Only ten workers had survived its collapse into insolvency and Hadida, a software entrepreneur, faced a steep learning curve to overhaul the finances and production of a 45-year-old manufacturer.
A lot of hard work and about £26 million of Hadida’s money later and the Southampton-based luxury yacht-builder is bigger than it has ever been and recorded its first monthly profit in January. It now employs 420 people and expects sales of £60 million this financial year. “We’ve turned the business around,” Hadida, 55, said. “We’re back in profit, we’ve got a full order book, we’ve got beautiful boats. My writing cheques every month is done.”
Oyster has made bespoke yachts for the super-rich since 1973. Its failure three years ago was precipitated by a legal claim arising from the loss of one of its vessels, the Polina Star III, which resulted in its Dutch investors withdrawing their backing for the lossmaking business. Hadida’s £6.7 million offer was picked by the administrators from 30 parties.
For Hadida, a lifelong sailor and the owner of an Oyster 885 yacht, the turnaround has been a labour of love. Investment has been made in IT, design and manufacturing facilities, including bringing its composite moulding operation for decks and hulls in-house, and the company keeps direct relationships with customers from the original sale through to charter, repairs and refits, maintenance and provision of crew.
“We do everything from day one in production to customer support when the boat is sold. Most of the Oysters are still going. Owners ring us up 40 years later and say, ‘I’ve got a problem.’ We can get the plans out for that exact boat and tell them what component they need.”
Now the focus will shift from reaching profitability to managing growth. Improving production efficiency has been harder than expected and remains a “big job”. Despite expanding manufacturing facilities by taking on space at Hythe Marine Park in Southampton, where Imperial Airways’ flying boats were made in the 1930s, the company still does not have enough production bays to keep up with orders. “We’ve sold out every bay. If you want a boat, the opening slot is two years forward. That would turn me off as a buyer, so we have to increase capacity and build efficiency without affecting quality.
“We will get there. As long as we’re selling boats then we can build everything else. We will expand at a sensible but quite aggressive rate.”
Oyster’s top-of-the range boats can cost north of £20 million, but the company is producing a new entry-level 50ft series, the 495, at Hythe, where it will employ 70 staff. The 495 sells for just shy of £1 million and relies on more efficient production with fewer customisation options than larger boats.
Sir Richard Matthews, who founded Oyster, has been leading the 495 project and Eddie Jordan, the motor racing entrepreneur and television presenter, is also on the board. “The business’s previous guard basically kicked [Matthews] out. He’s got a lifetime of experience and we work really well together.” Peter Hamlyn, formerly at Princess Yachts and Fairline, has been hired as chief operations officer.
According to Hadida, who made his money from building and floating Evolution Gaming, which provides software for bookmakers to produce casino games, the pandemic has added to production difficulties. “It has cost the business in efficiencies left, right and centre,” he said, referring to the need for social distancing and regular cleaning, which slow manufacturing. The pandemic has taken a personal toll, too: Hadida has caught Covid-19 twice. “The first time I was sick for eight or nine weeks. The second time wasn’t as bad, but I was in bed for 21 days. Not fun. I’m really bored of Covid.”
Covid hasn’t dented demand, however, and Oyster has sold more than 20 boats during the outbreak. “To have a blue water adventure machine you can jump on board and disappear, there’s a lot of attraction there.”
Accounts for the year to March 31, 2020, show sales of £20 million and a pre-tax loss of £10 million. Sales in the year to March this year were about £30 million, with losses narrowing to £3 million. Hadida expects sales to double and to record a maiden annual profit in this financial year. He added that the company would benefit over the longer term from a transition from solely motor-powered boats to sail-powered ones owing to pressure to reduce carbon emissions. “The world needs sails: self-powered transportation.”
To help it to meet its own demand for skilled staff, it has established an Oyster Yachts Apprenticeship Academy. “We’re trying to teach them real skills, lifetime skills, it’s fantastic,” said Hadida, who left school halfway through his A-levels to pursue business interests. It takes four years for an Oyster trainee to qualify. “You invest in the people and young people now and then in the future the skills are going to be there. That’s the sustainability.”
Also sold out are the company’s next two Oyster world rallies, in which 30 Oyster yachts sail 27,000 miles around the world every two years with support from the business. “We’re the only company in the world that does a global world rally, bucket-list tour of the world. It’s an amazing marketing tool: you have to buy an Oyster to do it.”
The turnaround has made a dent in his fortune, but there are no regrets: “When you see the happiness on the owners’ faces, you are creating people’s dreams. I love that.”