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Brittany Ferries: 'Brexit has blurred our future'

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From Le Telegramme: http://www.letelegramme.fr/economie/brittany-ferries-le-brexit-a-floute-notre-avenir-08-10-2016-11246274.php (apologies for the Google Translation!)

 

Brittany Ferries: 'Brexit has blurred our future'

 

The Brexit and fall of the pound has not deterred Britons go on holiday on the continent. That is the conclusion of Jean-Marc Roue, President of the Supervisory Board of the Brittany Ferries and Christopher Matthew, the new chief executive. They speak of a better season than last year. However, arming has not ordered new ships.

 

How was this summer 2016? Jean-Marc Roue "As long freight than passengers, the season is satisfactory. Reservations were good before Brexit. This trend continued until the end of the season. The figures that we will present next week will be better than last year when we also had three big technical stops and two boat damage. On cargo, we expected an increase in volumes since we developed our capabilities with the implementation Seine Bay and Pelican service on Transgascogne ".

 

How do you explain this good season?

 

JM.R "The weather may have played a role. But it is also because we have focused on promoting with our partners in the Great West Tourism committees. Brittany Ferries devotes a budget of ten million euros in the promotion. To thwart these major phenomena that are Brexit or insecurity, it will likely put additional ways to improve the reception. In the 1980s, a major campaign was launched to build houses. A raise is necessary because these deposits have grown old. " Christopher Matthew: "Our company is just one link in a chain. We are dependent on the attractiveness of territories. Knowing welcome the British speak English, offer bilingual menus is good, but we must also renew the offer. The small boutique hotel is in the process of decline. If tomorrow the English customers is not welcoming structures, modern for a vacation, it will go elsewhere. The English who travel a lot, and that will probably continue to do so, are so stressed by tour operators worldwide. "

 

Last March, your company announced that it was going to build at least two boats to replace the Brittany and Normandy? How are these projects?

 

CM: "Obviously we think the renewal of our fleet. Our boats are aging. We have contacts with bankers, shipyards, brokers but we have not yet signed anything because it has been, meanwhile, the Brexit and the book drop. The Brexit did not break the business but it has blurred the outlook. " J.-MR: "It's more complicated to go to a banker when you have less money and that it presents a less sexy business plan. We have the ambition to buy new boats but we are wise. Nevertheless, we spent 100 million euros to equip our smoke filters boats. We also chartered two new boats on Seine Bay and Etretat. After a hard crisis, we restated the company. And since 2013, we have over 400 employees in the company, hired or tenured. Who says better ?

 

Are you going to appeal to the second-hand market?

 

JM.R: "The Brittany Ferries operates on longer lines than others. She needs new vessels with a large number of cabins and can return to our ports. It should finally that these boats are allowed to cross the Bay of Biscay. We struggled to find our happiness on the used market. For us, the ideal boat is equivalent to Pont-Aven ship with 600 cabins or more. "

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I love the way Google translates things. I was trying to work out what 'book drop' could possible mean in the fourth big paragraph and gave up. Looking at the original article it was ' fall in the (value of the) pound'. It got it right in the first paragraph because the word sterling was included. In the last paragraph he seems concerned that the vessels can't get back to port. I thought that was only a Condor problem! It should read 'fit our ports' by which I assume he means ' be more like Armorique' in terms of capacity and flexibility to move around as demand dictates. So perhaps no restaurant in that case. Ed

Edited by Cabin-boy

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So they are being very "wise" - or, better, "prudent" or "cautious" in a better translation.

 

In other words, they are still waiting to see what the effects of Brexit will be. And by Brexit I mean here, as I always do, the actual separation. The article is dated 8 October, but I imagine that the further extreme fall in the value of the pound the other night came after the interview.

 

Incidentally, the BBC continues to say that it was a short-lived fall from which the pound recovered. Nonsense. As I write, the inter-bank rate is 1.1104 - more than two centimes less than two days ago. I have little faith in the media these days.

 

I read somewhere recently - it may have been on here - that exchange rates have always gone up and down and we should get used to it. Well, as someone who has travelled to France several times a year for fifty years and now lives there, I can assure whoever-it-was that I am quite used to fluctuations. But if you look at the last fifty years of sterling/franc/euro exchange rates, the pound has always come off worse. When I was a kid, there were 16 francs to a pound. Over the years, that dwindled to 8. Now it's 7,2837. (1 = 6.55957 francs).

 

The effects of Brexit will be long-lasting and as far-reaching as they will be damaging.

 

BF is right to wait and see.

Edited by droopsnout
Word omitted

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So Brexit has blurred their future even though revenues are up and the British are still travelling in the same volume, if not more than previous years?

 

It's a shame that the BF senior team weren't so prudent in regard to the SECA regs which required the £100m investment over such a short period, after all they only had over 5 years to prepare for them.

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With the majority of revenues in £ for BF that position has weakened badly in recent months. They are right to be cautious in my opinion.

Remind me how many British ferry operators there are?

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With the majority of revenues in £ for BF that position has weakened badly in recent months. They are right to be cautious in my opinion.

Remind me how many British ferry operators there are?

 

To be fair BF have had a few government "helping hand" arrangements over their lifetime something uk operators never get.

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I understood that some lifeline ferry routes in the Scottish Isles were subsidized. If we move out of the EU subsidy restrictions are off.

We shouldn't have to rely on the French, Danish, Swedish companies....

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The comments about second-hand tonnage are interesting. Bing translates as "we struggle to find our happiness on the second-hand market". Reassuring to see BF management concede that second-hand ships are not the ideal for BF and that if they can, they will build. Hope they will not delay the newbuild decisions too long - next year should tell them whether the bottom is going to fall out of their market or not, and traffic volumes this year would appear to make that unlikely.

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That would be good.

 

I've no idea about the economics of shipbuilding, but of course the cost of any imported materials will increase, which might limit the savings a bit.

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Maybe the UK should take on some specialist migrant workers to do it?

 

From a bulletin issued today by TorFX, a currency exchange company:

 

 

Sterling

 

Although no one really knows what caused the Pound’s ‘flash crash’ on Friday morning, most investors are taking the extraordinary plunge as a warning for the future.

 

The UK government’s hard line on immigration means that Britain will almost definitely lose access to the single market in March 2019, when the two-year ‘Brexit’ negotiations are concluded.

 

Statements over the last few days from German Chancellor Angela Merkel, French President Francois Hollande and European Commissioner Jean-Claude Juncker confirm this outlook. Traders have accelerated their selling of the Pound in reaction to this proposed ‘hard Brexit’ scenario, as they believe direct foreign investment flows will dry up and prompt the UK’s already unhealthy current account deficit to swell.

 

Forecasters are predicting further Sterling depreciations over the coming months, with GBP somewhat decoupled from economic factors and now more aligned with the political struggles of London and Brussels.

 

Euro

 

The Pound to Euro exchange rate slammed to a new six-and-a-half-year low on Friday as ‘hard Brexit’ anxieties contributed to a ‘flash crash’.

 

Whereas Sterling’s declines versus most of the majors came in the form of one almighty dip and then a 75% rebound, against the single currency Sterling actually sustained its losses without fighting back. GPB/EUR plummeted by over two cents on Friday and does not look capable of staging a recovery anytime soon.

 

Data in the UK showed that industrial production shrank -0.4% in August, disappointing forecasts of a +0.1% increase. Meanwhile, a separate report showed that the UK trade deficit widened from -£9.5 billion to -£12.1 billion. Bad news all round.

 

 

The UK needs to be producing more! "Unhealthy current account deficit". "Trade deficit widened ..."

 

This info supports the case for BF waiting a fair bit longer, I think.

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Oh, and if you're coming to France or other Eurozone countries next year, buy your euros now!

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