Compiled by British Marine, the positive results are despite the uncertainty generated by the Brexit vote in June 2016, which had an immediate and sharp impact on marine businesses. In July 2016, marine businesses reported a negative outlook for the next six months, with a net rating score of -7%. But confidence has surged since then, with a positive confidence rating of +10% posted at the end of 2016.
“The industry remains robust: revenue is growing and we are taking on more employees,” says Howard Pridding, CEO of British Marine. “Despite the post-referendum volatility impacting on business and consumer confidence, the industry remains bullish and keen to take advantage of the short and medium term opportunities that lie ahead, starting with the 2017 London Boat Show.”
Boat manufacturers are particularly buoyant post-referendum with a net rating score of +50% (up from 0% in May 2016). Much of this confidence is driven by the superyacht sector, which according to the Superyacht UK annual survey released in September 2016 is worth £605 million to the national economy.
“Competing on a global market, the sector has just posted its fourth consecutive year of growth and only seems to be on the up with an impressive 11.5% rise in revenue in 2015/16 alone,” adds Pridding.
But with the EU the primary supplier of raw materials and components for UK boat manufacturers, the British Marine survey points out that the depreciation of sterling against the euro has also meant the cost of manufacturing rose by 1.98% between Q2 and Q3 last year.
It is still believed that exporting manufacturers accrue a net benefit from the weak sterling, thanks to the increased purchasing power among foreign consumers that is driving demand for British products. As a result, confidence is high amongst those builders trading in international markets such as Princess Yachts, Sunseeker and Oyster.
Princess Yachts, for example, announced in October last year that it would create 100 new jobs and invest £55 million in new models (the builder has been in profit since June 2016, after turning around a £20.25 million pre-tax loss in 2015).
"Orders at Princess Yachts are now at their highest levels since the global financial crisis, with record sales achieved at the recent Cannes Yachting Festival and further huge interest at the London Boat Show this week,” says Antony Sheriff, Executive Chairman of Princess Yachts.
Sunseeker initiated a similar restructuring and investment plan after returning to profit last year, partly thanks to the falling pound following the EU referendum, while Oyster Yachts confirmed the sale of the second hull in its 118 series at the start of 2017 and is in serious discussions for a third and fourth.
As with other market sectors, the major worry at the moment for these superyacht brands is the ongoing uncertainty regarding the Government’s strategy – or lack thereof – for actually leaving the EU.
“Our members’ greatest long term concern is uncertainty and we will continue to work closely with Government to ensure the sector is given as much backing as possible from Government, especially as the Brexit negotiations begin,” says Pridding. “Access to the single market is, of course, important, but member companies are keen to minimise tariff and non-tariff barriers. Members are also keen to maintain access to skilled workers from across the EU and the government needs to do all it can to make sure that any future immigration policy with the EU supports marine businesses that are ambitious to grow and export.”
Images courtesy of London Boat Show