‘We’re not in business just to keep our people busy’
The new boss of Oyster Yachts bought the boatbuilder on a whim but is determined to sail a new course, discovers Alan Tovey
Most big business decisions are made after long and careful consideration, rather than on a whim. Nonetheless, it was heart rather than head that drove software entrepreneur Richard Hadida to buy Oyster Yachts, the luxury boatbuilder after it went into administration in February.
“I was on holiday at a friend’s apartment in Cape Town and saw that Oyster had collapsed. I thought, ‘That’s my destiny’,” says Hadida, sitting on a sofa in the company’s waterside offices in Southampton. “It’s a terrible cliché but I felt it was my calling.”
While a spur-of-the-moment decision, there’s a bigger story behind the deal. Hadida, 53, wasn’t just some landlubber. He sailed in his youth and got back into it almost 20 years ago, gaining his skipper’s licence so he could charter a boat to arrive in style at a family wedding on a Greek island.
“I’d got the idea it would be fun to go in a yacht,” recalls the softly spoken Hadida. “Dawn was breaking as we arrived in Lesbos; it was a special moment.”
A young family forced him to take another break from sailing but he got back out on the water about five years ago, chartering Oyster yachts in the Caribbean. Through this he became friendly with ex-formula 1 team owner Eddie Jordan, also a keen sailor. “We’d talked about buying a boat together,” Hadida says. “In fact, I was at Eddie’s apartment when I heard about Oyster and decided to buy it.”
Funding for the deal came from Hadida’s stake in Evolution Gaming, which produces live-action gambling for customers such as William Hill.
“High-stakes gamblers don’t want a computer telling them they’ve lost, they want to see a real ball bouncing around a roulette wheel,” Hadida says, adding that Evolution is “a proper unicorn”. It now employs more than 5,000 staff and is worth more than £2bn. “Evolution’s given me the pockets to do this,” he says motioning around the office.
Oyster had been foundering for some time before collapsing. Despite a record £70m order book, it had barely made a profit on steady annual revenues of about £40m.
Things were complicated by the loss of the Polina Star III in 2015. The almost-new 82ft Oyster yacht, sank off Spain after losing its keel. No one died but it raised questions about the company’s reputation for building “go-anywhere” vessels. A legal battle followed, and Oyster took a £5.2m hit as a result of the incident, dragging it to a £7.4m annual loss.
“Polina Star was one of the nails in Oyster’s coffin,” says Hadida. The sinking is the subject of a legal dispute but not something linked with the new owner, whose lawyers made sure he bought only “the brand, the assets, and the goodwill”.
Hadida also acquired the business which makes Oyster yachts’ hulls.
“Polina Star should have never of happened, no question,” says Hadida, who now has every part of the hull-making certified by Lloyds.
“It was something I needed to do, not just for Oyster, but for me to sleep at night.”
While the sinking generated embarrassing headlines, the real trouble was that Oyster was lossmaking. Hadida says under his ownership, prices will rise and efficiencies will be made.
“Boatbuilding is a tricky business to make a success of. You have to build it on strong financial grounding,” he says.
“It’s easy to slip into discounting to get the deal but you have to stand up and say, ‘These are the prices because I need to make a profit. If you won’t buy them I won’t build them’. We are not in the business of just keeping people busy.”
The company currently builds about 16 yachts a year ranging from 45ft to 120ft. The largest can take several years to finish. Hadida wants to cut that through more efficient construction, and is considering introducing a smaller vessel “to bring more people into the Oyster family”. At £1.4m for the entry-level – albeit bespoke – yacht, he admits it’s an exclusive club.
He leads a tour of the boat shed, where Oyster produces its larger vessels. The smaller models are made in Norfolk, along with the hulls, which are driven to Southampton for fitting out of the larger vessels.
Hadida scampers over the decks of yachts in various stages of construction, greeting staff, examining work and pointing out design features.
He’s particularly keen on the aft stateroom’s large windows.
“Lying in bed you’re looking out at water level,” he says. “When you’re under way and the yacht heels over, the windows on one side are underwater. You can see dolphins swimming alongside – it’s magical.”
Back in the office, Hadida sets out his business plan, but cheerfully admits he “knows nothing about boatbuilding”. He’s clear about what he brings to the business. “Money,” he says bluntly. “It’s expensive doing this. But I also bring pure passion, I know how to doggedly and relentlessly make things happen.
“And as a yachtsman, I know what customers want.”
He’s gathered a board which includes Ashley Highfield, the former boss of Johnston Press. “If anyone can run a lean business, it’s him,” says Hadida. Other directors include investment banker Ivan Ritossa, yacht designer Rob Humphreys and Eddie Jordan. Hadida won’t be drawn on how much he paid, turning the question around. “It was substantial. How much do you think?” he asks.
Telegraph’s guess that he is likely to spend “tens of millions” over the first few years isn’t torpedoed.
The purchase caused tough conversations with customers whose yachts were being built. Hadida wouldn’t buy their contracts as they were not profitable.
“Oyster owners tend to be successful businesspeople so they understood we have to make money to survive, so we renegotiated,” Hadida says. There’s speculation he may be getting a new, larger yacht of his own in the form of the orphaned vessel from the customer who didn’t renegotiate.
The entrepreneur’s fortune puts him in the “lucky” position of not having to make money from the get-go. “If I have to run it at breakeven forever I will do,” he says.
“But I cannot believe that will happen with the building blocks I’m putting in place. Who knows what we can do?” It’s a bold ambition, one that stems from his youth. Hadida recalls dropping out of school aged 17. “My father and three of his oldest friends took me to see the cricket,” he says. “They were all entrepreneurs and had risen to the top of their fields. One of them said, ‘Look at us, we’re millionaires and haven’t got an A-level between us.’ I dropped out the next day with the idea of becoming an entrepreneur.”
Hadida says his hero is Horatio Nelson. He’s amassed one of the largest collections of memorabilia of the legendary sailor outside the National Maritime Museum. It includes the watch Nelson had on him when he died on HMS Victory at the Battle of Trafalgar, as well as a piece of the ship’s flag.
“The flag’s incredible,” he says of the artefact. “It’s got musket ball holes in it, it’s a real piece of history.”
Nelson has been an inspiration. Knowing pieces of his collection were handled by the historical figure have “helped get me get through some tough times”, Hadida says.
Sailing is another link he feels with Nelson. “You can sail round Antigua today and know that’s the same way Nelson travelled around,” he adds.
“That’s the thing about sailing,” Hadida says. “It’s romantic, the original form of world transportation. It can take you anywhere in the world. You get in your Oyster and you could go anywhere in the world. That’s exciting. We’re building adventure machines.”
Getting Oyster back into shape is certainly going to be an adventure.
‘Boatbuilding is a tricky business to make a success of. You have to build it on strong financial grounding’
Richard Hadida bought Oyster Yachts out of administration and although the software entrepreneur admits he is no boatbuilder, sailing is in his blood