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West Somerset Railway General Discussion

Discussion in 'Heritage Railways & Centres in the UK' started by gwr4090, Nov 15, 2007.

  1. D1039

    D1039 Well-Known Member

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    The Railway Magazine October 2021 had some numbers I don't recall seeing before re WSR profits for the year, which with already published info gives the attached. I suspect this is calendar rather than financial year, i.e. from 1 January 2021. It suggests £268k ahead of budget by 31/7/21.

    On the Q&A, in 16 weeks WSR PLC have raised £41,349 in donations*, having spent £24,750 in fees for investigations following complaints. Ouch.

    The limited staff have been too busy to update its own public website, but not too busy to pursue internal complaints.

    Structures can only take you so far

    Patrick


    *excluding utility bill savings
     

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  2. jnc

    jnc Part of the furniture

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    As the top-level entity, no, for the reasons you and others have laid out. But I think having an LLC as a major piece of the puzzle (e.g. as the operating entity) is incredibly desirable, to isolate business failures (q.v. Llangollen). Ideally, all major assets should be held by a trust (which might or might not be the top-level entity; haven't thought it through - there needs to be some sort of membership body; and to keep the cats all heading in the same direction, that probably needs to be the top-level entity).

    Noel
     
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  3. jnc

    jnc Part of the furniture

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    Really? Sure looks like sheet piling to me (unless there are two different meanings to that term).

    Noel
     
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  4. flying scotsman123

    flying scotsman123 Nat Pres stalwart

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    Sorry, my point was that it wasn't special "heritage GWR" sheet piling (not that there is such a thing AFAIK)! I was simply pointing out that our Trust doesn't seem very constrained about what it feels it can spend its money on compared to Somerset.
     
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  5. 30854

    30854 Resident of Nat Pres

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    If there had been, I somehow doubt embankments at Gotherington and Chicken Curve would've presented the problems they did. "They just don't make 'em like they used to". Indeed .... and in the case of those two, thank Bob they don't!
     
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  6. Monkey Magic

    Monkey Magic Part of the furniture

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    But if I read it right still a £148,000 loss on the year to July.
     
  7. Lineisclear

    Lineisclear Member

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    In theory Yes, but the idea that it can insulate against business failure may be illusory. Lending banks, and even grant funders such as NLHF, require security in the form of a charge on assets. If the operation needs to borrow or rely on grand funding to any material extent then the assets will be at risk whichever part of the corporate structure owns them.
     
  8. RichardBrum

    RichardBrum Member

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    There is a lot of law & regulation which only sets minimum standards.
    eg. A 'small company' can submit simplified accounts, & doesn't have to get them audited. However, the regulations don't prevent a small company from preparing & submitting full accounts & having them audited.

    The regulations on company meetings set out what must be covered, & how. Again, they don't prevent you from doing more, eg longer notice period, larger quorum, etc.

    If you've got a 28 day notice period, & something major happens in that period, you can't just ignore it.


    It's also important to remember that company regulations are there for entities that don't usually ask their shareholders for more money!
     
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  9. RichardBrum

    RichardBrum Member

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    Which is why you have to be careful with 'where' you put different types of assets within the overall structure.

    Heritage carriages in a charitable trust; more difficult to borrow funds, easier access to grants, easier to raise donations (+ Gift Aid)
    Locos the same.
    Generic vans, tools etc, put them in the ltd/plc entity.


    The other obvious thing is to avoid too much general/long-term borrowing, & be careful about what your borrowing for.

    Lets compare two different lines which have borrowed;
    one has the debt against a house that is let out, & I doubt the rental income covers the debt payments.
    one has bought offices & yard, enabling them to work more efficiently/effectively. (It also clears more space for customer stuff)

    Which one makes the most sense?
     
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  10. 5914

    5914 Member

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    However, when moving away from the prescribed form and content it is important to be fully aware of the potential effect of doing so. To take an example from this post - if the Mem and Arts specify a larger quorum than the legal requirement then that is fine - but imposing a higher quorum at the beginning of a meeting would create a breach in good governance. As another example, allowing a question (and answer) that modifies the effect of a resolution could invalidate the motion by voiding the notice given to members prior to the meeting. (In a non-company setting, this can be seen where debate of a parliamentary bill can lead to the opposite outcome to the one intended by the person laying the bill before parliament. In that situation, that is part of the process of debate and resolution - however, that is not a part of the governance of a company!)

    I think that there is often confusion as to what an AGM if for - it is a legal requirement enabling the directors to report on activities to their shareholders. Not really any more (and certainly no less!). Often, people then expect them to do the work of stakeholder (as well as shareholder) engagement - which is actually something very different (and in my mid important enough to have its own forum.
     
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  11. free2grice

    free2grice Well-Known Member Friend

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    The latest news thanks to wsr.org <BJ>

    An announcement by West Somerset Railway Association:

    ''The WSRA Trustees have, with regret, accepted the resignation of Robin White as Trustee with immediate effect. Robin has been volunteering on the West Somerset Railway for over 40 years. Her contributions are many and varied and include operational duties such as guarding, signalling and acting as RO as well as serving on the WSRA board. Robin's knowledge and skills will be very much missed and the Trustees wish her well with her commitments elsewhere''.

    A very sad day for the railway.

    Good luck for the future Robin. <BJ>
     
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  12. MellishR

    MellishR Part of the furniture Friend

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    Last year I joined both the Steam Trust (as it was) and the Association to add my support to the efforts to change the course of the WSR. Following the WSRHT's determination to keep on the present course, and the WSRA doing very little visibly, whatever may have been happening behind the scenes, I have seen little reason to renew my membership of either. Robin's departure cements my opinion.
     
  13. Bayard

    Bayard Part of the furniture

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    The operation shouldn't be borrowing in the first place. Having to borrow, except in very limited circumstances like a washout or landslip, shows a lack of planning. Even if they do need a lot of money in a hurry, they can always borrow off their supporters, as the WSR did many years ago. They borrowed at a low interest rate for borrowing, we lent at a high one for lending. No money went to the banks. Not that I would be lending any money to the WSR just at the moment...
     
  14. Bayard

    Bayard Part of the furniture

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    That's interesting. It is my impression that all organisations tend to end up being run primarily for the benefit of their senior management, with customers coming a poor second and the owners (shareholders) trailing a long way behind that. I hadn't realised that it had been baked into company law as well.
     
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  15. Lineisclear

    Lineisclear Member

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    Well we'll have to disagree there. Borrowing for the right reasons i.e. to enhance and develop the operation, is a normal business activity. I've even seen auditors criticise management for failing to utilise borrowing opportunities where they would have added to the ability to secure the business and generate a surplus. It's the nature of heritage railways that large sums need to be spent when necessary (as you say they can't always be predicted or planned) and can't wait until there are sufficient funds in the bank. Adopting the "only when we have the cash" approach is a recipe for an unsustainable repairs/overhaul backlog that can easily force you out of business.

    If you have supporters who are willing to lend a couple of million unsecured then go for it. However I can't imagine there are many, if any, heritage railways in that happy situation.

    As I pointed out it isn't just borrowing that may involve granting security over assets. The same is true of major grants from bodies such as the National Lottery Heritage Fund.

    Heritage railways are in many ways like any other business. Their effective management is about the balance of risk and opportunity. Prudent borrowing can and should be part of that.
     
  16. 61624

    61624 Well-Known Member

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    "Heritage railways are in many ways like any other business. Their effective management is about the balance of risk and opportunity. Prudent borrowing can and should be part of that."

    For once, we agree on something, and there is certainly a precedent for that on the NYMR, with the opportunistic purchase of 76079 via a bank loan. I therefore look forward to hearing the news of the NYMR doing something similar again, by acquiring the High Mill building!
     
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  17. Jamessquared

    Jamessquared Nat Pres stalwart

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    I thought (open to correction) that that sort of thing (taking loans from supporters) was frowned upon now, since it was a form of unregulated financial activity (unless the company is authorised to issue bonds).

    Essentially, the two mechanisms to provide money to a railway are either as a donation (you won't see your money back, but have some controls how it is spent if you do that via a charity) or via share purchase (notionally you get something in return of value, though realistically you won't see your money back, and have less control on how it is spent).

    Tom
     
  18. 35B

    35B Nat Pres stalwart

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    I've known it done by some churches - with members remortgaging their homes to provide funds to the church. However, that again takes you into the difference between business and charity.
     
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  19. Bayard

    Bayard Part of the furniture

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    I would be entirely unsurprised if, since then, the banks have got the politicians to pass laws preventing other people competing with them.
     
  20. Bayard

    Bayard Part of the furniture

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    Well, yes, but that doesn't necessarily make it a good idea. It's only been considered normal since the 70s, when the banks, realising it would be much better for them if people no longer saved up to buy the things they wanted and instead borrowed money off them for instant purchase, set about changing the public attitude to being in debt.
    It is only better business if, by borrowing money, you can generate a return, after taking interest payments into account on that money, over the period that it would take to save the money up. Repairs and overhauls are not exactly expenditure that should not be predicted or planned. In any case, you can either spend the ten years between overhauls paying for the last one or saving for the next one. Either way, it's the same amount of money, just in one case you won't be paying interest. In any case ""only when we have the cash" doesn't necessarily involve a long wait. The WSR appeal may have been an abject failure, but other railways seem able to raise large sums of money in a very short time.
    The point is that because borrowing is considered so normal, nay encouraged, as you point out, that no-one bats an eyelid when businesses get heavily in debt, to the extent where it is impossible for them ever to pay the debts off, meanwhile the interest payments are sapping the company's profitability - reminds you of any particular railway? - but it's OK, because it's normal, everyone is doing it.
     
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