Author Topic: Cunard Annual Report and Accounts 1968  (Read 760 times)

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Online Michael Gallagher

Cunard Annual Report and Accounts 1968
« on: May 25, 2018, 09:30 AM »


It had been expected that ‘Queen Elizabeth 2’ would be delivered at the end of 1968 and ready to enter commercial service early in January 1969. In this expectation the crew was assembled and trained and an extensive advertising programme entered into. In the event, as is well-known, mechanical difficulties postponed delivery of the ship until 18 April 1969. The ship’s first commercial voyage began on 22 April. This delay of some four months involved Cunard Line Limited in heavy costs for maintaining the crew, which had been carefully selected to ensure successful operation of the ship, and otherwise.

The Board has decided not to carry forward the abortive advertising costs and agents’ commission incurred in 1968 and the other costs referred to, altogether some £778,000, to be recouped out of subsequent revenue. It has been considered more prudent to make full provision of these expenses at 31 December 1968, even though some of them arose in 1969. The total amount has therefore been provided out of Revenue Reserves and Profits Retained, as shown on page 12.

This treatment will enable future trading results for the new ship to be shown in 1969 from the date of her entry into service without deduction in respect of pre-delivery losses. The Board believes this to be in the best interests of stockholders. It is of course without prejudice to any claims that the company may have against Upper Clyde Shipbuilders Limited (or others) under the shipbuilding contract for consequential loss arising from late delivery. Any recovery that may be made under such claims will be credited to reserves at the appropriate time.

The amounts provided relate only to expenses actually incurred and do not include interest charges which are capitalised as part of the cost of the ship, nor do they reflect loss of income due to non-availability of the ship for revenue earning purposes. Because of the delay in delivery, the profit earned by ‘Queen Elizabeth 2’ in 1969 will obviously be less than it would otherwise have been.