SVR General Discussion

Thanks.Looks good. I particularly like the return of the Waiting Room opposite the Booking windows.

 

To be fair, the the SVR the Silver and Gold passes are offering unlimited first class travel for up to four people which could amount to quite a sum if used extensively (I'm not sure of the difference in Silver/Gold passes, as the table you posted shows the benefits to be the same).
The issue of shares in heritage railways has been discussed many times on NP, and the general opinion seems to be that there are much more cost efficient methods of fundraising/company structure.
Perhaps this is just the SVR adjusting the shareholders benefits to match their true value and perhaps it could have been communicated in a better way, but I would class it as good financial management and would expect other railways to follow suit if they haven't already done so.

The term freeloading is your own opinion and has not been mentioned by the railway, nor has the railway accused anyone of such behaviour. It is disingenuous of you to suggest that they have.

 

There's two versions of the Silver: Third and First. The basic Gold pass I seem to recall allows for free parking as well. The high ratings of Gold offer addition benefits such as discounts on train hire and footplates etc.
Also it's not up to four, it's up to three guests. If pass is a joint shareholding, it's 3 plus the two names on the pass.

 

Thanks for the further information - the additional benefits you mention probably makes it even more important to make sure that all the benefits are proportional to the shareholding.

 

Yes, the lack of a Waiting Room at Bridgnorth has always disappointed me. The larger space for the shop will also allow for a better layout as the existing shop is rather cramped.

 

Having raised the shareholder matter via 'Teams', the SVR's internal forum, and had a reply from the GM, the situation as I see it is that;

• The Silver Pass (the lowest level for unlimited travel) has been at £1200 for 11 years. A single adult annual Loyalty Pass is currently £125. If the travel benefits are in lieu of a share dividend, then that's equivalent to around a 10% return on your investment per year. Other levels of shareholder benefits and Loyalty Pass are available. This doesn't take into account the many people who bought their shares less than 11 years ago, or that the shares can not be cashed in.
• If the Silver Pass had increased at £40 per year for 11 years, no one would have complained as that is well below the cost of a Loyalty Pass and the SVR would have had a steady income as shareholders gradually topped up. £400 in one hit means the railway missed out on that steady income and will likely miss out on future income as shareholders refuse to pay what is perceived as a big increase. We've missed out on a win/win and gone for a lose/lose.
• To quote the letter sent to shareholders, "we have given away 25% of our ticket sales free of charge. This has cost the railway £272087 year to date in 2021...", with many shareholders taking this to mean that they are being accused of freeloading. It turns out that less than half, about 46% of those free tickets went to shareholders and about 2% to working members. About 36% of the 'free' tickets went to Annual Loyalty Pass holders. Any sort of annual pass or season ticket is effectively a deal where the buyer gets the tickets at a bulk buy discount and the seller get a lump sum up front at the start of the season. Counting those tickets as 'free' is a bit misleading.
• Shareholders won't immediately lose their benefits, they will gradually drop down the tiers quicker than they expected if their shareholding remains static while the thresholds increase. So, for example, a current Silver Pass holder will still get 8x1st class tickets for two years (assuming it's a £400 increase again), followed by 4x3rd class the following year, and so on.
• In my opinion, what is a reasonable price rise in line with inflation over 11 years has been turned into a PR disaster by the way it's been announced, particularly for those who bought their shares to support the Bridgnorth development and are now being asked for another £400+ before that job's even finished. I think the nearest thing to a solution would be to change the warning that the thresholds will increase again next year to a promise that they won't increase for three years. I doubt that will happen though.
• I've got no special inside information on this and I'm definitely not involved in any decision making. I'm an SVR volunteer, not a shareholder. 'Teams' is the SVR's preferred means of on line communication with volunteers. I'm just the one who went on there and put my head above the parapet to ask the questions.

 

Yes, thanks for that. I did read some of the exchange.

Fundamentally, the letter was not well worded (reminds me of a recent NBI aimed at the volunteers recently...).

 

I agree that this is a communication issue rather than a problem with the decision itself. To suggest that a particular level of shareholding should entitle a lifetime of the same benefit is a little ludicrous and nothing I have seen suggests anything more than a sensible uplift of levels taking into account the passage of time since many of these benefits last altered.

I do agree that the insinuation of shareholders as freeloaders (not stated, but I can see the insinuation) isn't great. As with the photo charters issue, it would have been sensible to say 'really sorry about this, but we don't have a choice because...'.

Sent from my SM-G770F using Tapatalk

 

Considering how slick and professional the SVR's communication usually is, it is striking how poor the communication on this and the photo charters has been.

 

I think that depends on who wrote it. Having seen who wrote it, I can see where the problem is.

 

I have been a member of the SVR for about 30 years. I purchased shares in 2012 (?), which was supposed to be for improvements to Bridgnorth Station (including the café) and 4930. It was a surprise to discover that they needed a second share issue in 2016 for Bridgnorth café. I purchased just enough shares to get a Gold pass. Since then, the only times I have made use of the free travel has been at the Open House weekends (used to be called "Members and Shareholders Weekends"), plus I always make use of free parking at Kidderminster when I visit. When I have visited for galas I have always purchased tickets, albeit at member rates. I have not used members discounts in shops as I wasn't aware any was given.

I now live further away from the SVR than I used to, so opportunities to visit are more limited. My last visit was for the 2019 Autumn Steam Gala. I purchased a ticket for the 2020 Spring Gala, but this was cancelled due to Covid. I have not been since due to the policy of not allowing single travellers, therefore I have not contributed to the £270K shortfall.

I was aware at the time I purchased the shares that the benefits would be reviewed, and fully intended to "top up" my shareholding to retain my current level of benefit. I am surprised at how this has been done - I would have thought a smaller increase more often would have been better rather than the huge jump that has been announced. To keep my current level I would need to purchase 1,000 shares between now and the end of 2021 and a further 1,000 shares in 2022. That's £1,000 a year. Am I going to? I suspect not.

 

To be honest, I suspect (and I'm an SVR shareholder, though not at a lofty enough height to worry about any of this) that they're hoping you (and others) won't, not that you will.

If anyone does, then happy days, they've brought in the money and will cover the package, but the more people that don't, the less they have to honour.

Meanwhile, the engine shed appeal is proving that they can raise large sums of money pretty effectively thanks very much without needing to offer much in return, so why wouldn't they start to think it was worthwhile tapering away shareholding, with all its associated expense?

 

daveb, this is exactly where I think it has all gone wrong. If you had been required to top up by £100 a year since 2012 to keep your shareholder benefits, I dare say most would have paid that. After all, it's still cheaper than buying an annual pass and the railway would have got the extra £1000 bit by bit.
While asking for the full £1000 in one lump after 10 years is actually better for you financially and worse for the railway (that money has been earning interest in your bank account, not theirs, for 10 years) the way it was worded and presented gives the opposite impression and will result in both sides losing out.

gwralatea, I can't help thinking that that was the intention all along as well.
One possible side effect of this is that there may be a flurry of unofficial share dealing.
For every shareholder who decides to cut their losses and bail out by selling their shares for whatever they can get, there may be another who wants to try to stay in the tier they're in by buying them up at a knock down price.

 

From memory, 2012 was the controversial 'Steamworks' share issue which only raised about half the intended total. 2017 was a follow up share issue after the Heritage Committee had produced a more sympathetic design. I have a feeling that the Board may have decided not to modify the benefits between the two to try and encourage further investment in the second issue. Of course the 2017 benefits were frozen for at least 3 years, so suddenly benefit levels haven't changed for 10 years or so and it comes as a great surprise to everyone.

In my case I drop back from Gold Pass to Silver First Class. I certainly use the pass a lot, but there is obviously no reason for me to pay £1,000 a year just to keep the free parking benefit. Anyone with an 'entry level' silver pass who has lost the unlimited travel could pay £400 a year to retain it, but it would be cheaper to buy an annual Family Pass instead.

 

It would be cheaper for the railway too. Not for the first time (and it's why I think the railway has survived to the extent it has) in the 40 years I've been alive - and I started volunteering at Kidderminster when I was nine* - I suspect that it's actually doing the right thing in terms of finance, but breaking more eggs than necessary in the process. Will be worth looking back on this from 5/10 years time, I suspect - though obviously it's no more than guesswork - that they'll be proved right.


*I include this because over that length of time I'm absolutely not an uncritical fanboy of the line, and I know as many of the horror stories as anyone else.

 

While a number of shareholders have commented on changes to their benefits, nobody has yet mentioned the financial results which I think have some bearing on the Board's decision. I emphasise that what follows is my personal view from reading the accounts – I do not speak on behalf of the railway.

The PLC is essentially a 'not for profit' organisation, so year on year the accounts normally show little or no profit regardless of turnover. In 2019, the last year of 'normality', the turnover was £8,264k. The reported profit was £287k, although that was after £190k of costs of overhauling Company-owned Hagley Hall were capitalised rather than written off as they would have been for other locos (ie effectively a profit of just £97k, in line with the expected 'break-even' result).

In 2020 the turnover was down to £3,010k. Despite a massive increase of some £2.5m in 'other income' such as grants and donations, there was still a reported loss for the year of £461k after £78k on Hagley Hall was capitalised (ie effectively a loss of £539k). At the year end the cash position was very healthy with £2.1m in the bank. However in addition to grants and donations received, a large part of that was down to the £1.5m Coronavirus Business Loan taken out by the railway which will have to be repaid in 5 years starting October 2021 and which is subject to interest at 3.99% over HSBC base rate, a considerable extra overhead which has to be borne for some years to come.

I don’t imagine the 2021 result will be a pretty picture either. The Board is having to make some very tough decisions to secure the railway's future.

 

That's the position I'm in as well, although I hardly use the pass these days. Certainly paying £2,000 to keep free parking in 2023 is something that isn't going to happen!! I also have a "gold medallion" in a box which, apparently, remains the property of the SVR. It will be interesting to see if they ask for it back.

 

You used to be able to use the medallion itself as a permit to travel. If that was still allowed then they would potentially have to recall it and issue a silver one instead. However it isn't, therefore it is now just a souvenir of the contribution you made at the time you made it. One would hope that the SVR would treat it as such and save themselves expense and hassle of changing it. Not that I'm remotely concerned either way...

 

Agreed, and a right call with respect to the FB group as well.