Brexit helps Princess Yachts become one of UK’s richest firms

Luxury boat builder Princess Yachts has crashed into the top 10 of the country’s most profitable businesses after seeing earnings rise by an amazing 114% in three years.

The Stonehouse-headquartered company, which has benefited from a weak sterling since the 2016 Brexit vote, has now been revealed as the UK’s eighth highest company for profit growth after making a £10.9million surplus. Princess is therefore, unsurprisingly, the highest ranked firm in Plymouth, and indeed the entire South West, in the 2019 Sunday Times BDO Profit Track 100 league table.

The list, now in its 20th year, ranks Britain’s private sector companies with the fastest-growing profits. Princess, which builds luxury yachts varying in length from 35ft to 130ft, saw profits grow by an average of 114% a year to £10.9m in 2017, when the most recent figures were released. In 2018, the company launched six new models and increased staff levels to 3,000 in Plymouth. And in January 2019 it topped the previous year’s stellar performance at the Düsseldorf boat show by selling a jaw-dropping £38million worth of boats in just a week.

The Plymouth manufacturer hit paydirt at the world-famous event, in Germany, where it sold 21 yachts. In 2018 the firm enjoyed its best performance at Boot Dussledorf, the world’s largest boat show, by selling 24 vessels worth £30million. But this year it topped that, in monetary value if not total boat sales. In 2017 the firm saw turnover jump 26.6 per cent to £274.4million, which represented the firm’s highest sales figure in its 53-year history.

The latest profit figures represent a huge turnaround for a company which as recently as 2016 announced a £7million loss. Princess’ advance order book totalled in excess £750million, 20 per cent higher than the previous year, in April 2018. Princess has benefited from the weakened pound since the 2016 EU referendum, as 90 per cent of its boats are exported. But the company has always denied this is the sole reason for its success and put much of it down to its investment into innovation, training and equipment, with £10million pumped into facilities.

It has also focused on heightening the quality of its yachts, enabling it to make a more highly-priced product which it has targeted at a new generation of wealthy, young customers. The company, which employs more than 2,400 people in Plymouth, has raised production from 230 boats a year to about 300, and is constantly releasing new models. But Brexit, particularly a so-called “hard” or “no-deal” egress, has potential to harm the firm, Antony Sheriff, executive chairman of Princess Yachts, said in 2018.

Princess Yachts’ executive chairman Antony Sheriff.

He told Plymouth Live the firm wanted to stay in Plymouth but warned against a scenario where the company would be stung by taxes and tarrifs. He says: “It would have to be something extreme for us to want to pull out of Plymouth. On the assumption we are not going to be tariffed or taxed out of business we will stay here.”

But he also says Brexit has the potential to cause great harm to the economy unless a deal can be struck and adds: “The unpredictability and uncertainty will weaken our position with the EU and make it impossible for any company to put plans in place. We will be isolated as a country if we don’t sort this quickly.”

That was said in mid-2018, before the current political bedlam which meant the nation missed its March 2019 deadline for leaving the EU.

This story is from PlymouthLive.