Heritage railway financial problems.

[railfan99]

Shareholders have just received the West Somerset Railway's annual accounts for 2022-23 (financial year ended on 31 March 2023).

Unfortunately the email has just been 'recalled', perhaps because as a shareholder, I can see 393 other email addresses. These should have been in the 'BCC' section not 'CCed'. Mistakes happen.

The report does not state how many passenger journeys were made during the FY. I've noticed this with some other UK heritage railways IIRC. It really ought have a comparison.

Fare revenue rose by about 70 per cent to almost GBP1.8 million.

The loss for the FY was GBP218,000, a reduction from GBP318,000 in 2021-22. This came after the 'non-cash' item of depreciation of GBP248,000.

Directors state that trading in the period to 31 July 2023 has been better. That's a surprise given media commentary about the alleged state of the UK economy.

At a quick read - I may have missed something - there didn't appear to be any mention of the dispute re Washford station and the Somerset and Dorset Railway Trust that saw if I have it correct, the latter group 'departing' from WSR. You locals will know far more about the history of that discussion.

In fairness the WSR had to negotiate unexpected challenges such as the embankment collapse in Christmas 2022/January 2023. It did a great job in quickly restoring the line.

The CEO commented that the cost of coal is 'increasing' with every delivery. Obviously your coal comes from a variety of sources, but coking coal (and thermal coal) prices have somewhat moderated so I found this comment a little surprising. I own shares in two Australian coal companies (largely thermal, but much is Newcastle NSW 6000c quality high value). One mine in which I do not have shares (it isn't publicly listed) produces coal suitable for steam locos, as it's used in Australia for that purpose.

 

[paul1609]

Ive just bought the main part of my smokeless fuel for the coming winter. I tend to buy it at or around August Bank Holiday as its traditional for the price to increase with demand in September. I paid £612 for 1000kg this year compared to £360 last year. In the early spring when I had to buy a part load it was just under £800. I use 95% anthracite brickettes of one brand or another. All prices include 5% vat and pallet delivery to the kerbside.

 

[Fragezeichnen]

Directors state that trading in the period to 31 July 2023 has been better. That's a surprise given media commentary about the alleged state of the UK economy.

The Severn Valley Railway is currently pursuing an unusual timetable strategy. Due to trains reportedly running full and standing they have been forced to add unadvertised relief trains which are arranged(or not) on a day by day basis at very short notice.
This suggests that business is much better than expected, but that they don't have the confidence to simply increase the timetable shows finances must be very tight.

 

[paul1609]

The Severn Valley Railway is currently pursuing an unusual timetable strategy. Due to trains reportedly running full and standing they have been forced to add unadvertised relief trains which are arranged(or not) on a day by day basis at very short notice.
This suggests that business is much better than expected, but that they don't have the confidence to simply increase the timetable shows finances must be very tight.

That's very old school thinking. You cannot afford to have empty trains running. I don't have any figures for the SVR but on most heritage railways the majority of business is now prebooked. You increase the number of trains you are running when prebooking reaches a certain threshold, maybe 80% right up to the night before. The economics of steam engine running may mean that you suddenly add 3 return trips even the night before this is the way heritage railways will run in the future.

 

[Fragezeichnen]

Ah, the rollercoaster model of railway operation. What a depressing future.

You have to wonder how long the volunteers will put with being rostered for driving/guarding turns which are then cancelled the night before, or alternatively receiving late night phone calls asking if they are free tomorrow.

 

[paul1609]

Ah, the rollercoaster model of railway operation. What a depressing future.

You have to wonder how long the volunteers will put with being rostered for driving/guarding turns which are then cancelled the night before, or alternatively receiving late night phone calls asking if they are free tomorrow.

In practise at my railway you roster the core service with volunteers who don't have flexibility of dates or who travel long distance so they don't get mucked around. You staff the extras with a small core of locals who are flexible in their volunteering time backed up with multi tasked paid staff. There's an element of volunteers who wear their underpants on top of their trouser who love nothing more than rescuing the service at the last minute. You keep every one informed of the financial advantages of flexible operation. Job done.

 

[railfan99]

In practise at my railway you roster the core service with volunteers who don't have flexibility of dates or who travel long distance so they don't get mucked around. You staff the extras with a small core of locals who are flexible in their volunteering time backed up with multi tasked paid staff. There's an element of volunteers who wear their underpants on top of their trouser who love nothing more than rescuing the service at the last minute. You keep every one informed of the financial advantages of flexible operation. Job done.

Sounds sensible. You must be fortunate in having 'short notice' volunteers.

Wow: if K&ESR, SVR and WSR have all done fairly to very well over the UK summer, foreigners will have to revise their view of the UK economy

 

[Titfield]

In practise at my railway you roster the core service with volunteers who don't have flexibility of dates or who travel long distance so they don't get mucked around. You staff the extras with a small core of locals who are flexible in their volunteering time backed up with multi tasked paid staff. There's an element of volunteers who wear their underpants on top of their trouser who love nothing more than rescuing the service at the last minute. You keep every one informed of the financial advantages of flexible operation. Job done.

I think you are very fortunate that your volunteers are willing and able to deliver this flexible operating model. I know of at least one railway that has struggled with such a model but perhaps eventually the "penny will drop" that this is the way forward when operating costs are high and passenger demand varies significantly.

 

[D Williams]

The Severn Valley Railway is currently pursuing an unusual timetable strategy. Due to trains reportedly running full and standing they have been forced to add unadvertised relief trains which are arranged(or not) on a day by day basis at very short notice.
This suggests that business is much better than expected, but that they don't have the confidence to simply increase the timetable shows finances must be very tight.

Ah, "relief trains". I can remember when the big railway used to run relief trains at times of high demand. This was in the days when the railway system provided a service to the public, rather than viewing them as a nuisance. Perhaps this policy by the SVR has something to do with it now being run by a railwayman.

 

[Falcon1200]

Perhaps this policy by the SVR has something to do with it now being run by a railwayman.

Or is the SVR, due to its financial circumstances, running the minimum possible timetable but then has to add additional trains at the last minute to cope with demand?

 

[railfan99]

The Great Central Railway recorded a loss of almost GBP700,000 in the 12 months to 31 January 2023.

However trading in Q1 24 was when Direcyor cobbled together the report about GBP100,000 ahead of budget. They say GCR is expected to record another trading loss in FY 24 but also state that there's a (generous) private? benefactor.

It was terrific to attend its Steam Gala one day in September 2022. Amazing to have seven steam locos operating!

 

[eldomtom2]

I know of at least one railway that has struggled with such a model but perhaps eventually the "penny will drop" that this is the way forward when operating costs are high and passenger demand varies significantly.

We shall see if circumstances remain the same...

 

[PacerTrain142]

I think running more cheap rolling stock like pacers and 1st gen DMU’s rather than big guzzling diesel locos or coal gobbling steam engines.

Of course, steam trains attract more passengers than diesel trains but as steam trains are a lot more expensive to maintain, a lot of heritage lines have taken on pacers as a low cost solution.

The pacers saved some branch lines from closure when they were first introduced and now they could well save a few heritage lines from closure!

 

[Lemmy282]

Did Pacers save branch lines, not sure about that but they were a cheaper alternative to other units. To be honest, personally, if all that a heritage railway was running was a Pacer I would not bother visiting and paying a premium price. It might appeal to some and if there were other attractions to see it might appeal to some families, but the attraction of heritage lines to most people is steam.

 

[simonw]

I think running more cheap rolling stock like pacers and 1st gen DMU’s rather than big guzzling diesel locos or coal gobbling steam engines.

Of course, steam trains attract more passengers than diesel trains but as steam trains are a lot more expensive to maintain, a lot of heritage lines have taken on pacers as a low cost solution.

The pacers saved some branch lines from closure when they were first introduced and now they could well save a few heritage lines from closure!

Very unlikely. Most people visit heritage people for steam

 

[Mcr Warrior]

To be honest, personally, if all that a heritage railway was running was a Pacer I would not bother visiting and paying a premium price.

+1.

Others on here may have differing views, but I can't really see how any heritage line running just Pacers would be considered by the majority of folk to be an "attraction".

 

[12LDA28C]

Very unlikely. Most people visit heritage people for steam

You wouldn't say that if you'd attended the SVR's diesel gala this year. Plenty of younger enthusiasts around these days with no interest in steam.

 

[Trainlog]

I think running more cheap rolling stock like pacers and 1st gen DMU’s rather than big guzzling diesel locos or coal gobbling steam engines.

Of course, steam trains attract more passengers than diesel trains but as steam trains are a lot more expensive to maintain, a lot of heritage lines have taken on pacers as a low cost solution.

The pacers saved some branch lines from closure when they were first introduced and now they could well save a few heritage lines from closure!

I appreciate that they where a backbone of some rural routes post first gen DMUs but i reckon the public would rather go to a heritage railway to see a rake of Mk1s and a classic steam loco than to relive commuting on a Pacer especially as they where disliked by a lot of commuters towards the end.

First Gen DMUs on the other hand are passable for the general public especially in BR Green - For instance they are Comfortable, you can see out the front of them if you get the closest seats to the cab. I remember the South Devon railway ran a class 122 as the last train of the day when i visited as it was a cost effective way of doing so.

 

[eldomtom2]

First Gen DMUs on the other hand are passable for the general public especially in BR Green - For instance they are Comfortable, you can see out the front of them if you get the closest seats to the cab. I remember the South Devon railway ran a class 122 as the last train of the day when i visited as it was a cost effective way of doing so.

From my experience a decent chunk of the general public - at the moment - has nostalgic memories of first gen DMUs. The same does not apply to Pacers, of course.

 

[simonw]

You wouldn't say that if you'd attended the SVR's diesel gala this year. Plenty of younger enthusiasts around these days with no interest in steam.

I've been to many diesel galas, they don't attract the crowds steam does.

 

[LickeyIncliner]

Or is the SVR, due to its financial circumstances, running the minimum possible timetable but then has to add additional trains at the last minute to cope with demand?

Presumably the reality of running a highly-constrained railway like the SVR is that there is a maximum possible timetable (given track layout, signalling, permissible speeds etc) in which some trains are the published timetable and all others are "runs as required and if equipment/crew/etc available". The decision on whether one of the latter runs may then be made at the last minute, but if it does run the railway gets the credit for doing extra rather than criticism for cancelling a scheduled service. Not a bad strategy providing the published timetable isn't so infrequent as to put potential passengers off altogether.

 

[12LDA28C]

I've been to many diesel galas, they don't attract the crowds steam does.

I'd be very surprised if any SVR Steam Galas had attracted the number of visitors at this year's diesel gala. Car parks full over an hour before the first train, huge queues to collect pre-booked tickets meaning people even missed the first train due to the chaos and so on.

 

[Falcon1200]

You wouldn't say that if you'd attended the SVR's diesel gala this year. Plenty of younger enthusiasts around these days with no interest in steam.

Enthusiasts yes, but not the general public! And I doubt that even diesel fans would flock to a heritage railway offering a Pacer Gala (I certainly would not), the classic locos are the main attraction.

 

[Titfield]

The reality is that a diesel gala - even if it is attended by vast numbers of diesel enthusiasts - will not generate the net income (revenue minus costs) to cover even a small part of a heritage railway's year round fixed costs.

 

[50002Superb]

The reality is that a diesel gala - even if it is attended by vast numbers of diesel enthusiasts - will not generate the net income (revenue minus costs) to cover even a small part of a heritage railway's year round fixed costs.

Whereas?

 

[eldomtom2]

The reality is that a diesel gala - even if it is attended by vast numbers of diesel enthusiasts - will not generate the net income (revenue minus costs) to cover even a small part of a heritage railway's year round fixed costs.

Single events rarely do.

 

[paul1609]

Enthusiasts yes, but not the general public! And I doubt that even diesel fans would flock to a heritage railway offering a Pacer Gala (I certainly would not), the classic locos are the main attraction.

The diesel market is actually very small, a lot of the diesel enthusiasts tour the country attending the galas making it look like there's more people than there actually is. Secondary spend is notoriously low. Catering is flasks and Tesco value meals.

 

[Lost property]

The reality is that a diesel gala - even if it is attended by vast numbers of diesel enthusiasts - will not generate the net income (revenue minus costs) to cover even a small part of a heritage railway's year round fixed costs.

That sounds like a very valid point.

Did the HRA not "quietly suggest " that, maybe gala's should not be given the prominence / frequency they have when the financial returns are comparatively low.

Right, this may well upset quite a few (not the intention) but, I would suggest this hypothesis isn't far short of the mark.

Heritage railways are integral to the UK's social and historical culture, rail being part of the social fabric for many years.

However, I feel the HR sector became complacent in that enthusiasts / volunteers / benefactors and, shock horror, the normal public would "always " be there. I also feel some railways are run with people letting their "heart rule their head " when it comes to financial management or rather mis management.

Enter Covid / lockdowns and now cost of living crisis (more than one and ongoing)and the realisation, hopefully, that returning to pre-Covid style operations just isn't going to be practical for long term survival.

Just because a HR is, for many, an active hobby, doesn't mean hard nosed financial oversights and discipline should not be in place. A contributor some time ago made this very point when they said always look at the balance sheet for a true picture.

I also feel that, despite the oft stated "steam sells " which I agree, it does, the HR sector to be truly representative of rail history should start to distance itself from the arcane "steam vs diesel " entrenched factions and demonstrate how diesel replaced steam....and why, with the target audience being the bread and butter of any line...the paying normal public.

 

[bramling]

The diesel market is actually very small, a lot of the diesel enthusiasts tour the country attending the galas making it look like there's more people than there actually is. Secondary spend is notoriously low. Catering is flasks and Tesco value meals.

I’ve always wondered whether this is because many heritage railways don’t market diesels well to the average (non enthusiast) visitor. I get the feeling many such visitors feel “short changed” when they turn up to diesel, even if it doesn’t actually change the experience much. Few heritage railways seem to take much time to explain the history of diesels.

 

[Titfield]

I’ve always wondered whether this is because many heritage railways don’t market diesels well to the average (non enthusiast) visitor. I get the feeling many such visitors feel “short changed” when they turn up to diesel, even if it doesn’t actually change the experience much. Few heritage railways seem to take much time to explain the history of diesels.

It is notoriously difficult to promote product b well when you spend 95%+ of your time, effort and money promoting product a.

The meat marketing board would have a tricky time promoting soya sausages for example.