Princess Yachts back in profit but Rachel Reeves’ Budget forces job cuts
A luxury yacht builder has surged back into profit and its sales jumped by more than £100m as hundreds of jobs were cut because of Chancellor Rachel Reeves’ Budget.
Plymouth-based Princess Yachts has reported a revenue of £378m for 2024, up from the £276.3m it achieved in 2023, according to new accounts filed with Companies House.
The results also show that the firm made a pre-tax profit of £4.9m for the 12 months, recovering from a pre-tax loss of £23m in the prior year.
However, Princess Yachts’ headcount was cut from 3,146 to 2,889 employees in 2024.
In December, chief executive Will Green wrote to staff blaming market conditions and Chancellor Rachel Reeves’ first Budget for the reductions.
In the letter, the CEO said the year had been “the most challenging commercial conditions in the company’s history” and that the Budget had “severely impacted” its recovery plan and that efficiencies would underpin a “more robust business” long-term.
Towards the end of August this year, workers at Princess Yachts won a huge pay rise after threatening to go on strike.
According to bosses at union Unite, staff secured a pay rise of 6.5 per cent.
Princess Yachts was founded in 1965 and backed by New York private equity firm KPS Capital Partners
Princess Yachts’ recovery restricted
A statement signed off by the board said: “Operationally and financially, 2024 saw greatly improved results as a direct result of the effective implementation of a number of business improvement initiatives through the year and improved efficiency of the supply chain.
“This operational improvement has been driven by a reduction in corporate layers with greater authority shifted to site leadership to emphasise target-setting and to create greater accountability across the group.
“Furthermore, the achievements in 2024 were based on a rigorous operating plan, including operational and financial targets with clear milestones, inspired by the new majority shareholder and supported by the change of executive leadership of the group.”
Princess Yachts added: “Key areas of opportunity through which to reduce costs and improve operational efficiency that were identified in the operative plan have been implemented in 2024 or continue into 2025.
“New opportunities have continued to be evaluated, identified and action upon in 2025.
“Through 2024 the group has monitored the size of the workforce and has made strategic devisions to affect the future commercial and operational requirements of the group.
“This has resulted in reductions to support staff in 2024 and reductions to production staff gradually during 2024 and a step-change in early 2025.”
Princess Yachts also said: “Despite the significant improvement seen in 2024 from 2023, financial performance remained restricted in 2024 as a result of an improved, yet stretched, supply chain, slower than expected commercial recover and the lead time associated with the implementation of ongoing strategic initiatives.
“The improvements made in 2024 will continue to deliver financial benefit in future years with early indicators suggesting continued improvement in 2025.
“Despite challenging commercial conditions, retail sales regained consistent growth in the second half of 2024 and gross profit per boat completed gradually improved throughout 2024.”