Dear Boardroom Blog follower,
In preparation for our upcoming share issue our Auditors, Ormerod Rutter, completed the annual accounts earlier than normal on 19 February and this is the Strategic Report from the Report and Financial Statements which will be published before the AGM in June.
I hope you will agree it makes good reading!
GLOUCESTERSHIRE WARWICKSHIRE STEAM RAILWAY PLC
(REGISTERED NUMBER: 01576947)
STRATEGIC REPORT FOR THE YEAR ENDED 31 JANUARY 2016
REVIEW OF BUSINESS
Fellow Shareholders,
On behalf of the Board of Directors I am pleased to report
that our railway had a very significant year in the year to 31 January 2016,
not only in its financial and operating performance, but in its strategic
actions to secure a successful future.
Starting with operating performance, all key parameters were
the highest yet achieved;
·
Passenger numbers a record at 88,500 (2015
83,500),
·
Turnover a record at £1,453,919 (2015
£1,314,671),
·
Operating profit a record at £242,154 (2015
£205,571) slightly ahead of the previous highest operating profit in 2014,
·
Volunteer numbers a record rising to around 850
(2015 800). Although strictly a GWRT matter, the success of the Volunteer
Recruitment Fair in March 2015 saw a healthy increase in volunteer numbers so
vital for our railway’s development.
During the year, the railway was honoured to receive the
Queen’s Golden Jubilee Award for voluntary service and this was celebrated by the
volunteers at an award ceremony in Toddington in September.
I am pleased to report that all the railway’s special events
proved as popular and financially successful as ever, starting with the charter
trains for the Cheltenham Festival in March and ending with the Santa trains in
December, where demand was such that we again served a record number of
passengers, 9476. The charity Santa train was extremely popular this year and
this service will be repeated in 2016. Again, progress was made at developing
the smaller events, ones which bring passengers to the railway who might not
ordinarily come and, overall passenger numbers for these events were marginally
up at 10,700 (2015 10,500).
The other key part of our business model, operating the
railway almost entirely by volunteers, continued throughout the year with our
paid staff numbers remaining at 3 full time and 2 part time. This is surely
unique for a major heritage railway and allows us to invest funds from
operations and donations directly into the infrastructure of our railway.
Capital expenditure for the year totalled £407,839 (2015
£779,995 which included £530,000 spend on the 5 bridges which were the subject
of the 2014 ‘Bridges to Broadway’ share appeal). It was always planned that
this year would see us using our own funds and those granted to us by the GWRT
in moving forward in our plan to open to Broadway in 2018, and this was
successfully achieved. Great progress was made at the station itself with the
platforms and signal box being substantially completed and the framework for
the station building being erected. At the time of writing, 12 February, I can
report that the two towers for the footbridge have been raised marking yet
another milestone. Equally significant were activities on the extension north
of Laverton; the whole lineside to Broadway has been cleared of vegetation, the
significant failed culvert and landslip just north of Laverton were repaired as
were other culverts, substantial amounts of new fencing was erected and bottom
ballast laid as far as Peasebrook Farm (1 mile from Broadway) and rail laid to
Little Buckland bridge.
Our visitors will have noticed significant improvements to
the infrastructure on the running line. At Cheltenham race course platform 2
was substantially finished, at Winchcombe the Discovery coach was implemented
as a new visitor attraction and the new floor and internal pits at the David
Page loco shed were also substantially completed. In addition, work has started
on Hayles Abbey Halt, the reinstatement of which was successfully proposed by
our Heritage group, and this is anticipated to be open as a request stop in
2017.
Finally, on capital expenditure the Winchcombe model railway
coach was purchased as were two BR MK 1 coaches to support the increase in
services necessary when Broadway is once again open.
Steam locomotives are, of course, at the heart of heritage
railways and this year significant actions were taken to rebalance the steam
fleet between the needs of current and future operations. In 2014 it became
clear that the current fleet of locomotives was too large for the number of
steaming in the railway’s timetable resulting in the need for locomotives to
operate at other railways. As a result, the Churchill 8F locomotive moved to
another railway and, in addition, the partly restored NRM owned 4F left the
railway. The success of the railway’s operations this year has lead to an
increase in the number of steamings in the timetable in the coming year and, together with time
spent at other railways, will allow Foremarke Hall and Peninsular and Oriental
to re-enter the steam fleet at around the time of the Steam Gala in May.
Looking at future steam locomotive requirements, restoration agreements were
entered into with the owners of GWR 2-8-0s 3850 and 2874 and conditional
approval was given by your Board for the restoration of BR 2-6-0 76077, a long
term resident in un-restored condition on the railway.
During the year the Board approved a sealed bid offer, above
the guide price, for the site of the former Bishops Cleeve Royal British Legion
club, itself part of the former station site at Bishops Cleeve. At the time of
writing, no decision had been received by the railway on its offer.
FUTURE DEVELOPMENTS
AND PRINCIPAL RISKS
Turning to the new operating season, the indicators for your
railway’s performance are positive. As a result of increased passenger numbers
this financial year the railway will operate on 15 more days including every
Friday in August. Coach party bookings for normal running days are growing
substantially year on year with the number of bookings for the year ahead, at
the time of writing, standing at the same number as for the full year for the whole
running season in 2014. Passenger numbers for the race trains will be a record
and advanced bookings for Fish and Chip trains and Driver Experience courses
are strong with Diesel Drive courses already sold out.
In order to complete the extension of your railway into
Broadway by 2018, a new share issue entitled ‘Broadway – the last mile’ aimed
at raising the necessary £1,250,000 will be commenced in early April 2016.
Matters are well advanced in this respect. As in the successful ‘Bridges to
Broadway’ share appeal in 2014 the share scheme is under the HMRC approved tax
efficient Enterprise Investment Scheme.
Inevitably, there are risks that the railway will not
achieve its annual plan, and these centre largely around projected customer
numbers, the weather and volunteer availability. As mentioned above, volunteer
numbers rose during the year and advanced bookings are at record levels and, as
such, our annual operating plan numbers look achievable. Finally, with the
significant investment in infrastructure in recent years the possible business
interruption due to weather has been mitigated as far as possible.
Come and ride the trains on your railway soon!
ON BEHALF OF THE
BOARD
Christopher David Bristow – Director
12 February 2016
