Sunseeker reported financial results for the Group emphasizing the much improved profitability of the business in 2011, with EBITDA of £25.5m based on sales of £275.5m during the 2011 financial year.
The financial results of the Company were heavily impacted over the last two years by exceptional costs, attributed primarily to historic issues that date prior to the company’s acquisition and refinancing in 2010. These exceptional items amounted to -£12.5m in 2011 and -£30.2m in 2010, resulting in bottom line losses for both the 2011 and 2010 financial years of -£6.8m and -£40.6m respectively. Turnover was £276.1m (€315.1m) for the 2011 financial year end, a nine per cent decline from the previous year’s high of £304.6m (€364.2m).
Exceptional items detailed in the financial statements for the year ended July 2011 and July 2010 included property revaluations and disposals resulting in net losses of -£10.6m in the 2010 financial year. Additionally, dealer financial difficulties during the downturn and non-recurring warranty costs related to commercial arrangements prior to the acquisition resulted in losses of -£11.1m in 2011 and -£15.3m in 2010. The company also incurred refinancing costs of -£6.6m in relation to the acquisition of the Sunseeker Group in June 2010.
Sunseeker was acquired and refinanced in May 2010 by Portofino Yacht Holdings Ltd (renamed as Sunseeker Yacht Holdings Ltd), a private limited company incorporated in Ireland. The ultimate parent company is Portofino Yacht Investments Ltd, which owns a controlling interest in Sunseeker Yacht Holdings and is also incorporated in Ireland.
Results for the parent company differ from those of Sunseeker International Holdings because they do not include the exceptional items, which were treated as losses arising from trading activity prior to the acquisition, and thus are included in the accounts as part of the goodwill in relation to the acquisition.
Despite the headline losses, the directors noted a number of positive outcomes for the year, including a radical overhaul of Sunseeker’s supply chain, delivery on a range of operational efficiency programs, and strengthened cash flow and liquidity. As a result, EBITDA was up dramatically in 2011 to £8.6m from -£30.7m the previous year. Excluding exceptional items, the directors reported EBITDA of £20.8m for the 2011 financial year, compared to £4.9m in 2010.
However the company remains burdened by debt with total Group borrowings of £65.9m at the 2011 financial year end, including £26.2m in bank loans and mortgages, £21.6m in parent company loan notes and £13m in directors loans and notes held by Mr. Braithwaite.
Nevertheless, the Directors confirmed their strong confidence in the Group and the Company as going concerns with adequate resources to continue in operational existence for the foreseeable future and also referenced the financial support available from parent company Sunseeker Yacht Holdings.
The Directors Report also made note of the brand’s continued strength in the market place with over £50m invested in the last five years in new products and infrastructure, an order book which is ahead of last year’s order book at the same time and backed by deposits, a successful shift in product mix to larger yachts and growth in new markets. Sunseeker’s workforce has also remained fairly constant through the recession, averaging 2,251 as of July 2011, only a two per cent decline from 2,303 employees the previous year.
