeks. Subsequently, some members have written the loans off and turned them into donations, but some are still outstanding and theoretically due for redemption at some future point - they are there as a liability in the PLC balance sheet if you look.

But between that date and around 2007 when we needed to raise money for the excavation of the tip, the financial rules changed. Essentially, it was deemed that if we took money on deposit, we were effectively operating as a bank - and without a banking licence, we couldn't do that. Hence, no loans from members, so we turned to a share issue. That still had the FSA crawling all over the offer document to make sure we weren't misrepresenting what we planned to do. Many members may have considered their purchase to be "Comedy Railway Shares" - I couldn't comment - but the FSA most definitely didn't. That is one reason why I think raising money via a share issue is an expensive way of raising capital.

As for GFG's unitary "John Lewis" model: even the KESR, as has been stated above, has a separate (albeit wholly owned) commercial subsidiary. I think such models are common in any organisation that is basically charitable and which relies in part on volunteer labour, for example the National Trust, many museums etc. Unlike a shop - even a co-operative, like John Lewis - most heritage railways have built up capital value essentially by volunteer efforts: turning Barry wrecks (worth scrap value) into working locomotives (worth hundreds of thousands) etc. So it is important that if there is a financial collapse (which I would define as the trading part of the organisation becoming insolvent) that that collapse doesn't result in a fire-sale of assets to meet liabilities. Hence the desire of organisations to try to separate the valuable assets away from the body that is most likely to go bust, which is the commercial wing. Ultimately, the "society" part of the family has very low outgoings: just maintain secure member records and hold an AGM. Whereas the commercial operator has huge bills to pay, and if passengers don't turn up, it can run out of cash quickly because of commitments it has made in paid staff, coal, water, stocks and stores, catering supplies etc. So that introduces at least two organisations, which might be more complex than seems desirable, but does help protect the output of all that volunteer labour if commercially things go wrong.

Finally, having separate charitable and commercial arms allows access to substantial taxpayer assistance. For example, the Bluebell has raised about £1million per year through its charitable trust for the last two years. Assuming most of that has attracted Gift Aid, that means nearly £200k per year has come from the taxman. That's enough on its own to have overhauled a large engine or a couple of Edwardian carriages - not to be sneezed at.

Tom

 

Tom...you can overhaul a big engine for £200,000? Pull up a chair and tell us how you do it. Especially the big round bit above the running board, which seems to be a black hole of cash for everyone else. Seriously, can Sheffield Park turn out a big engine for £220k? If it can there is a multi - million pound Mutual Improvement Class in the offing...because its the engines and especially their boilers, that are killing us all. Which is a bit ironic really.

I am not advocating the partnership model, just seeing what Nat Pres think of it and trying to understand why it would not work. I am not foisting it on anyone. Unlike my posts elsewhere on this Forum, I am here to listen and learn.

Similarly, I sometimes question the importance of democracy in the mix. One example - a side effect of having multiple layer structures that few notice is the co-opting of Directors not just directly to a Board when it suits, but across from other layers as an ostensible checks and balance precaution, but actually hijacked - as it is in all walks of like - by chums looking after each other. If you let that soft corruption run for a while unchecked, you find that hardly any of your leadership was actually elected to the role they really hold. And if they were elected, it was by their colleagues because the unwashed are often deeply unmoved by the tedium of an AGM and just don't bother going.

Would you actually get more real democracy if you dumped it as a sacred concept and relied on market forces? I think we would probably all agree that right now the movement is paying too many people, staff, managers, contractors and consultants, for the revenue available - across almost all departments. I cannot imagine anyone saying we need MORE of any of them. Balancing the books means throwing the burden back on the unwashed. The unwashed are sensitive to not being listened to - and even more attuned to having the p*ss taken out of them. A strong leadership would listen to the unwashed on their merits, above all their cash value, not because they are exercising some probably weasel worded "right". If a group of unwashed can save a railway manager £100,000 on a loco overhaul, he would have to be a bit touched not to listen? Faced with losing them and a getting a huge invoice from Bury, Llangollen, Carnforth, Crewe, or Tyseley, who wouldn't listen?

Aye

GF-G

 

Presumably "shares" of the sort we are discussing are entitled such due to legal requirements, when, really, they are donations with perks attached dependent on amount donated (and subject to change at later dates).

 

No, muddled my maths - meant to say, we got £200k from the taxman for each of the last two years, and that would overhaul a reasonable size engine (i.e. £400k). But then blew the maths totally by saying "or a couple of Edwardian coaches", because you could probably do about 3 or 4 for that sort of money. But either way, £200k per year from the taxman is not to be sneezed at - though you have to work d*mn hard for the other £800k per year in the first place from your supporters that releases that last £200k...

Tom

 

I think they are genuinely shares, as understood by the Financial Services Authority, in the sense that you buy them with money, you can't claim Gift Aid back (because they are not a donation - you get something back in return); every year the Directors have to decide on an appropriate dividend; and there is no guarantee that you will ever get your money back. Unlike, say, shares in ICI or Shell (or HMV or Jessops, for that matter) there is almost no secondary market[sup]*[/sup] and therefore it is almost impossible to value them after your purchase, but if you could find a purchaser, you could sell them on and that new owner would then be eligible for whatever dividend the Directors choose to offer. There are plenty of small companies that have share capital but almost no secondary market. Actually, pound for pound, my Bluebell shares have had the best annual return of any shares I have ever purchased (hello Lloyds Banking Group... <gloom>), provided you don't mind being paid in free rides on the railway!

So while I think that a lot of people who buy them are essentially doing so for charitable reasons, I think you have to be slightly careful calling them "Comedy Railway Shares".

[sup]*[/sup] I believe there is a secondary market in SVR shares, but certainly not to my knowledge in Bluebell ones.

Tom