Boat builders were toasting the Brexit vote with champagne at the opening of the London Boat Show as the collapse in the pound since the June referendum has “super-charged” sales of British luxury yachts to wealthy foreigners.
Bosses of British yacht companies said sales had increased as much as 50% in the second-half of 2016 compared with the previous year because of the “Brexit discount” to overseas buyers.
Russell Currie, managing director of Northamptonshire-based Fairline Yachts, said his company – which was bought out of administration by two Russian investors less than 12 months ago – had sold a record 66 boats in 2016 due to aggressive marketing of the cost advantages of buying Brexit Britain boats.
“At US boat shows, we made sure the buying public knew that we were pretty much 15-20% cheaper than this time last year,” he said. “Britishness and quality has always appealed to overseas buyers, and now we are also very competitive on price.”
Currie said Brexit was helping several British boat builders push into the US market, where about 80% of the world’s boats are sold, and also closer to Europe. “The Cannes boat show in September was the most successful in Fairline’s entire history,” he said.
The London trade fair also got off to a good start with Currie selling “three boats over a beer last night”. Currie, who took over as managing director following the company’s purchase by Alexander Volov and Igor Glyanenko last January, said sales were strong across the firm’s whole range, with the largest and most expensive boats attracting more interest than in previous years.
The company has so far this year sold two of its biggest 78ft motor yachts, which sell for £3m before added extras, to French and Italian buyers. Currie, who commutes from his family home in Majorca to Fairline’s offices in landlocked Oundle, described most of his customers as “discrete self-made business owners”, although the unnamed Italian buyer doesn’t quite fit the brief.
“Believe it or not he uses it as a tender to serve his even bigger boat. Quite often if you have a superyacht you can’t get into smaller bays to enjoy swimming so to have a tender, albeit a 78ft tender, is more helpful to access those areas than your twin helicopter deck superyacht,” he explained. “It’s actually the seventh Fairline Squadron 78 the family have bought.
“Not seven at one time,” he adds. “But they like to refresh it.”
Convincing existing customers to upgrade to the latest model is key to success in the boat building industry. Antony Sheriff, executive chairman of Plymouth-based Princess Yachts, said he has to keep reminding his shareholders (including LVMH, the luxury goods group) why the company sells small boats when the big profits are made on its 40-metre superyachts, that sleep 12 guests.
“Shareholders ask why we are building small 39ft boats, they need to understand that it’s addictive,” Sheriff said. “They [customers] may start with a 39ft boat, but then they get addicted to boating and to buying. Eight boats later the family may buy a 30-metre boat, that starts at £6m, and then on to the 40 metre.”
Sheriff said Princess’s sales had been “supercharged by the announcement of Brexit”, with revenue up 20% and gross profit 50% higher in the last six months of 2016 compared with the same period a year earlier.
“There is a lot of overseas interest, particularly in bigger boats,” he said. “Our forward order book is fantastic, and we expect a very strong 2017 with seven new models to be launched.”
Sheriff, who was previously managing director of supercar maker McLaren Automative, described his customers as “very wealthy people with a passion for boating”. He said demand was fast growing among Middle Eastern buyers and people from eastern European countries.
Sunseeker London, which owns the rights to sell Sunseeker boats across the UK and the Mediterranean, said its forward order book was 40% higher than normal due to the fall in the pound.
“Brexit has given us a great advantage, and it’s also making it difficult for our competitors,” David Lewis, group managing director of Sunseeker London, said. “If you take Italy, which is one of the largest producers of motor yachts in the world, we now look equal or better quality but at a much lower cost.”
Lewis, 70, said it had become easier to sell the biggest boats because “the world is wealthier than ever before”. Sunseeker, whose boats have featured in every James Bond film since the opening credits chase up the Thames in The World is not Enough, recently launched a £17m yacht spanning 131ft (40m) that is too big to fit in the ExCel London exhibition centre in Docklands. “Progression is only to bigger and bigger yachts,” he added.
“We’re very lucky we get about 60% repeat business, so what we’ve always tried to do is bring out new models and encourage upgrades. We have made it possible to take part-exchanges even at the highest values – last week we sold a 131ft boat, by taking in part-exchange an £8m boat.”
Lewis declined to provide any details about the buyer of the five-cabin boat – which requires a full-time crew of at least five people, including a captain demanding a salary in excess of £150,000 a year – other than saying he was an American spending his vacations in Greece. “It’s confidentiality,” he said. “We know more about our customers’ private lives than probably their families do.”
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