OYSTER YACHTS: THE STATE OF THE ART

The year 2024 marks a decisive turning point in the revitalization process of the Oyster Yachts brand.
Forecasts speak of a return to the last as early as this year

For Oyster Yachts, the UK’s leading builder of blue water sailing yachts , 2024 will be a pivotal year in the brand’s revitalization and redevelopment strategy, which began in 2018 with the acquisition of the company by entrepreneur (and Oyster owner) Richard Hadida.

After the initial investment of 6 million pounds to save the yard, Hadida has worked hard over the past five years to reorganize all the company’s activities, improve the product range, make the production facilities more efficient, and improve customer service with a global service network.

Having overcome the difficulties imposed by the pandemic, which inevitably produced a slowdown in the revitalization strategy, Hadida has since invested £14.5 million to support working capital, new model production, and the ongoing rebuilding of the brand.

All these investments now form the premise for Oyster Yacht Holdings (OYH) and its subsidiaries to return to profits for the current year, supported by a solid order book, an efficient production system as well as the success of theOyster World Rally which, as Ashley Highfield, CEO and former president of Oyster Yachts, is keen to point out, has already sold out in terms of participation for the 2026-27 edition and promises big numbers for the 2028/29 edition as well, for which the shipyard has already announced that only 30 participants will be admitted.

Unique to Oyster, the Oyster World Rally is a circumnavigation of the globe covering an impressive 27 thousand nautical miles, 27 countries and 16 months.
The initiative, exclusively for Oyster owners, includes personalized assistance by Oyster’s logistics, technical and concierge staff for the duration of the crossing.

The Rally has a direct positive impact on Ouster Yachts’ order book, as many of the participating boats are specifically requested by the shipyard to participate in the event.
In fact, for the 2026-27 edition alone, 16 of the 32 participating boats have been purchased to participate in the initiative.
Similarly, the shipyard has built 11 of the 22 boats that will take part in the 2024-25 edition.

“The 2028-29 edition of our World Rally ,” explains Highlight. will be open to 30 participants and, to date, 9 boats have already confirmed their presence.
This number, which is still small, is closely related to the difficulty of some marinas to accommodate the boats, but we are nevertheless considering the possibility of promoting new rallies of which, however, we prefer not to give any advance notice at the moment.”

The prospect of a return to profits for the current year was highlighted in a recent company note, based on the latest financial data for January 2024, and filed by Oyster Yachts at the conclusion of the fiscal year on March 31, 2024.

Highfield confirms an increase in turnover in the first quarter of 2024 to 56.4 million pounds compared to only 20 million pounds recorded in the first year after the acquisition.
Added to this are:

– A 29 percent increase in revenue to 56.4 million pounds compared to 43.6 million in fiscal year 2021-2022;

• A gross profit of 1.5 million pounds in FY 2022-23 versus 5.4 million
  in FY 2021-22 (-72%);
• A post-investment operating loss (£16.8 million) in FY2022-23 accounts compared to £8.8 million in FY2021-22, down 91 percent from the previous year;
• An EBITDA ratio of 15.1 million pounds for fiscal year 2022-2023 compared with 7.6 million (-98%) in the previous year;
• A liquid balance of 3.5 million pounds in FY2022-2023 compared to 5.6 million pounds in FY2021-2022 (down 37 percent).

Highfield emphasizes the company’s commitment to implementing a strategy to support the 2024 budget forecast along with major efforts to improve results, profit margins and EBITDA ratio for the next five years.

The recovery path undertaken by Oyster Yachts since its acquisition by Hadida (unfortunately slowed first by the pandemic, then by the conflict in Ukraine) also includes new, strategic partnerships and a targeted price increase of models currently in production.

As for the latter, Highfield estimates an increase of about 5 percent in the last six months, which could be followed by another smaller increase in the months ahead.
Increases due to old problems in the supply chain and recent inflation levels.

Another important aspect concerns margins.
Between 2021-2022 and 2022-2023, these plummeted from 12 percent to 3 percent due to a whole series of procurement issues that lengthened construction time, extraordinary expenses to support brand revitalization, and related administrative costs.

“As far as margins are concerned,” Highfield explains. our goal is to increase them by 10 percent this year and then achieve an overall increase of 30 percent.
We also aim for a significant increase in EBITDA estimated at a few million.”

Important in this regard has been the investment of about £10 million put in place between 2022 and 2023 that has enabled the company to significantly expand its facilities, staff and support services.
Further investment will probably be needed, but what is certain is that we are looking at a huge brand revitalization project, generously supported by Hadiba.

In addition to the nearly £6 million spent to acquire the company in 2018, Hadiba has in fact invested an additional £14.5 million and secured further contributions to support the creation of new models and infrastructure.
Hadida’s ownership of the Oyster Yachts brand is structured through Oyster Yachts Holding, which owns more than 50 percent (but less than 75 percent), with the remaining stake held by Victory Jack Ltd, also owned by Hadida.

As for investments, these involved the three production facilities at Saxon Wharf (Southampton), Hythe Marine Park on the southern shore of Southampton Water; and Wroxham ( Norfolk).
In particular, the Saxon Wharf plant saw the installation of a new warehouse, the implementation of new lifting equipment, the creation of a new shed dedicated to painting, and the construction of new canteen facilities.

But let’s come to the range.
Oyster Yachts currently produces 6 models: the Oyster 495, the Oyster 565, the Oyster 595, the 675, the 745 and the 885GT.
Production is distributed as follows:

– The Wroxham plant has 9 bays dedicated to building the 595 and 675;

• • • The Hythe plant has 6 bays, two each for the 675, 495 and 565 models;
    • The Saxon Wharf plant has five construction bays, three for the 885 model and two for the 745.

The 20 construction bays allow the shipyard to build up to 32 units per year.
Twenty are currently under construction, seven under molding, and five in other stages of the construction cycle.
The group also conducts refit operations at the Palma plant and at the service center in Newport, America.

Oyster Yachts plans to deliver as many as 24 units during the 2024-25 fiscal year.

” Currently,” Highfield states. our order book is at 90%, and the best-selling models are the 565.
The 595 and the 675.
As for the Oyster 885, the orders we have received are for the shallow draft GT version.”

A key role in the shipyard efficiency and cost optimization program is certainly the new partnerships established after the pandemic, all based on sharing data on future orders.
The partnerships include companies such as Navico, North Sails, Hall Spars, Volvo, and Yamaha.

On the sales front, Highfield adds, “about a third of that comes from the UK, a quarter from the US, 20 percent from the rest of Europe, and 22 percent from the Asia-Pacific region. We are looking to grow U.S., especially with shallow draft versions of our models, given that young Americans are starting to sail bigger and bigger boats.”

In this context, repeat business is a very important element.
In fact, Oyster customers, Highfield explains, tend to keep their yachts for about eight to 10 years.
The absence of an entry-level model during the pandemic period and the launch of the 495 in the early 2020s have allowed them to catch up, and today owners are ready to move on to larger models.

In the meantime, Oyster Yachts’ development plans point to both the creation of new models and the revamping of existing ones, such as the Oyster 565, which was launched at the Düsseldorf show and has been a major sales success and will be followed by a new hybrid version as early as 2025.

In addition, in FY2022-23, Oyster Yachts unveiled a new Project Management Office equipped with advanced software capable of more accurately predicting lead times and making products more efficient and less expensive.

As of March 2023, the shipyard’s workforce numbered 501 employees.
To secure a future generation of skilled workers, the group has established its own academy, which, in cooperation with leading educational institutions, aims to attract young people to nautical professions.
The academy has already launched an apprenticeship program that will lead to the hiring of 15 new employees as early as this year.