News OnTheWight always welcomes a Letter to the Editor to share with our readers – unsurprisingly they don’t always reflect the views of this publication. If you have something you’d like to share, get in touch and of course, your considered comments are welcome below.
This from Wightlink’s CEO, Keith Greenfield. Written in response to Karl Hunter’s Letter to the Editor – Wightlink’s £77m profit mystery: Did taxpayers subsidise lavish dividends? Ed
In a recent letter from Mr Hunter, the author misunderstands Wightlink’s accounts and makes some statements which need to be corrected.
The author’s analysis does not include all of our costs. Our financing costs (our mortgage) is paid by our parent company and must be included in our costs as we own considerable assets which we need to maintain and replace.
Financing costs
For example, Wightlink’s most recent new ship cost £30 million and we replace ships on average every seven years. We spend more than £5 million a year just on ship maintenance to sustain our high reliability of service (fewer than one in 100 sailings cancelled in 2022).
We also own expensive port assets such as linkspans and terminals which must be maintained and refurbished. Therefore, our financing costs have to be considered.
We pay all taxes, rates and rents that are due
Taking this into account, our audited group accounts show that that we have made losses in recent years which is why no corporation tax has been due.
We are treated by HMRC in exactly the same way as any other private business, including the other operators on the Solent. We pay all taxes, rates and rents that are due.
Vast majority of Covid support was in furlough payments
On the question of government support during the Covid pandemic, the vast majority of this was in furlough payments which were available to all private businesses including all cross-Solent ferry operators.
Department for Transport (DfT) support was given to other cross-Solent operators and private ferry operators elsewhere in the UK.
No dividends for Directors
On the question of dividends, no director receives any dividends at Wightlink as no directors are shareholders.
Business interruptions insurance
The author is correct in stating that we insured ourselves (to a limited extent) against business interruptions such as the pandemic.
This helped us to retain our colleagues without compulsory redundancies and to fully maintain all of our ships when we had little income from fares.
A highly seasonal business
Finally, the author will probably be aware that even profitable businesses can get still into trouble due to cash flow issues.
Wightlink’s income is highly seasonal and at the start of the pandemic in March 2020 we had just come through the winter season having spent over £5million on our annual refit programme.
Vital support to keep essential services to the Isle of Wight connected
There was indeed a very real risk that operators such as Wightlink would run out of cash.
For this reason, the HM Government furlough scheme, our own business interruption insurance and the DfT’s support for all ferry operators were indeed vital to keep essential services to the Isle of Wight connected.
