We know just what you’re talking about. There’s …

Comment posted Has Loch Fyne Oysters been shucked by the right partner? by newsroom.

We know just what you’re talking about. There’s nothing like an all-nighter – of which we do too many – to make one snappish in the morning.

And we understand your irritation. But the business risk tightrope is a difficult one and a white knight means handing control to something which may not deliver.

A 36% drop in pre-tax and pre-interest trading profits is not a sneeze. And investment in the means for LFO to develop its export market will come from profits.

There is no one who would not fervently wish to see LFO grow securely but this has not been the start to the relationship any of the partners would have wished for.

Having said that, Northern Link is an investment company and it is part of Scottish Seafood Investments. That may buffer the hit on the Scottish Salmon Company.

But the LFO employee-owners who were given shares in the Scottish Salmon Company in the sale, will not be able to look forward to much of a dividend in these circumstances.

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9 Responses to We know just what you’re talking about. There’s …

  1. Well done FA for reporting on this- it’s a good news story and it is directly relevant to Argyll.
    The future of Loch Fyne Oysters has been secured by the intervention of The Scottish Salmon Company.
    Between them these companies bring employment, significant revenue, and tourists to Argyll, and export ‘Argyll’ all over the world.
    So The Scottish Salmon Company has reported a dip in profits?- no surprise given the downturn in salmon prices, but a £14.4m profit is not to be sniffed at, especially since most of this was generated in Argyll.
    Your analysis of the salmon market is amateurish and merely an attempt to criticise the industry, and as for your attempt to play the Norwegian bogeyman card, you have been praising Norway to the heavens as a role model for an independant Scotland for long enough so what exactly is your point?
    And hurrah for The Scottish Salmon Company for announcing massive capital investment plans in rural Scotland with the attendant job creation. How many other businesses are expressing such positivity in the current economic climate?

    Like or Dislike: Thumb up 0 Thumb down 0

  2. But how many anglers are we losing from the tourism economy who spend a lot of money in all areas? I take it you’ve read the reports on the effects on wild fish.

    Like or Dislike: Thumb up 0 Thumb down 0

  3. Like school defender I can not understand nor see the reasoning in this article.
    In the original press release it was quite clearly stated that one, if not the major reason for the tie-up with Scottish Seafood Investments was that Loch Fyne Oysters found it increasingly difficult to secure funding/investment from conventional sources (probably their bankers) to expand the business because of the way it was structured.
    It was and is a case of the owner/employees being willing sellers to Scottish Seafood Investments as willing buyers to secure and expand the business.
    Can only be good for Argyll.

    Like or Dislike: Thumb up 0 Thumb down 0

  4. Being an analyst and having reviewed the Q4 accounts, i find it disturbing no news outlet covering this story has noticed the comments hidden away at the back of the accounts on page 8. I will paraphrase but essentially due to lower volumes coming through due to world salmon supply recovering from the chilean farms coming back online, higher feed costs, stocks killed by sea lice and committed capex requirements, the company forecasted a breach of the gearing ratio and NIBD to EBITDA ratio in Q2 & Q3 in 2012. They did however successfully gain waivers from the banks for the forecast breaches plus the covenant ratios were loosened. Interestingly however they state that the covenants may have to be re-visted should revenues & costs not act as assumed. Essentially the banks now hold the cards here after the shocking Q4 results. I also find it interesting that the company has recently signed up the use of Ballan Wasse in salmon cages in order to reduce sea lice on salmon. Perhaps a chilean style outbreak of sea lice is on the cards given the ever more concentration of cages in order to drive towards lower costs and higher profits???

    Like or Dislike: Thumb up 0 Thumb down 0

      • BFM- I am sorry for my comment, it was uncalled for and quite rude (as evidenced by the number of no votes). I blame a long hard day at the coalface with unruly youngsters, but that’s probably just an excuse for a hint of envy at your financial analysis, plus a little irritation that the FA story and your response tries to use a good news story to attack a valuable Scottish industry.

        Like or Dislike: Thumb up 0 Thumb down 0

        • We know just what you’re talking about. There’s nothing like an all-nighter – of which we do too many – to make one snappish in the morning.

          And we understand your irritation. But the business risk tightrope is a difficult one and a white knight means handing control to something which may not deliver.

          A 36% drop in pre-tax and pre-interest trading profits is not a sneeze. And investment in the means for LFO to develop its export market will come from profits.

          There is no one who would not fervently wish to see LFO grow securely but this has not been the start to the relationship any of the partners would have wished for.

          Having said that, Northern Link is an investment company and it is part of Scottish Seafood Investments. That may buffer the hit on the Scottish Salmon Company.

          But the LFO employee-owners who were given shares in the Scottish Salmon Company in the sale, will not be able to look forward to much of a dividend in these circumstances.

          Like or Dislike: Thumb up 0 Thumb down 0

          • Agreed then. Let’s watch this space closely and we’ll no doubt have a discussion in a year’s time when the 2012 accounts are published. Personally, and without detailed knowledge of the Scottish Salmon Company’s financial aspirations, I believe that this will be a positive move for LFO, Scottish Salmon Company, and most importantly, Argyll.

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