Fairline’s accounts for the year ending 30 December 2010 may be mainly of historical interest following the July buy out for £1 and subsequent refinancing of the boatbuilder, writes Matt Johnston.

The July deal - done by Guernsey-registered investment vehicle BECAP Fund LP – leaves the accounts giving an insight into the state of the firm in the run up to that event.

The end of 2010 saw Fairline's turnover down by over 25% from the previous year to £81.8m (2009: £112.7m), with the company selling 157 boats versus 205 in 2009.

However, the inability of Fairline to match that with a proportional drop in the cost of sales, despite the shedding of around 100 staff, meant gross profit for the year was effectively zero, versus £10.2m in 2009.

Distribution costs and administration expenses also remained at 2009 levels, resulting in an operating loss for 2010 of £10.1m.

The balance sheet was also not looking good. Despite having banked £18.9m of advance customer payments, most of that was tied up in stock, including £5.6m of finished boats, and at 31 December Fairline had just £157,000 of cash in the bank.

With bank borrowings unchanged over the year at £25.75m it seems additional lending from the bank had not been an option throughout 2010 and that the company was reduced to doing everything possible to conserve cash.

As it happed, Fairline managed to hang on for another six months before BECAP Fund LP, which includes RBS, Fairline’s bankers, as a junior partner, came in with £20m of new funding in a mixture of equity and loan notes and, at the same time, converted the total bank debt of £31m into equity and loan stock in the new holding company, Masco 30 Limited.

With that near-death experience behind the company, Fairline’s management can get back to its everyday tasks of fighting the economic headwinds and battling for market share.