Sark Shipping’s positive forecast for 2022
The Isle of Sark Shipping Company Ltd (IoSS) has released its latest update covering January to March 2022 and the financial year to date. The company really took on board comments from Sark residents that communications could be improved when the Island’s government attempted to force the IoSS’s board of directors to resign in 2020. In doing so, the company have published at least quarterly updates since June of last year whilst within the Executive Summary, engagement is encouraged and welcomed by the IoSS:
‘The pandemic is still impacting the business albeit in some aspects with a positive effect. The coming season maybe a bit of a learning process, therefore any feedback relating to any aspect of the service is more than welcome; if not essential. We are always happy to discuss your ideas or concerns either by phone or a call in to the office.’
This summary furthers that the company’s financial performance continues to be encouraging for quarter one and the year to date as well as being better than budgeted. The section also adds that, for January and February only as the March Profit and Loss Report would not have been available until only just recently, revenue was £53,000 ahead of the budget whilst costs were £50,000 less than budgeted. However, additional costs for both vessels, the Corsaire de Sercq and the Sark Venture, are likely to not come through until at least March which still needs to be factored in. The summary continued that:
‘From a cash-flow perspective; at the end of March we had £187K in the bank and we are at the turning point where cash flow starts to turn positive.’
Before adding that the number of passengers carried by the IoSS for the first quarter of 2022 is positively ahead of forecasted figures whilst passenger revenue is also ahead of budget. However, yield (revenue/volume) which is a standard measure of performance within the transport industry, is lower than budgeted. The reference to yield within the recent update confirms that:
‘Plus or minus changes in yield can reflect any changes in the mix of passengers (adult child ratios), market sector changes, or revenue dilution through commission or discount. An increase in volume whilst maintaining yield is generally a positive result. The decrease in YTD yield 2021/22 in comparison to same period the previous year is related to an increase in the number of children travelling, the £16 Sark originating day trip in addition to the £12 Christmas offer plus the special offer short break staycation rates continuing into March.’
The summary then furthered that cargo revenue and volume are on target for that which was budgeted though unfortunately this is slightly behind previous years.
The managing director, Yan Milner, confirmed that the report has discounted the year 2020 in its comparatives as the trading year had essentially been wiped out by the global pandemic. The update continued by comparing the passenger volume (legs) by ticket type for 2019, 2021 and 2022 before completing similar for the year to date.
This chart shows positive growth from both 2019 and 2021, though 2021 does show some of the impact of the second Bailiwick-wide lockdown which took place across some of the first quarter of 2021, however, it does instil confidence in the tourism market for the 2022 summer season. The report continues by displaying the passenger volumes (legs) by months – January, February and March and adds:
‘The impact of the pandemic restricting travel outside of the Bailiwick has had both some benefits and negative impacts. The easing of border restrictions increased visitor day trip numbers for October whilst the nervousness regarding international travel kept “Staycation” levels higher than average and both factors contributed to a 18% increase over the average and double the 2020 volume over the October to November quarter. January and February produced an average number for the months and March volumes were better than both 2018 and 2019. Increased day trip numbers from Sark have contributed positively to the volume results. Overall both the Jan to Mar quarter and the year to date had a significant volume increase of over both previous year and 5 year average.’
Revenue has shown significant affirmative increases for the year to date against 2020 and 2021 although both of these years were negatively affected by the pandemic which may have impacted on the yield over the past few years.
The document then continues by addressing cargo/ freight for the first quarter of the year and then for the year to date again; whilst already reported that this aspect is on budget but lower than in previous years, the report adds:
‘The base cargo tonnage is at a similar level to that experienced in the early 2000s. The introduction of the land reform act allowing properties to be bought and sold is likely to increase the shipment of materials for building and renovation which may increase volumes over the next 24 months. Various other infrastructure repair projects and the introduction of recycling are also likely to increase the base cargo volumes.’
The ‘Sales & Marketing’ section confirms that there has been the IoSS standard advertising and promotions throughout January, February and March, and that promotional discounted fares will continue throughout the season whilst working alongside Sark Tourism.
The next section includes an update on the fleet and operations, with the Sark Venture and Sark Viking operating normally. However, unforeseen issues with the fendering on the Corsaire de Sercq have been identified to which a solution has been found and appears to be working. The Corsaire is operating reliably, it has been confirmed to be using less fuel than the Venture for a round trip and has received positive customer responses.
The ‘Operations’ section adds that the availability of qualified crew is becoming more of an issue though the company is in the process of training three engineers to boat-masters, but this does take time.
The summary then adds that the £16 day return special fare for Sark departures has increased in the volume of passengers as well as the discounted medical fare with 191 residents having travelled on the scheme. The company has been working with Herm and Brecqhou whilst there are 34 excursions booked out of 80 cruise ship calls into Guernsey. Two ‘red flags’ highlighted: the two operators on the Herm route where possible price competition may add pressure to IoSS to reduce fares to maintain its market share, and the increase in fuel costs; 18 months ago, it was less than 30p per litre, now in excess of 80p per litre. Objectives for 2022 confirmed that a single vessel will be in use for each rotation with the Venture being added where required, whilst current fare levels will be retained, and:
‘The continuing impact of the pandemic on the Guernsey tourism market into the 2022 season, Brexit, and changes to travel habits mean that IoSS will take a cautious approach to the 2022 season.’
The update can be found at: Isle of Sark Shipping whilst a preview at the April volumes show that there is plenty to be positive about when looking forward to the 2022 season. Congratulations are surely now due to the Isle of Sark Shipping board, management, crews and support staff.
This article first appeared in the Sark Newspaper : May 6th 2022