Princess Yachts financial performance for 2023 was disappointing but not unexpected with an operating loss of £45 million.
The yacht builder had a turnover of £310.5 million during the period with the operating loss before exceptional costs of £45.6 million during 2023.
The yacht builder’s accounts for the period ending December 31 2023 show an EBITDA loss of £48.3m compared to £23.1m loss in 2022.
The loss before tax was £65.3m (2022: £43.5m). The gross margin was (14.3%) compared to (9%) in 2022. At the year-end there was a cash balance of £15m.
2023 was a pivotal year for Princess Yachts with KPS Capital Partners becoming majority shareholder.
The company’s strategic report states that the acquisition followed a challenging trading period marked by a surge in demand through 2021 and 2022 which was tempered by unprecedented cost inflation and supply chain disruptions that led to loss of volume and the inefficient build of yachts.
Working capital requirements
The investment by KPS provided an initial equity/cash injection of £53.7m which supported the transaction costs and working capital requirements to clear supplier stretch and begin on a programme to recover lost productivity levels and minimise the impact on both customer commitments and on 2023 financial results.
Following the investment, the new shareholders changed the leadership team, appointing a new CEO and adding four new directors.
During 2024, the company cut support staff with cuts to production staff to follow.
“With the challenging operating environment inherited through the acquisition, 2023 financial performance was disappointing but not unexpected,” said Princess Yachts’ strategic report.
The strategic report details how Princess Yachts has continued its product development with the launch of three new boats in 2023 and has a rolling five-year programme incorporating the launch of three new models per year.
During 2023, the company spent £12.6 million on product development compared to £14.7 million in 2022.
The company has an order book in excess of £750m which stretches into into 2026 on some product lines.
“Coupled with a limited global distributor stock position at year end, Princess has a strong base from which to deliver an operational turnaround and significantly increase profitability,” said the report.
