A Southampton luxury yacht manufacturer that was rescued from insolvency last year is planning a multimillion-pound upgrade to its production capacity as well as a recruitment drive for an additional 150 staff as it struggles to keep up with demand.
Oyster Yachts made a pre-tax loss of £8.7 million in its first year of trading under its new owner, the software entrepreneur Richard Hadida, but said that its turnaround plan is on track.
Accounts for Oyster Yachts Holdings for the year to the end of March report that “turbulent events” leading up to the failure of Oyster in 2018 and “long term under-performance and lack of investment in that business . . . had an impact on the results”.
However, Mr Hadida said that his investment to upgrade IT, design and manufacturing facilities, including bringing its composite moulding operation for decks and hulls in-house, were paying off for the boat maker. “Every part of the chain has been invested in and brought up to world class standards,” the 54-year-old added.
Mr Hadida invested £18.75 million in the business in the period covered by the accounts, with £6.6 million spent on buying Oyster assets out of administration and in new manufacturing facilities. He has said that he expects to invest about £25 million in reviving the company in total, with “quite a few million pounds” due to be spent on additional production capacity to keep up with demand.
Oyster has made bespoke yachts for the super-rich since 1973, but fell into insolvency in February 2018 after its Dutch investors withdrew backing.
It had been struggling with a legal claim arising from the loss of one of its vessels, the Polina Star III, as well as narrow profit margins.
As well as one-off investment and turnaround costs, the need to complete yachts sold by the previous management, work which was loss-making, contributed to the losses in the first 12 months of Mr Hadida’s ownership.
Oyster yachts range in price from £1.5 million to almost £20 million. As well as designing, building and selling luxury yachts it provides a range of related services, including chartering and repairs and refurbishments. It has three sites in the UK and two overseas and employs more than 300 people and had sales of £24.9 million in the year to April.
Mr Hadida added that Oyster does not have enough production bays to keep up with orders, and as such fresh investment in production facilities is a priority. Oyster is recruiting a further 150 staff across for its sites in Wroxham in Norfolk and Southampton.
“It’s a good problem to have,” he said. “We’re ahead of where we thought we’d be. Even with the Brexit indecision, we’ve been selling boats, building momentum.”
A lifelong sailor, Mr Hadida made his money from building and floating Evolution Gaming, which provides software for bookmakers.
Sir Richard Matthews, who founded Oyster in 1973, is helping the business with the design of a lower-cost “baby Oyster” yacht that is due to be launched in 2021.
Mr Hadida said that he expects the company to break even in 2022. “Towards the end of next year we will not need to put more money into the business.”
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