Southernman Posted November 10, 2010 Share Posted November 10, 2010 So the reserves have gone from £23.9 million in 2007 to £7.7 million at the end of 2008. Wonder what the position is now? Presumably can't continue to keep paying big dividends if there are limited reserves? From the Hansard report of the Select Committee hearing, June 2009: The Chairman: If I could ask now, the continuing payment of a dividend which exceeds profits earned in the year depletes the shareholder reserves: was a similar level of dividend paid for the year 2008, and is the Company intending to continue with this policy? I think essentially you have answered that, but nonetheless, just for the record. Mr Woodward: I think, again, if I may refer to an answer we gave previously: in 2008, due to high fuel costs, capital expenditure, notwithstanding the Mannanan projects, as well as other capital expenditure, and lower passenger, vehicle and freight volumes, there was less cash available for distribution and therefore shareholders received no dividends. Similarly, due to lower volumes experienced in the current challenging economic environment, we forecast no dividends to be paid in 2009. He must be confusing his years because dividends of £17.9m went through the 2008 accounts. I presume they are in respect of earlier years' profits. Quote Link to comment Share on other sites More sharing options...
manshimajin Posted November 10, 2010 Share Posted November 10, 2010 The dividend in 2007 was £22m, in 2008 £17m. In 2009, they only have £7.7m distributable reserves left plus the profit made in 2009. The shareholders may have a problem if they need to maintain the dividend to service debt etc. Mr Woodward: I think, again, if I may refer to an answer we gave previously: in 2008, due to high fuel costs, capital expenditure, notwithstanding the Mannanan projects, as well as other capital expenditure, and lower passenger, vehicle and freight volumes, there was less cash available for distribution and therefore shareholders received no dividends. Similarly, due to lower volumes experienced in the current challenging economic environment, we forecast no dividends to be paid in 2009. Scratches head ...I wonder what the dividends itemised in the accounts are then? Quote Link to comment Share on other sites More sharing options...
P.K. Posted November 10, 2010 Share Posted November 10, 2010 Thanks for that. I hadn't spotted that note to the accounts. So the reserves have gone from £23.9 million in 2007 to £7.7 million at the end of 2008. Wonder what the position is now? Presumably they can't continue to keep paying big dividends if there are limited reserves? I was under the impression that there were no "real" shareholders as such but it all goes into a Macquarie bucket and then gets passed up from there. Despite no recent divvy according to the Select Committee report there was the usual bleeding-off for "management and consultant fees" to the parent group. So now I'm wondering if the acquisition by Macquarie was a leveraged buyout? Quote Link to comment Share on other sites More sharing options...
Sean South Posted November 10, 2010 Author Share Posted November 10, 2010 Gilf UK many thanks for posting the links to the accounts. One thing puzzles me a lot - the dividend policy. Over the 3 years shown in the accounts the IOMSPC has made total operating profits of £42.531 million and paid dividends of £59.595 million i.e. over £17 more paid in dividends than was achieved in operating profits. Would these be payments being made to upstream companies to pay for loan interest? Presumably this is why assets/shareholder funds have dropped by about £8 million p.a. in the same period? At that rate shareholder funds would be wiped out by 2015? If the losses are as bad as they say they are since the loss of the Graylaw cintract, then they will be wiped out by around 2011/12 at the latest I'd say. Oh, what excitement ! you don't get that with BMC So you conveniently forgot about the time they 'Rammed' their own vessel(possibly the Ben) against the battery pier breakwater then The Lady rammed into the pier one TT as well. I always remember Nigel Kermode was knocking out T Shirts of it within hours of it happening. I think the Orry bounced off it once or twice too... It's handy that Tempus Fugit was watching the CCTV to see it happen... For one who has no "interest" in the SPCo.... Quote Link to comment Share on other sites More sharing options...
ThankU Posted November 10, 2010 Share Posted November 10, 2010 How long will Tesco put up with the shit service, tonight's weather forecast ain't good for shipping Quote Link to comment Share on other sites More sharing options...
Tempus Fugit Posted November 10, 2010 Share Posted November 10, 2010 For one who has no "interest" in the SPCo.... as stated earlier, I have no 'interest' in any shipping co. not by business, investment or employment, purely as a passenger and an interest in AIS Quote Link to comment Share on other sites More sharing options...
theambo Posted November 10, 2010 Share Posted November 10, 2010 How long will Tesco put up with the shit service, tonight's weather forecast ain't good for shipping I imagine they will put up with it just as they did when the SP didnt sail. Its not as if the SP ran a special Tesco airfreighting service if it was too rough to sail. Quote Link to comment Share on other sites More sharing options...
Digga Posted November 10, 2010 Share Posted November 10, 2010 Oh, what excitement ! you need to get out more by the sound of things, here's a likkle piccy to hang on your wall Quote Link to comment Share on other sites More sharing options...
Chris Robertshaw Posted November 10, 2010 Share Posted November 10, 2010 For me the most interesting question lies within the balance sheet. If the value of the bank loan is balanced by recognising the value of the goodwill within the User Agreement and if it is the case that there are no capital repayments being made(lines 815 to 825 of the Select Committee Report)whilst of course it is stating the obvious that the value of the User Agreement goodwill must be reduced over the lifetime of the agreement (Page 30 of the select committee report - MIOM Ltd amortisation of goodwill £10,561.000 for the year end Dec 2007) then the question remains how the balance sheet can be kept in an acceptable condition. Is the view that sufficient profits are being generated to increase the revenue reserves to cover this developing gap whilst still paying the annual interest cost of the bank loans as well as pay the management fees and some form of income for the investors? Seems a very big ask to me. Quote Link to comment Share on other sites More sharing options...
b4mbi Posted November 10, 2010 Share Posted November 10, 2010 The dividend in 2007 was £22m, in 2008 £17m. In 2009, they only have £7.7m distributable reserves left plus the profit made in 2009. The shareholders may have a problem if they need to maintain the dividend to service debt etc. Thanks for that. I hadn't spotted that note to the accounts. So the reserves have gone from £23.9 million in 2007 to £7.7 million at the end of 2008. Wonder what the position is now? Presumably they can't continue to keep paying big dividends if there are limited reserves? yeah correct, you can't pay divdends out of share premium account it's illegal. So distributable reserves of £7.7m c/f from 2008 y/e plus retained profit for 2009 (whatever that was) would be max dividend possible for 2009. which means shareholders likely have BIG problem, because now operating company doesn't generate enough CASH to service the interest (via the dividends) on the borrowing. Cash flow statement would be telling.... even rough calculation on borrowing of £200m at best at 5% - £10m per annum interest costs.... means either a) shareholders provide additonal funding to MIOM to pay interest b) they default on interest payments, meaning bank could call in loans... looking forward, how the hell the £200m capital will be repaid is anyones guess... some red faced bankers in portugal facing big write offs.... Anyone care to put a value on IOMSPC at moment??? Quote Link to comment Share on other sites More sharing options...
Chris Robertshaw Posted November 10, 2010 Share Posted November 10, 2010 The dividend in 2007 was £22m, in 2008 £17m. In 2009, they only have £7.7m distributable reserves left plus the profit made in 2009. The shareholders may have a problem if they need to maintain the dividend to service debt etc. Thanks for that. I hadn't spotted that note to the accounts. So the reserves have gone from £23.9 million in 2007 to £7.7 million at the end of 2008. Wonder what the position is now? Presumably they can't continue to keep paying big dividends if there are limited reserves? yeah correct, you can't pay divdends out of share premium account it's illegal. So distributable reserves of £7.7m c/f from 2008 y/e plus retained profit for 2009 (whatever that was) would be max dividend possible for 2009. which means shareholders likely have BIG problem, because now operating company doesn't generate enough CASH to service the interest (via the dividends) on the borrowing. Cash flow statement would be telling.... even rough calculation on borrowing of £200m at best at 5% - £10m per annum interest costs.... means either a) shareholders provide additonal funding to MIOM to pay interest b) they default on interest payments, meaning bank could call in loans... looking forward, how the hell the £200m capital will be repaid is anyones guess... some red faced bankers in portugal facing big write offs.... Anyone care to put a value on IOMSPC at moment??? seems we both just said the same thing at the same time in a different form Quote Link to comment Share on other sites More sharing options...
Sean South Posted November 10, 2010 Author Share Posted November 10, 2010 Is the view that sufficient profits are being generated to increase the revenue reserves to cover this developing gap whilst still paying the annual interest cost of the bank loans as well as pay the management fees and some form of income for the investors? Seems a very big ask to me. That scenario was hardly possible prior to the Mezeron issue so is must be definitely impossible now? Quote Link to comment Share on other sites More sharing options...
gazza Posted November 10, 2010 Share Posted November 10, 2010 The dividend in 2007 was £22m, in 2008 £17m. In 2009, they only have £7.7m distributable reserves left plus the profit made in 2009. The shareholders may have a problem if they need to maintain the dividend to service debt etc. Thanks for that. I hadn't spotted that note to the accounts. So the reserves have gone from £23.9 million in 2007 to £7.7 million at the end of 2008. Wonder what the position is now? Presumably they can't continue to keep paying big dividends if there are limited reserves? And this is the reason why the SP should not get any specieal treatment at all from the gov. or anybody to feel sorry for it. look how much they have been creaming out of the company, and hence why the UA was valued so high in the first place. because up till this all kicked off the SP were making a shit load of cash, before they started paying hugh divs out. And the figures they have posted sure look like a vibale sea route for a diffrent company to take up when the SP gos. and i think it will fold. it has no choice but to really unless mezeron stop, They will lose 14 million from 1 contract alone. add in the rest that have jumped ship the total could well be up in the 20s. that is a hugh figure to lose in the space of a couple of months. How long will Tesco put up with the shit service, tonight's weather forecast ain't good for shipping what shit service, if im right in sayin the SP boat did not sail the other day as well. so there still better of using mezeron. And you can bet the sp boat will not sail a hell of a lot less than mezeron. or do you expect the bvoats to sail in force 10-12 which is forcast for thursday. Quote Link to comment Share on other sites More sharing options...
Sean South Posted November 10, 2010 Author Share Posted November 10, 2010 How long will Tesco put up with the shit service, tonight's weather forecast ain't good for shipping They have no choice. The Ben is off tomorrow due to weather so what choice have they? Quote Link to comment Share on other sites More sharing options...
Tempus Fugit Posted November 10, 2010 Share Posted November 10, 2010 Oh, what excitement ! you need to get out more by the sound of things, here's a likkle piccy to hang on your wall Oh thanks, I'd already been out this morning, done all I needed to and this all unfolded when I got home again and I've got nicer piccies than that Quote Link to comment Share on other sites More sharing options...
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