How many of our Heritage Railways are in trouble?

[Flying Phil]

Well we are 8 months on from the start of this thread and there have been No heritage railway closures. In fact, several are expanding/improving in terms of facilities and length. So Yes, they could all do with more money, and some are barely existing, others are struggling but expect to survive.....but survive they will because sufficient enthusiasts and many of the general public appreciate and support our heritage railways.

 

[Meerkat]

Well we are 8 months on from the start of this thread and there have been No heritage railway closures. In fact, several are expanding/improving in terms of facilities and length. So Yes, they could all do with more money, and some are barely existing, others are struggling but expect to survive.....but survive they will because sufficient enthusiasts and many of the general public appreciate and support our heritage railways.

eight months ago was the start of the season. If they are going to go bust it is more likely in the offseason when Cashflow really starts to bite

 

[option]

Well we are 8 months on from the start of this thread and there have been No heritage railway closures. In fact, several are expanding/improving in terms of facilities and length. So Yes, they could all do with more money, and some are barely existing, others are struggling but expect to survive.....but survive they will because sufficient enthusiasts and many of the general public appreciate and support our heritage railways.

errrr...

A major line has made a large loss, & that was up to March 2019
https://www.railforums.co.uk/threads/west-somerset-railway-lost-£800k-last-year-bbc-news.195437/
They've made changes for 2020 to reduce costs, but there's still the 2019 season to be accounted for.

Or the Bluebell, up to December 2018
https://www.railforums.co.uk/threads/bluebell-railway-reports-a-loss-of-£220-000.187087/

SDRplc (retail & catering) made a loss up to December 2017, they've since become a Community Benefit Society (May 2019) & haven't got any publicly available accounts.
The owning trust, to year end December 2018, made a loss.
They had the 'missing floor' incident in June 2017. Which was then on the news in Jan & May 2018. They were fined £40k in 2018, don't know when that has to be paid. I'm sure that hit visitor numbers.



We are now entering the closed season, when for 3 months there's no income apart from Santa specials for many lines, yet they still have costs.
It's also the time when infrastructure works are more intensive, which is cash going out.


You also need to remember that any accounts you look at currently are going to be for the 2018 season/year. 2019 could well be worse.

 

[paul1609]

errrr...

A major line has made a large loss, & that was up to March 2019
https://www.railforums.co.uk/threads/west-somerset-railway-lost-£800k-last-year-bbc-news.195437/
They've made changes for 2020 to reduce costs, but there's still the 2019 season to be accounted for.

Or the Bluebell, up to December 2018
https://www.railforums.co.uk/threads/bluebell-railway-reports-a-loss-of-£220-000.187087/

SDRplc (retail & catering) made a loss up to December 2017, they've since become a Community Benefit Society (May 2019) & haven't got any publicly available accounts.
The owning trust, to year end December 2018, made a loss.
They had the 'missing floor' incident in June 2017. Which was then on the news in Jan & May 2018. They were fined £40k in 2018, don't know when that has to be paid. I'm sure that hit visitor numbers.



We are now entering the closed season, when for 3 months there's no income apart from Santa specials for many lines, yet they still have costs.
It's also the time when infrastructure works are more intensive, which is cash going out.


You also need to remember that any accounts you look at currently are going to be for the 2018 season/year. 2019 could well be worse.

2018 was a hard year for most heritage railways I think. The very hot summer weather hit visitors who in many cases hit the beach instead. The above inflation increases to the minimum wage (and maintain differentials to it) began to have a considerable impact. Most railways however are run on a not for profit basis, so its largely a case of adjustment.

If my railway its anything to go ny the crunch point in terms of cashflow is in late april.

 

[Belperpete]

Indeed North Yorkshire County Council, contributed £300,000, to the North Yorkshire Moors Bridge 30 fund a few years ago from the Council transport budget.

I think there is a big difference between supporting a capital project to improve or extend, and merely injecting cash to prop up a failing company.

Of course, there are always grey areas. It could be argued that replacing a bridge is maintenance, and the NYMR should have been setting aside money over the years to cover such things.

 

[Belperpete]

I know that one of them operates on a 'no debts' basis, so generally no long-term debts or overdrafts.

Most heritage railways are owned by charities. Charity finances are different to those of public companies. Public companies are intended to make profits for their shareholders. Whereas, in theory a charity should never make a profit, as it should be spending all the money it earns on its charitable objectives. Inevitably, there will always be some overspend or underspend. I would not be perturbed by a charity making a big loss one year, if for example it had a particularly large project to cover that year. The time to worry is when there are losses year-after-year - at some stage the reserves and borrowing ability will run out.

 

[Spagnoletti]

Most heritage railways are owned by charities. Charity finances are different to those of public companies. Public companies are intended to make profits for their shareholders. Whereas, in theory a charity should never make a profit, as it should be spending all the money it earns on its charitable objectives. Inevitably, there will always be some overspend or underspend. I would not be perturbed by a charity making a big loss one year, if for example it had a particularly large project to cover that year. The time to worry is when there are losses year-after-year - at some stage the reserves and borrowing ability will run out.

It's a bit more complicated than that. A bit of digging very quickly reveals that several larger railways consist of a Charitable Trust and a PLC. This allows, for example, the PLC to own the infrastructure and assets, but the PLC runs for-profit operations like passenger services or an engineering business. This makes the finances more complex but does mean that many assets of a heritage railway might not be at risk in the event of the PLC becoming insolvent, as long as everything is above board.

 

[Flying Phil]

As I have previously said..I remain optimistic....However I hope that we all want our heritage railways to survive and prosper for many and varied reasons.
It would be a shame if we remembered not having supported a project that fails and just stood on the sidelines saying "look at it go!". I know that many (Most?) on here do support in financial/time/etc terms, but ...."When its Gone, it's Gone!"

 

[2392]

2392 said: ↑
Indeed North Yorkshire County Council, contributed £300,000, to the North Yorkshire Moors Bridge 30 fund a few years ago from the Council transport budget.

I think there is a big difference between supporting a capital project to improve or extend, and merely injecting cash to prop up a failing company.

Of course, there are always grey areas. It could be argued that replacing a bridge is maintenance, and the NYMR should have been setting aside money over the years to cover such things.

A most selective reply Belperpete. So if the NYMR had gone to the wall on account of Bridge 30 not being replaced, what of the other businesses going to the wall too on account of the loss of passing trade/business? Equally many of the longer established lines benefited from inherited maintenance from British Rail. As most lines had been "parliamentary" lines, i.e. built to standards laid down by the act of parliament they were built under. They were then converted to "light railways" which are/were built to a lower different standard [rather like the various type of driving license]. Though as with everything else, things wear out and need replacement. The Moors had been planning/fundraising etc for the replacement and the N.Y.C.C. took the view of the "Greater Good" of the area as a whole. Could you stump up the approximate £30million a year for the area that the NYMR generate?

 

[option]

I think there is a big difference between supporting a capital project to improve or extend, and merely injecting cash to prop up a failing company.

Of course, there are always grey areas. It could be argued that replacing a bridge is maintenance, and the NYMR should have been setting aside money over the years to cover such things.

They had been setting aside funds, & did further fundraising.
That bridge replacement was a £1m job. To have put into reserves that amount, over NYMR history, would have needed £22k a year for 45 years. That's just for 1 bridge as well.

£300k from a county council? The loss in car park revenues could easily be more than that if the railway ended up being shut for a few years.


Also, the new bridge will be better designed & engineered than the original, with better materials, which will make it easier & cheaper to maintain.
That will allow the railway to put more of their own funds into future renewals, & makes them more sustainable as a business.

 

[option]

Most heritage railways are owned by charities. Charity finances are different to those of public companies. Public companies are intended to make profits for their shareholders. Whereas, in theory a charity should never make a profit, as it should be spending all the money it earns on its charitable objectives. Inevitably, there will always be some overspend or underspend. I would not be perturbed by a charity making a big loss one year, if for example it had a particularly large project to cover that year. The time to worry is when there are losses year-after-year - at some stage the reserves and borrowing ability will run out.

It's a bit more complicated than that. A bit of digging very quickly reveals that several larger railways consist of a Charitable Trust and a PLC. This allows, for example, the PLC to own the infrastructure and assets, but the PLC runs for-profit operations like passenger services or an engineering business. This makes the finances more complex but does mean that many assets of a heritage railway might not be at risk in the event of the PLC becoming insolvent, as long as everything is above board.

Which is the model for most charities that have commercial operations.
All the big charities with retail do it that way, the charity owns a ltd company that operates the shops, & the profits are gifted to the owning charity.

The railways also have funding going the other way for capital projects, as the charity is usually also a membership & fundraising organisation. They will issue grants to cover specific projects & take a charge over said project.


Belperpete;
It's not about making a loss one year, & that being funded from reserves. It's about borrowing/debt.
Charities are restricted in terms of borrowing, so you'll find that any debt is at the ltd/plc level.

There are different types of debt.
You could have an overdraft to cover the closed/winter season, but what if the open season isn't a good one & you don't pay it off? Then you increase it during the next closed season, & don't pay it off. Then you take out a loan to pay it all off, but there's nothing that's revenue producing tied to that loan. The next year, there's another overdraft, & so on & so on. That's not sustainable, & at some point someone will pull the plug.

A long-term mortgage on a premises, where you operate a cafe who's profits more than cover the loan payments, & the existence of the cafe leads to more visitors. That's sustainable.

 

[Belperpete]

It's not about making a loss one year, & that being funded from reserves. It's about borrowing/debt.
Charities are restricted in terms of borrowing, so you'll find that any debt is at the ltd/plc level.

I don't disagree with you. But one of the previous posters highlighted a preserved railway that had reported a substantial loss. I was only pointing out that this isn't necessarily a bad thing.

 

[Maybach]

The Editorial in the new (Winter 2019) issue of the Ffestiniog Railway Society's magazine makes for interesting reading:

"At the FR Company shareholders' meeting on 4 October. participants were told that Ffestiniog & Welsh Highland Railway business in 2019 has been decidedly lacklustre, with traffic on the FR, in particular, as much as 10% down on 2018 as of late September...It appears that the downturn is being blamed on the general political and economic uncertainty in the country. However, if that is true, why is traffic on the Talyllyn Railway, which is much less liberally staffed, and less ideally situated for visitors from across the border than the FR, significantly up again this year, after a similar rise in 2018?"

The Commercial & Publicity department also reports:

"The country is unsettled, the weather is unsettled, and F&WHR traffic results for the year reflect this. It has been a disappointing year...Other heritage railways are also reporting a 'topsy-turvy' year with the West Somerset Railway reporting both their worst-ever and best-ever days in the same week!"

 

[paul1609]

The Editorial in the new (Winter 2019) issue of the Ffestiniog Railway Society's magazine makes for interesting reading:

"At the FR Company shareholders' meeting on 4 October. participants were told that Ffestiniog & Welsh Highland Railway business in 2019 has been decidedly lacklustre, with traffic on the FR, in particular, as much as 10% down on 2018 as of late September...It appears that the downturn is being blamed on the general political and economic uncertainty in the country. However, if that is true, why is traffic on the Talyllyn Railway, which is much less liberally staffed, and less ideally situated for visitors from across the border than the FR, significantly up again this year, after a similar rise in 2018?"

To use a football analogy the FfestiniogWelsh Highland is a premier league side it has a turnover of around £10 million more than any of the standard gauge railways, the Talyllyn railway is a league 1 side it has a turnover of £1.7 million.
For comparison the Estimated income for Island Line (without subsidy) is around £1 million pa
Basically they are comparing chalk and cheese.

 

[Belperpete]

To use a football analogy the FfestiniogWelsh Highland is a premier league side it has a turnover of around £10 million more than any of the standard gauge railways, the Talyllyn railway is a league 1 side it has a turnover of £1.7 million. For comparison the Estimated income for Island Line (without subsidy) is around £1 million pa
Basically they are comparing chalk and cheese.

Agreed that their turnovers are markedly different. However, they weren't comparing turnover, they were comparing whether traffic was up or down.

The holiday trade in the Towyn and Barmouth areas heavily derives from the West Midlands. Whereas Porthmadog derives its tourist trade more from the North West. If the areas have been differently hit by the economy, that might explain the difference in performance.

 

[option]

But what are they comparing? There's '10%' mentioned, but thats against 2018, which could have been a very good year for the FR, & an average or bad year for the Talyllyn.

 

[Belperpete]

But what are they comparing?

The article quoted says "traffic", which I assume is passenger numbers.

 

[Maybach]

Yes, it's passenger numbers. So to put it simply, the FR has carried 10% less passengers this year than in 2018. By contrast, the Talyllyn Railway has carried more passengers this year (not sure of the actual percentage rise) than in 2018, which in itself saw a big increase over 2017. Mind you, IIRC, the TR had a very bad 2017 so is starting from a much smaller base number.

Of course, a 10% drop in passenger numbers is bad news because it also means 10% fewer people in the gift shops and 10% fewer people in the cafes.

 

[Tomos y Tanc]

The holiday trade in the Towyn and Barmouth areas heavily derives from the West Midlands. Whereas Porthmadog derives its tourist trade more from the North West. If the areas have been differently hit by the economy, that might explain the difference in performance.

Also count in the fact that costal resorts in Meirionydd have seen something of a renaissance over the past decade. Barmouth and Tywyn used to be rather depressing places with large numbers of HMOs, boarded up shops and a very faded holiday offer. These days they have a bit of a buzz about them.

 

[GWR Man]

Yes no railway has closed yet, but the Dartmoor Railway has gone into administration but Llangollen Railway has asked for a Company Voluntary Arrangement so they can try to get their house in order.

 

[Maybach]

Yes no railway has closed yet, but the Dartmoor Railway has gone into administration but Llangollen Railway has asked for a Company Voluntary Arrangement so they can try to get their house in order.

Expect the Llangollen story to be big news in the railway media over the next few weeks. In addition to the company voluntary arrangement highlighted above, a letter has gone out to all members with an immediate request for donations. Apparently, the Llangollen Railway Trust needs to raise £125,000 within the next month. They are also looking at selling two of their locos ('Austin 1' and 'Jennifer') to help raise funds.

 

[Worf]

Llangollen have sailed close to the wind for many years. I remember an AGM when it came out that funds raised by share issues were being used to fund day to day running, rather than the capital projects they were intended for. Despite criticism at the time, as far a I know, this was never properly addressed, hence the current situation.

 

[Meole]

Weardale railway up for sale ?

 

[Bletchleyite]

Expect the Llangollen story to be big news in the railway media over the next few weeks. In addition to the company voluntary arrangement highlighted above, a letter has gone out to all members with an immediate request for donations. Apparently, the Llangollen Railway Trust needs to raise £125,000 within the next month. They are also looking at selling two of their locos ('Austin 1' and 'Jennifer') to help raise funds.

Does this relate to the huge spend on the extension to Corwyn, or is that funded another way?

 

[John Luxton]

I have just received a begging letter from Llangollen.
According to the letter they need £150K not £125K as suggested above.
Are their current problems as a consequence of the fall out over the Patriot project?
As a fairly regular visitor it has been noticeable that whilst there are often many "gongoozlers" on the platform and watching from the bridge - the trains are not busy and one gala last year seemed very quiet.

One wonders what they are doing wrong?

Llangollen is certainly popular with tourists even out of season. The scenery in the area is fantastic.

Compared to say the F&WHR Llangollen is within an hours drive of Merseyside, Manchester, and Birmingham theoretically they should have a good market.

Do they need some kind of business troubleshooter?

I am not a great fan of just making donations preferring to spend money by visiting heritage lines regularly and supporting their shops and cafes - but in this case my cheque is in the post later today.

The thought of LR going bust is appalling although I am 45 miles or so away I consider it to be my local GWR line

I have been a GWR / Western Region fan since I was taken to watch the trains at Penzance Station as a toddler in the early 60s!

John

 

[MotorcycleAlan]

As a fairly regular visitor it has been noticeable that whilst there are often many "gongoozlers" on the platform and watching from the bridge - the trains are not busy and one gala last year seemed very quiet.

This is a problem nationally, as many will spend a fortune on fancy photographic gear, but begrudge supporting the very thing they are filming financially. Some even bring their own food and drink to avoid supporting the often excellent station catering. On a recent visit to the Bluebell, we were very impressed with the lunch offerings at Sheffield Park, all good quality and reasonably priced. Of course many photographers do support financially as members or passengers/diners, so please don't think I am accusing all of this.

 

[bramling]

I have just received a begging letter from Llangollen.
According to the letter they need £150K not £125K as suggested above.
Are their current problems as a consequence of the fall out over the Patriot project?
As a fairly regular visitor it has been noticeable that whilst there are often many "gongoozlers" on the platform and watching from the bridge - the trains are not busy and one gala last year seemed very quiet.

One wonders what they are doing wrong?

Llangollen is certainly popular with tourists even out of season. The scenery in the area is fantastic.

Compared to say the F&WHR Llangollen is within an hours drive of Merseyside, Manchester, and Birmingham theoretically they should have a good market.

Do they need some kind of business troubleshooter?

I am not a great fan of just making donations preferring to spend money by visiting heritage lines regularly and supporting their shops and cafes - but in this case my cheque is in the post later today.

The thought of LR going bust is appalling although I am 45 miles or so away I consider it to be my local GWR line

I have been a GWR / Western Region fan since I was taken to watch the trains at Penzance Station as a toddler in the early 60s!

John

I do wonder if Llangollen suffer a little from not having a car park at Llangollen. People nowadays like to park right at the door, and I bet this is a bit of a turn-off for some. Not that it should be as there’s plenty of parking nearby, albeit I suspect this can fill quickly at times.

 

[John Luxton]

This is a problem nationally, as many will spend a fortune on fancy photographic gear, but begrudge supporting the very thing they are filming financially. Some even bring their own food and drink to avoid supporting the often excellent station catering. On a recent visit to the Bluebell, we were very impressed with the lunch offerings at Sheffield Park, all good quality and reasonably priced. Of course many photographers do support financially as members or passengers/diners, so please don't think I am accusing all of this.

My comments were not really aimed at enthusiasts but "joe public" - there always seems to be a lot observing at Llangollen - but what can be done to tempt them on board?
Though I know what you mean about some fellow enthusiasts.
There are few times I will visit a preserved line and not travel - day is usually part riding and then photography. Couldn't be bothered travelling to a railway and not travelling. There have been odd occasions when I have stopped off at a railway when going somewhere else and have been too late or don't have the time and then take a few photos but invariably I will buy something.

 

[John Luxton]

I do wonder if Llangollen suffer a little from not having a car park at Llangollen. People nowadays like to park right at the door, and I bet this is a bit of a turn-off for some. Not that it should be as there’s plenty of parking nearby, albeit I suspect this can fill quickly at times.

The lack of parking does not seem to stop people making to the station or bridge to observe the railway. I almost always go to Carrog to park - it is free for a start and it is probably my favourite station on the line. Quite a few railways do not have parking. WHR has now lost its own car park for the new station building and even Porthmadog Harbour has relatively few parking spaces especially on days when they have a lot of coach tours arriving and departing thus people have to walk to the local authority car parks. At Llangollen the canal trip boats also seem to have been able to cope with lack of on site parking.
Perhaps more could be done to encourage "park and ride"? That large field at Glyndyfrdwy which is used sometimes for historic vehicles on gala days would make a good "park and ride" car park.

 

[Bletchleyite]

This is a problem nationally, as many will spend a fortune on fancy photographic gear, but begrudge supporting the very thing they are filming financially. Some even bring their own food and drink to avoid supporting the often excellent station catering. On a recent visit to the Bluebell, we were very impressed with the lunch offerings at Sheffield Park, all good quality and reasonably priced. Of course many photographers do support financially as members or passengers/diners, so please don't think I am accusing all of this.

I'm not a photographer, but FWIW I've eaten at the Talyllyn Railway cafe far more often than I've boarded one of the trains.