Sunseeker has described 2017 as a defining year in which the UK's biggest builder grew its profitability with investment in new product bearing fruit. According to its just filed audited accounts for year ending December 2017, revenues increased by 17% from £252.4m in 2016 to £294.7m, with underlying EBITDA approaching £6m, generating profits after tax of £1.1m. The builder also claims to have a record forward order bank, up 52% year-on-year.
Since 2015 the builder has seen revenue increase by 50%, boat units by 30% and employees by 25% - head count now stands at just over 2,500, and the builder is continuing to recruit to support demand.
A significant change in product mix drove an expected reduction in average contribution margins as the company concentrated on re-establishing the brand in smaller size segments – the Manhattan 52 and Manhattan 66 are spearheading that drive and are now sold-out until late 2019. The £50m investment programme announced 18 months ago will continue at the same pace over the next 3-4 years with the launch of a new 74 Sport Yacht due in the Autumn to follow the unveiling of the new Predator 50 and Predator 74 at Dusseldorf in January. The builder launched four new models last year and five in 2016.
“2016 was the last of the turnaround years. 2017 was about moving into a period of growth and stability where we became cash neutral,” CEO Phil Popham told IBI this morning, adding that 2018 would see the business becoming “cash generative” enabling it to fund future growth “quite comfortably” by reinvesting returns in new product development. As for its plans to develop smaller boats with Red Bull Advanced Technologies, there will be more news on that in the Autumn. Similarly it’s likely to be toward the end of the year when it will reveal more about its expressed desire to potentially build larger superyachts.
Popham stated: “I’m delighted with our performance, especially given the substantial investments we continue to make across the business. We are now reaping the rewards of this but it is vital that we continue to invest in product and infrastructure to build an even stronger future. Our product plan for the next five years absolutely reflects this, we now have one of the youngest product line-ups in the industry with some very exciting additions still to come.
“Contracted and deposited sales for 2018 and 2019 have once again significantly improved compared to the same period in 2017. We are 100% sold-out for 2018 and we are already 50% sold for 2019 which is a record for the business. As we develop new products across the size range, we will also see a substantial growth in our profitability, providing the investment for our ambitious plans going forward.”
Popham said Sunseeker was keeping a “close eye” on the escalating trade war between Europe and the US, but that it was hedging against the risks, adding that its business to the Americas now stands at 35%, up from 25% the previous year. Its export business is roughly split a third between the Americas, Europe and Asia and the Middle East respectively, with the builder having reduced its reliance on the Mediterranean in recent years – that region had once absorbed 50% of Sunseeker sales. According to Sunseeker, expansion of its global dealer network has been key in supporting continued revenue growth with representation of 120 retail and service locations in 74 countries. Additions to the retail infrastructure has helped strengthen the brand in growth territories such as Asia and the Middle East and the development of the retail network will continue as the business looks to better balance sales geographically.