Burgess Marine, a leading UK superyacht refit and commercial marine repairer, has entered administration with an undisclosed level of losses. Around 100 employees have lost their jobs but most of Burgess Marine’s assets have been acquired by Southampton Marine Services (SMS).
The cause of the Burgess collapse was said in a statement to be “challenges surrounding the delivery of a major refit project completed in Portchester earlier this year and the payment of the final account”.
IBI understands from a source close to Burgess that this is a reference to the 55.20m (181ft), Lady A which underwent an extensive year-long refit at its Porchester yard, completing earlier this year. It is understood the refit led to a sizeable shortage of working capital which triggered Burgess going into administration.
Danny Dartnaill, a partner of the administrators BDO, told the Daily Echo in Southampton: “Difficult trading conditions and a shortfall in the company’s working capital position – contributed to by a failure to secure the final payment due in regard to a recent major refit project – significantly affected the business and its ongoing viability.”
Lady A was originally built at the Southern Cross 111 in 1986 by Nishii Zosen under the Sterling Yachts brand. She has had a number of owners and names and is currently up for sale through Edmiston with an asking price of €14m.
For Burgess the repair and refit of superyachts was one of its three core operating areas alongside commercial marine and naval work. The Porchester facility was the key facility for superyacht work where it could handle vessels up to 60m (197ft). Its facilities included a 1,000-tonne capacity synchrolift.
The group was active though other facilities in Dover, Lowestoft, Plymouth, Avonmouth, Poole, Hythe, Southampton and Cherbourg. As such Burgess was the UK’s largest independent ship repairing business. Its latest accounts to March 31, 2016 show that it lost £1.3m compared with a profit of £2.3m in the fiscal year to March 31, 2015. Group turnover to March 31, 2016 was £18.7m as against £24.8m in the year previous.
With the exception of the facilities in Portchester and Dover, the assets of Burgess Marine have been acquired by SMS for an undisclosed sum. A spokesman told IBI: “The lease on the Portchester facility has been terminated.”
In a statement they said: “SMS has acquired all the assets and works in progress of Burgess Marine who recently went into administration. Unfortunately, the facilities at Portchester and Dover will not be saved as operating costs at these sites do not make them viable and they have consistently lost money for years.”
It added: “The ship repair operations in Lowestoft, Poole and Avonmouth will continue as usual with all the current teams employed immediately and will operate under the brand SMS. Negotiations are currently taking place within the two Royal Navy bases at Portsmouth and Devonport for SMS to continue working within these high security areas and it is hoped that many of the staff previously employed on the military sites will be re-hired should SMS be able to provide the required security levels.”
SMS has also purchased the entire shareholding in Global Services and Global Newbuilds a successful supply chain company operating in the superyacht and commercial vessel market. The current managing director Richard Gardiner and his team will continue to run those businesses with Peter Morton and Chris Norman of SMS joining the Board.
Chris Norman, managing director of SMS, says: “It is always sad to see so many people lose their jobs at any time let alone just before Christmas and we are pleased to have been able to save as many as possible.”