WSR BACK IN THE BLACK – BUT CUTBACKS POSSIBLE
Minehead branch turns around £800k loss, but fundraising remains essential for survival.
The West Somerset Railway plc has declared a profit of £311,217 in its draft trading results for the financial year 2019/20.
This figure contrasts starkly with that of the 2018/19 financial year, when the line made a loss of £807,909 in the period from January 1 2018 to March 31 2019.
It had £340,000 in the bank as of March this year, excluding £100,000 held by the plc pending the acquisition of Bishops Lydeard shop and café from the WSR Association, and £7,922 held on behalf of the West Somerset Steam Railway Trust following its National Lottery Heritage Fund grant for the refurbishment of the ‘Gauge Museum’ at Bishops Lydeard. It also excluded trade creditors of £229,000.
Plc chairman Jonathan JonesPratt said: “This is just the sort of confidence booster that we and our supporters needed going forward, and proves that we are once more on the right track. Were it not for last year’s good trading figures and profits, the railway simply would not have been able to keep going, and would have gone into liquidation, but we still need more cash, help and support to survive.”
In early June, the WSR’s emergency funding appeals were nearing £175,000, the actual figure as this issue went to press being £174,715.15 – over a third of the way to the target of £500,000 that the railway estimates it will need to cover the lost income in the Covid-19 lockdown.
Of this figure, £141,733.26 has been raised by the WSR plc’s appeal, consisting of £53,030 via the website, cheques to the value of £16.553.26, share purchases totalling £30,200, and £41,950 from stations along the 22-mile line.
The WSR Association’s ‘Rail Renewal 2020’ fund for the upgrading of the line totalled £30,705, while the West Somerset Steam Railway Trust’s appeal stood at £2,276.89.
In a joint statement on June 8, the three organisations said that they have agreed “a more linked up approach to fundraising”, together with “a common approach to recruitment and retention of volunteers” and the re-establishment of the line’s Partnership Development Group, consisting of representatives from the various organisations on the line, and from local councils.
However, 43 of the WSR’s 45 permanent staff have been given notice that they are at possible risk of redundancy, owing to an upcoming change in the government’s furlough scheme.
Currently, the Government pays 80% of the wages of furloughed workers – but although the scheme has been extended to October, this figure will reduce to 70% in September and 60% in October.
In a briefing note on June 4, the plc board warned that it is “very unlikely” to be able to operate trains this year” (see separate story), and stated: “Despite the operation turning a healthy profit of over £300k by the end of 2019/20, the actual cash in the bank will quickly deteriorate as certain fixed costs of our operation continue to impact our day to day business which is hard to fund while we are not able to operate.”
Mr Jones-Pratt estimates the line’s monthly “burn rate” of fixed costs at approximately £100,000, of which the wage bill accounts for £68,000.
The briefing note continued: “For the worst-case scenario, the figures were quite daunting. Our accountants determined we had probably enough cash to survive until about September or October, even assuming the government continued with its furlough support of existing paid staff.
“If we simply applied a programme of redundancy, that drains the funds as well as losing important expertise. We have had to commence staff consultations and to consider any fundraising ideas, cost reduction schemes and to explore alternatives to redundancy, which is ongoing.”