Yacht services provider YCO Group sharply increased its profit in 2010, which was the first full year since Charlie Birkett became chief executive.
YCO targets the superyacht market and the core business reversed into Aim-quoted yacht fuel supplier Deuxmil Marine in May 2008. YCO manages yachts in return for a fixed monthly fee and also project manages the construction of yachts for clients. YCO also generates brokerage fees on yacht sales and income from the chartering of vessels. YCO also supplies crew and other services to its clients. Europe is the core business region but YCO is expanding into the Middle East and North America.
Pre-tax profit jumped from £31,000 to £588,000 and that was after a £330,000 exceptional charge relating to asset write-offs due to office closures and a potential VAT liability. There was a swing from a foreign exchange gain of £128,000 in 2009 to a £111,000 loss in 2010.
Revenues grew 9% to £27m in 2010 but a large chunk of those revenues are fuel sales, which contribute little in terms of profit. YCO has 58 contracted yachts and 175 charter weeks were sold last year. A new sales team has been taken on to increase that number.
There was net cash of £487,000 at the end of 2010. YCO has used up most of its tax losses but it still has some in its foreign subsidiaries.
House broker Arbuthnot upgraded its 2011 profit forecast from £600,000 to £900,000.
YCO is more likely to add teams of people providing additional services to its client base, rather than acquiring businesses. The fuelling business looks non-core and the capital tied up in the operation could probably be put to better use elsewhere.
At 12.88p a share, YCO is valued at £6.2m.
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