Tough Times For MoHo Manufacturers

[Blue Knight]

Team,

There's no doubt that the various MoHo Manufacturers have been hit hard by the CV19 restrictions but judging by the newly published figures of one UK manufacturer it just goes to show that 2021-2022 is likely to be an equally tough year too.

Take a look at the annual turnover figures (released today):

Year to Aug 2019: £69,000,000

Year to Aug 2020: £48,700,000

That's a huge chunk less than the previous operating year due to CV19 and yet it still doesn't cover the most recent 9-months of restrictions.

The figures to Aug-2021 should be fairly glum to say the least.

 

[ceejayt]

Where did those numbers come from?
The industry itself would appear to have been absolutely booming in new and second hand vehicles

 

[mike mcglynn]

I was at Spinney motorhomes in Cheshire recently and the majority of the new and used vans were sold

 

[joe and sue]

Going to get worse when the market is flooded with the vans the people brought because they could not go abroad, and the get released again

 

[Blue Knight]

Where did those numbers come from?
The industry itself would appear to have been absolutely booming in new and second hand vehicles

Companies House, not Elddis, Baily or Swift....cough

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[Blue Knight]

I was at Spinney motorhomes in Cheshire recently and the majority of the new and used vans were sold

All smoke 'n' mirrors Mike from what I can see sir.

The supply and production pipeline seems to be broken so the financial health of some companies will certainly be challenged over the next few months and years.

The Business Impact statement which I've just read on Companies House (pertaining to this particular company) is very honest and basically identifies a whole host of significant issues that will damage the MoHo industry.

Dealers may be selling stock but I certainly would not wish to be one at this time.

 

[Guigsy]

Team,

There's no doubt that the various MoHo Manufacturers have been hit hard by the CV19 restrictions but judging by the newly published figures of one UK manufacturer it just goes to show that 2021-2022 is likely to be an equally tough year too.

Take a look at the annual turnover figures (released today):

Year to Aug 2019: £69,000,000

Year to Aug 2020: £48,700,000

That's a huge chunk less than the previous operating year due to CV19 and yet it still doesn't cover the most recent 9-months of restrictions.

The figures to Aug-2021 should be fairly glum to say the least.

I suspect the profit they are making per van is higher than previous years.

Going to get worse when the market is flooded with the vans the people brought because they could not go abroad, and the get released again

Prices are ridiculously high at the moment due to demand. I'm also expecting the market to crash in a couple of years when all the people that thought they'd give it a try have got bored and gone back to hotels abroad.

 

[nicholsong]

I was at Spinney motorhomes in Cheshire recently and the majority of the new and used vans were sold

They are not manufacturers, only dealers, and are selling what was produced months earlier.

It appears the secondhand market is doing well, but I am sure the 'new market' buyers are holding off, because they do not want to see £75-200K sitting on the drive doing very little, particularly if they normally tour on the Continent. I certainly am in that category, even holding off from spending €50,000 on a secondhand one.

Geoff

 

[Guigsy]

They are not manufacturers, only dealers, and are selling what was produced months earlier.

It appears the secondhand market is doing well, but I am sure the 'new market' buyers are holding off, because they do not want to see £75-200K sitting on the drive doing very little, particularly if they normally tour on the Continent. I certainly am in that category, even holding off from spending €50,000 on a secondhand one.

Geoff

Good point. Yes, it is the dealers that are doing well, not the manufacturers... Although the dealers I saw the last couple of months were worried that everything in stock had sold and they weren't getting any new stock in.

 

[Robert Clark]

The most accurate way to judge the health of a business is by looking at the balance sheet

Turnover in itself if only one indicator

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[David and Sally]

Although the dealers I saw the last couple of months were worried that everything in stock had sold and they weren't getting any new stock in.

Maybe they will find time for proper hand-overs!!!

 

[Clipgate]

The possibility of over trading and short term financing is in my view a real threat to manufacturing of all kinds in the leisure sector.
Corrections are a cyclical challenge to all is my guess.
Watch out for 2024 when true tax reforms bit!

 

[Guigsy]

Maybe they will find time for proper hand-overs!!!

I put a deposit down a couple of weeks ago on a 2nd hand motorhome in stock. I've got to wait until mid June for them to do the prep because their service department is so booked up.

 

[Badknee]

There is I’ve heard a shortage of van chassis from Fiat at the moment so that’s not going to help.

 

[nicholsong]

I put a deposit down a couple of weeks ago on a 2nd hand motorhome in stock. I've got to wait until mid June for them to do the prep because their service department is so booked up.

If you wanted it quicker you should have made dates 'an essence of the contract'

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[deleted79651]

The most accurate way to judge the health of a business is by looking at the balance sheet

Turnover in itself if only one indicator

P&L Account to see net profit; plus Source and Application of Funds Statements to see what cash has been generated and where it has gone in the business. The Balance Sheet is useful, but is only a record of the business as at a given date; in an extreme example/scam, the end of year Balance Sheet can show a very healthy picture, but, on the following day, the cash balances could be withdrawn, stocks liquidated, outstanding debtors collected, and creditors left to whistle for their money. To get a decent feel for the strength of a business, you need to look at 3 [or better still 5] years Accounts so that you can spot any massaging of figures, changes in accounting practices etc that make the business appear to be healthier than it is in reality.

Banks do all of the above [and more, such as imposing financial covenants that limit the Bank's exposure when a business begins to fail], and they still lose eye watering amounts of money, not least because the Directors know the financial covenants, but also know that when the end is nigh, they can be quicker off the mark than the Bank. Lending Banker Case Law is full of examples. A humorous example [as funny as these things ever can be] concerned the business Million Pigs Limited. The business was involved in pig farming and had a sizable overdraft limit [say £1 million] with a financial covenant that the company could only use the full overdraft if the value of the pigs was £3 million. If the value of the livestock was only £1 million, the available overdraft limit reduced to £1/3 million, so, in theory, the Bank should have been well protected and able to recover its lending from stock sales, even at 'fire sale' prices.

To monitor the Bank's exposure, the Account Manager was required to visit the Pig Farm each month and count up the number of porkers and multiply the number by the deadstock price. The number of pigs was good, the deadstock prices were robust, but the pressure on the overdraft increased each month until the inevitable happened. At the last 'stock count' of pigs, the Account Manager glanced up as he finished counting the occupants of one Pen, and saw a couple of farm labourers ushering the previous occupants of Pen 1 to Pen 3 to be counted a second time! This had been going on for months, and was only discovered because the actual stock numbers had reduced to too low a level for the 'recycling' of pigs for the repeat count to be undertaken covertly!

The Account Manager [who was one of the Bank's Fast Track Managers, tipped for a great future] discovered the fraud, reported it to Regional Office immediately, and worked tirelessly to limit the Bank's loss on the account. But his promising career took an enormous hammering ...

Steve

 

[Gerby]

What with Lockdown, Restrictions to manufacturing process caused by social distancing requirements in production areas and of course not forgetting the restricted availability of base vehicles I would be amazed if any manufacturer would be able to maintain a high level of turnover for new Motorhomes no matter how high the demand was for their product

 

[Coastal Cruiser.]

The most accurate way to judge the health of a business is by looking at the balance sheet

Turnover in itself if only one indicator

As my accountant always says “turnover is vanity and profit is sanity”, forgot how many times people have said they are doing well they have loads of work on, doesn’t mean they making money though!!

 

[SuperMike]

As my accountant always says “turnover is vanity and profit is sanity”,

To finish the phrase, "and cash is king".

 

[Trevor Wbm]

To finish the phrase, "and cash is king".

You say that, but ... we're in the licensed trade, and know a guy who is a tattooist. Businesss in both sectors that have been run by the book, often to the amusement of some of the wide boys, have received full grant, furlough and self-employed support over the last 15 months. The ones who run two sets of books, not so much.

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[tkk]

Good point. Yes, it is the dealers that are doing well, not the manufacturers... Although the dealers I saw the last couple of months were worried that everything in stock had sold and they weren't getting any new stock in.

A bit of an aside from this; I am getting a spare wheel for Moho and enquired from a large Tyre/wheel online dealer. He had the wheel but couldnt get a 225/75R16 Michelin Agilis CP tyre from any of his suppliers. it will be interesting to see if decreased production/increased demand affects this area as well

 

[Otter Spotter]

Word is that because of Covid the chassis manufacturers stopped ordering the chips for the ECUs and guess what, the chip manufacturers have moved production of chips for other industries and it’s going t9 take ages before van manufacturers start getting meaningful supplies again, hence chassis being slow to be be supplied to the MoHO builders.

 

[Tombola]

They will make it back, they cant get em fast enough as it is.
Plus the business furlough scheme and other efforts by the chancellor would have helped.

This country will come bouncing out of this dip and lets hope more and more of us spend our hard earned in this country to help it get back on its feet.
Im still lookiing forward to my USA trip in September though

 

[sallylillian]

Open in Chrome

 

[filopastry]

Strange, registrations o new motorhomes in France is up by 19.??% this year. The French market for motorhomes is booming. Same for second hand, or preferred name "preloved"

phil

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[Gellyneck]

......... But his promising career took an enormous hammering ...

Yip, Steve. Not easy to be counting on your fingers when your knuckles have been severely rapped!