007's yacht maker Sunseeker struggles in choppy waters

Sunseeker International, a leading supplier of luxury motor yachts favoured by the super-rich, has slipped to a full-year loss following the costly rescue of a key distributor and a downturn in demand, reports the Financial Times.

The Poole-based company saw turnover rise from £293m to £303m in the year to July 2009 in a "record-breaking year" as sales of its larger models - often ordered up to two years ahead of delivery - continued to increase.

But the company, backed by Lloyds Banking Group's Bank of Scotland, was forced to absorb exceptional costs of £6.8m to tackle financial difficulties at one of its distributors in order to "protect the Sunseeker brand and the commercial interests of Sunseeker International".

A trading loss of £1.9m combined with the exceptional charge of £6.8m saw Sunseeker fall into an operating loss of £8.7m, and a pre-tax loss of £9.1m compared with a pre-tax profit of £17.8m in the previous year.

In spite of pressures on trading caused by the downturn, Sunseeker continued to invest during the year, spending more than £9m on capital expenditure, including £6m spent on moulds to produce new motor yacht models. It also completed a new deep water dock at Portland in Dorset to expand production capacity.

Robert Braithwaite, managing director and founder of the family-owned company, said: "As we weather this storm of global uncertainty, Sunseeker will endeavour to build on its firm foundation as one of the world's most sought-after products."

Gross profit margins also fell by 5.3 percentage points to 11.1 per cent as Sunseeker was hit by volatile exchange rates and was "affected by actions taken to sustain the business through extremely difficult trading conditions caused by the economic downturn".

The move into an operating loss for the year prompted a breach in banking covenants. But the company continued to operate with the support of its bank and subsequently secured additional medium-term facilities.

The trade and certain assets of Sunseeker Sales Group, now named F&M Sales Group, have been acquired by two other Sunseeker distributors, according to accounts signed off by Grant Thornton in December and issued by Companies House last week.

Sunseeker is one of the top names in the UK's £3bn luxury yacht market, alongside Fairline, Princess and Sealine.

In January, Fairline admitted it had suffered a 40 per cent drop in orders for ocean-going boats,which range in price from £225,000 to £2.5m,

During the year Mr Braithwaite sought to avoid job cuts forced on rivals such as Fairline by trimming production of smaller yachts and seeking to build market share in bigger yachts, such as its £11m Predator 130.

Sunseeker motor yachts, the bulk of which are exported, have featured in recent James Bond films The World is Not Enough , Die Another Day , Casino Royale and Quantum of Solace .

Former James Bond actor Sir Roger Moore is among Sunseeker's customers.

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