Island Echo always welcomes letters to the editor, which may of course not reflect the views of the publication and its staff.
Letter to the editor – 3rd August 2023
“Earlier this year I looked through Wightlink’s (WL) latest set of published accounts for 2021 and 2022. I wanted to know the truth behind Keith Greenfield’s (CEO of Wightlink) mid-2021 claim that without taxpayer subsidy, the full cost of ferry services will be borne by WL customers through ticket prices, and the narrative that unless WL secured financial emergency support the firm risked bankruptcy. The government handouts to WL totalled £6.4 million in 2021 with a further £894,000 in 2022.
“Prior to this the accounts from 2017-2019 showed WL made net profits of over £50 million. So why would a company that made £50 million pure profit over the previous 3 years need to take the public’s money? Looking into those years revealed that over 90% of that profit was payout as dividends apportioned between Arca Shipping (WL’s parent company) and WL Directors.
Article continues below this advertisement “However, it’s only WL’s latest published accounts (2021/2022) that would reveal the accuracy behind Mr Greenfields’ claim. Firstly, it’s important to note that WL is not a public limited company, meaning the public cannot own WL shares. It’s a private limited company and so shares are owned by WL Directors and WL’s parent company Arca Shipping.
“In 2021 WL received a £9.387 million insurance payout for the reduction in revenue caused by the Covid crisis. This negated the need to claim against the taxpayer and take the public’s money. As unethical as that might appear, shockingly, barely a year later in June 2022 after WL received that huge sum from the Government, they paid themselves £8,000,000 in dividends. The obvious question is why take taxpayers’ money, if you can afford to give yourself £8 million from profits, especially given they didn’t maintain the services and took so long to return them?
“What’s more, in a highly irregular move WL waited until the 2022 accounts were closed off before declaring they paid themselves £8 million in dividends. Therefore, you won’t see this sum entered on the WL’s balance sheet for 2022. Instead, it is listed as the last entry on their financial statement that simply states “In June 2022 the company declared a dividend of £8,000,000 in total.”
“I suspect that the dividend payout was only declared after the accounts were signed off due to the fact it would make for bad reading by having two opposing entries so close together. If on one hand you’re pleading poverty and taking huge sums of public money, but on the other hand paying £8 million in dividends to Directors and the corporate owners, then it looks like taxpayers money has just subsided their dividend payouts, when it should have gone to maintaining services.
“The reality is if you can afford to pay yourselves £8 million so soon after receiving public money, you didn’t need the public’s money. This is especially true if one considers the fact that since 2017 WL has made £77 million net profit. Furthermore, WL accounts are extremely complicated with parent companies of parent companies 4 times over, so ultimately, outside of the WL Directors allocation, it’s hard to trace whose pockets the remaining dividends finally fall in.
Article continues below this advertisement “There remains one last shocking, but not surprising truth. Having looked through WL’s published accounts dating back to 2017 I discovered WL has effectively paid no tax. In fact, over the last 6 years, WL has received a further £2.2 million of the public’s money. Since 2017 WL has paid £4,625,000 in tax, with tax rebates of £6,822,000.
“The accounts show WL can afford to offer all Islanders a much better deal, and with average net profits of nearly £247,000 per week for the last 6 years, it certainly does not need to be subsidised by the taxpayer. Yet, Mr Greenfield has the gall to claim ticket prices would increase if this was not the case.
“In light of all this I have written to the Department of Transport asking what criteria need to be met to take a closer look at WL’s accounts”.
Karl Hunter
Shanklin
good write up on a company with no morals. If this island is to move forward economically then Wight link has to help us not hinder us.
Well done Karl for taking the time to personally investigate this atrocity. And that’s just what’s visible.
You just hate capitalism! This is how the world works
There’s capitalism and then there’s carefully calculated, systematical p**s taking!
all those who vote down the capitalism message, still expect to be paid more money, still expect to get handouts and demand pay rises
No pay rises required if there was a tunnel…
Great investigation , I bet red funnel are just the same , when most other people are struggling these robbing bast..ds are making a fortune out of the struggling public
Greenfield along with others probably have connections with wightlink I wouldn’t be surprised
I bet you don’t have a problem taking as much money as possible from the state in your benefits package though, regardless of the cost to the taxpayer, do you molly.
Wightlink are just a bunch of money grabbers like Red funnel !!!!
I am guessing the karl has no understanding of the capex requirements to replace those boats and how that needs to be built up over time, to avoid costly loans from finance providers.
if they don’t make a decent profit, where does the money come from to cover replacements and unexpected costs
I am guessing the karl has no understanding of the capex requirements to replace those boats and how that needs to be built up over time, to avoid costly loans from finance providers.
if they don’t make a decent profit, where does the money come from to cover replacements and unexpected costs
and of course it is lost on Karl that wightlink are a “for profit” enterprise – they are not part of some socialist hippy commune singing kumbaya
You’re missing the point. ‘For profit’ means you always run the risk of losing money as well as making money. As soon as there was a risk of losing money the ferries ran to the government for a subsidy. This letter is suggesting that Wightlink made enough money to not need it.
And btw, when they pay out millions of profit to shareholders they are not retaining the money for future capex requirements are they?
they spent nearly all their retained capital getting through the covid farce -and needed free cash to keep going – now they need to build it up again
they are for profit and the owners, just like every other business, up and down the country, large and small, expect to be able to extract cash for theirselves – after all, this is not some hippy commune is it- they are running a ferry company – you cant afford the fare, you don’t travel on it – pretty simple. No one has any obligation to provide cheap ferry travel to anyone.
typical benefit sponging leeches – expect everything for nothing
It’s interesting that you keep assuming that everyone is sponging and on benefits, you seem a bit obsessed with it in fact.
Build a tunnel… problems solved
sink the boats, build a tunnel…
This greedy company is preventing me from visiting my favourite holiday destination as the ferry fare is extortionate.I’ve been visiting the Island since the 60’s and love supporting local businesses as opposed to travelling abroad.
The company are not “preventing you from visiting” – they don’t have staff at the dock saying “no sue, you aren’t travelling to the island” – the reality is that you just cannot afford it. Perhaps you should travel as a foot passenger then – it is about £20 day return – hardly breaking the bank
No wonder they charge so much to cross the solent
They have a cheek.
Wonder which Conservative MP is a shareholder in Wightlink to get this sort of ‘balout’.
Unknown why our Government falls for this ! It would be much cheaper for the government to have a Tunnel across to mainland, get the ferries back to sightseeing tours… !! This would allow better business’ and more products reaching this Island, also so much easier to commute, plus getting to other hospitals.. would also boost this Islands economy and turn it back into a rich area for tourists to come and spend the money they saved from ferry transport.
Any commercial operation that is both a near monopoly and an essential public service should be nationalised
well, ashonishing. If all true and I’m not the one to doubt that’s greed at it’s worst.A close inspection of the accounts and the cases for such tax rebates must surely be carried out – without delay – and if found anywhere true then the ” clever ” people behind these scams must surely be penalised / imprisoned etc. and the ill gotten gains returned to the treasury.
Vicky. I must agree 100%. Thank you Karl . Maybe the BBC would like this story I am sure it wopuld look great on NATIONAL or even sky news.