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West Somerset Railway Operations

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

  1. Bean-counter

    Bean-counter Resident of Nat Pres

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    I would suggest that any railway which isn't the Severn Valley, with its already vast shareholder base to call on, would get nowhere near £2 million, even with an attractive 'offer' (in terms of what the money will be spent on).

    How much did that £2 million cost in terms of legal and professional fees? Printing and promotion? (all of which have to be spent before any shares are issued). Will cost in on-going admin (reduced by many being purchased by existing shareholders) and 'benefits' provided?

    Believe me, for most railway, share issues are not a good idea.

    Steven
     
  2. michaelh

    michaelh Well-Known Member

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    It's easy to say that share issues are not a good idea - but what do you suggest as the alternative?
     
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  3. Andy Williams

    Andy Williams Member

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    Share issues = Short term gain, long term pain.

    Andy
     
  4. Bean-counter

    Bean-counter Resident of Nat Pres

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    Many railways have had more success at lower cost (and hence risk) with appeals and funding applications. These are not easy, and not free, but are more likely to be able to be lead (and often fully delivered) in house, with selective use of professional advisors.

    What the Severn Valley has achieved by issuing shares is incredible and very praiseworthy but even they have used appeals as well and appeals and grant funding for the latest major project. I think that says much!

    At least one Railway has decided not to issue any more shares, even if people contact the Railway asking to buy them.

    Steven
     
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  5. Miff

    Miff Well-Known Member

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    I don’t know how in detail but the Ffestiniog & WHR Trust’s Diamond Jubilee Appeal, launched in 2014, raised £3 million by the end of 2016. I don’t know what the current total is but the original target was £8 million over ten years. The appeal website has a list of projects and indicates which ones have been completed so far:
    https://www.festrail.co.uk/appeal/projects.html
     
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  6. johnofwessex

    johnofwessex Part of the furniture

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    Thinking about it, why not do what was done in the past with Waverley & offer some 'lifetime' season tickets?

    You get what you would get with a share purchase but ni abiity to vote and fewer ongoing costs with maintenance of the register?
     
  7. jma1009

    jma1009 Member

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    Perhaps one of the reasons JJP has not instituted a share appeal is that he might allegedly want to gain a controlling interest in the WSR PLC?

    I couldn't make the Companies House register of shareholders of the WSR PLC work on my computer.

    Cheers,
    Julian
     
  8. Pete Thornhill

    Pete Thornhill Well-Known Member Staff Member Moderator

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    That’s something that couldn’t happen on the SVR, it’s written in the constitution limiting individual shareholdings to prevent such a take over.
     
  9. baldbazza

    baldbazza Member

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    Well, wasn't the Welsh Highland - all 25 miles and £30m+ of it - built largely with a mixture of National Lottery, EU grants and Welsh Assembly money, together with match funding (some given in time rather than money)?

    That's probably over simplifying it, and some of this funding is unavailable to WSR, but does demonstrate the principle that serious money can available if a good case can be made, as a regular contributor here has mentioned on several occasions.

    Not easy but not impossible.

    Barry
     
  10. jma1009

    jma1009 Member

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    That is because of Gerald Nabarro. I do hope the WSR PLC is not to have it's own re-incarnation of Sir Gerald!
     
  11. Pete Thornhill

    Pete Thornhill Well-Known Member Staff Member Moderator

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    It was indeed and I hope not too.
    I wasn't suggesting that by the way, just pointing out that an individual cannot gain a majority shareholding in the SVR. Other railways could quite easily do the same.
     
  12. AnthonyTrains2017

    AnthonyTrains2017 Member

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    So no trains to the Xmas market on the 30th Nov then. Missed opportunity maybe?
     
  13. ghost

    ghost Well-Known Member

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    On what evidence do you base your statement?

    Keith
     
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  14. Pete Thornhill

    Pete Thornhill Well-Known Member Staff Member Moderator

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    It’s only a missed opportunity if it was guaranteed to generate a profit, if it looked like the causing a loss then wise decision.
     
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  15. 60044

    60044 New Member

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    Doesn't the use of the word "perhaps" and a question mark make this a question rather than a statement? I must admit I did wonder along those lines but then again I think he'd have to be quite a very well-heeled megalomaniac to do so and risk antagonising most, if not all, of the railway's supporters. Its never going to be a Dartmouth-style line, the customer base isn't there, and it will need volunteers to survive.
     
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  16. johnofwessex

    johnofwessex Part of the furniture

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    True, BUT like a lot of things there can be 'unprofitable' parts of a business that contribute to its overall profitability.

    In this case I suggest that running a train to the event might be seen as contributing to the local economy
     
  17. D1039

    D1039 Member

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    Entirely from memory the proceeds given for the last two share offers were net of around £70k and £100k, say 5% of proceeds?

    Yes, new shareholders will cost in AGMs and newsletters and potentially lost fare income (free travel benefits, offset by additional non-fare spend). There will be a higher registrar's cost.

    I'll just make the point that significant charitable fundraising too can have costs. The Severn Valley Charitable Trust's expenditure in raising funds was £211k. It raised £851k in donations and legacies (the latter not a predictable figure). Its income generation costs were 22%, which is not comparable with share offer costs and includes spending to secure future funding (such as the £900k Lottery Funding for Falling Sands Viaduct) https://beta.charitycommission.gov.uk/charity-details/?regId=1092723&subId=0 It too has ongoing admin, and keeps in touch with its donors.

    To turn it round, why should someone donate to the WSR when the benefit (theoretically) goes to the PLC's shareholders? If you appeal to someone to have a share in the WSR, will some put in money that way that wouldn't pick that appeal donation from many?

    For the avoidance of doubt I'm not critical of any approach of any railway. A mix in funding is IMV essential. But for existing PLCs share issues have the potential for raising considerable funds and the costs need not make that route a disbenefit. And those shareholders can be incentivised to top up their shareholding.

    Patrick
     
    Last edited: Nov 17, 2019
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  18. michaelh

    michaelh Well-Known Member

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    Shareholder benefits cost nothing as they occupy seats on trains which are running anyway. Theoretically, there is lost revenue, but that assumes that said shareholders would otherwise have travelled at full fare - I think that's an unlikely scenario
     
  19. flying scotsman123

    flying scotsman123 Resident of Nat Pres

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    But one the WSR seems reluctant to accept - does the Plc still charge the WSRA for its members' free tickets/discounts or whatever it is these days?
     
  20. michaelh

    michaelh Well-Known Member

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    But perhaps that share issue means that an ongoing relationship develops with the shareholder, leading to them responding to appeals and ultimately leaving a legacy
     

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