Author Topic: Cunard Annual Report and Accounts 1969  (Read 509 times)

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Online Michael Gallagher

Cunard Annual Report and Accounts 1969
« on: May 25, 2018, 09:31 AM »
London 18 March 1970

   [Extracts relating to Queen Elizabeth 2]

...Moreover, we achieved this result after bearing the losses of £1¼ million arising from the American longshoremen’s strike at the beginning of 1969 and after bearing the loss of profits from the late delivery of the ‘Queen Elizabeth 2’.

...We have also adopted graduated depreciation rate for the ‘Queen Elizabeth 2’, though periods and proportions are different, charging higher rates in the earlier years; because of her late delivery, however, there is only an 8-month charge for ‘Queen Elizabeth 2’ in the 1969 accounts.

...Perhaps the most significant feature of the year’s trading in 1969 is that, even without a hundred earning-days of ‘Queen Elizabeth 2’, Cunard’s passenger ships achieve an improvement of £1.9 million and made a profit (some £800,000) for the first time since 1960 – a year earlier than the target date I set when I became Chairman at the end of 1965.

...During 1969 we re-negotiated the sale of the first ‘Queen Elizabeth’ and have already received £1.3 million of the purchase consideration. We sold the Cunard Building in Liverpool for £2.7 million, and 50 Young Street, Sydney, for £0.9 million. With this, and the cash flow from profits plus depreciation, we have met our capital expenditure commitments, repaid £2½ million of the Government’s loan for the ‘Queen Elizabeth 2’, and converted net bank borrowings of £7.8 million at the beginning of the year into a net cash balance of £1.5 million at the end – a cash turn-round of £9.3 million.

The Cunard Steam-Ship Company Limited
Report of the Directors

London, 18 March 1970
By Order of the Board
F Leach, Secretary


3   PRINCIPAL ACTIVITIES

Passenger ships

‘Queen Elizabeth 2’ was eventually delivered by the builders on 18 April 1969. Apart from the period set aside for the usual overhaul six months later, she operated continuously for the rest of the year with only minor troubles, which have been overcome. The ship has quickly established a high reputation with passengers and the directors are confident that she will continue to be a financial success.

   4   FIXED ASSETS

(a)        As already stated, ‘Queen Elizabeth 2’ was delivered on 18 April 1969. The estimated final cost differs only marginally from the amount provided for in the 1968 accounts. The question of a possible claim by the company in respect of the late delivery of ‘Queen Elizabeth 2’ is a matter of considerable legal complexity. The board is not yet in a position to make any further public statement about it, but stockholders may rest assured that it is receiving the most careful consideration by your directors and their advisers.

   9   GOVERNMENT LOANS

During 1969, £500,000 was repaid against the £12m loan to Cunard Line Limited. Further repayments of £500,000 each will be made as due in April and October each year.

The Cunard Steam-Ship Company Limited drew £2.1m in April 1969 under the provisions of its agreement with HM Government, making a total of £7.5m, and repaid £2m in December.

The total owing by the group to HM Government at 31 December 1969 was therefore £17m – £11.5m by Cunard Line Limited and £5.5m by the parent company.

Miscellaneous

Depreciation is calculated to write off the net cost or valuation, less estimated residual value, as follows:

                     Basis of annual depreciation charge

      ‘Queen Elizabeth 2’         62% over first 10 years
                     31% over next 10 years
                     5% over remaining 5 years


Online Lynda Bradford

Re: Cunard Annual Report and Accounts 1969
« Reply #1 on: Apr 19, 2021, 06:12 PM »
London 18 March 1970

   [Extracts relating to Queen Elizabeth 2]

..............

3   PRINCIPAL ACTIVITIES

Passenger ships

‘Queen Elizabeth 2’ was eventually delivered by the builders on 18 April 1969. Apart from the period set aside for the usual overhaul six months later, she operated continuously for the rest of the year with only minor troubles, which have been overcome. The ship has quickly established a high reputation with passengers and the directors are confident that she will continue to be a financial success.

   
On 18 April 1969 QE2 was delivered to Cunard - an important date for QE2
I was proud to be involved with planning QE2's 50 year conference in September 2017 in Clydebank
www.qe2event.com

Online Thomas Hypher

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Re: Cunard Annual Report and Accounts 1969
« Reply #2 on: Apr 19, 2021, 09:47 PM »
   
On 18 April 1969 QE2 was delivered to Cunard - an important date for QE2

Did Dubai deliberately open the ship to the public and hotel operations on the same date 49 years later or was it purely coincidence?

Also, I didn't realise Cunard, as an independent company before the Trafalgar House takeover, had a parent company? Was it simply a division of the company for operating/regulatory/tax/corporate reasons? I presume "The Cunard Steam-Ship Company Limited" was the parent and "Cunard Line Limited" was the subsidiary?
« Last Edit: Apr 19, 2021, 09:50 PM by Thomas Hypher »
First sailed on QE2 in August 2003 aged 6 years old. Last stepped foot and sailed on QE2 in July 2008. Last saw the seagoing QE2 in person from the decks of QM2, on QE2's last Transatlantic crossing (Eastbound tandem) in October 2008. Visited QE2, in her new life, in Dubai back in January 2020.

Online Michael Gallagher

Re: Cunard Annual Report and Accounts 1969
« Reply #3 on: Apr 20, 2021, 07:14 AM »
It would be nice to think 18 April 2018 was selected for the 18 April connection but I suspect, like many things, it was a coincidence - just like 26 November 1968 was her first day in open water and 26 November 2008 was her last day in open water!

Cunard Line Limited was established as a requirement of the Government loan. The future ship was to be owned and operated by Cunard Steamship through a separate Company to which the Cunard Company would subscribe £12 million as equity capital. The remainder of the cost, not exceeding £18 million, would be provided by the Government as loan capital. Alternatively, the ship could be owned and / or operated by the Cunard Company so long as the Government were left in the same position as regards security and redemption as if the ship were owned by a separate Company.

Carmania and Franconia would join QE2 in the Limited company.

Online Thomas Hypher

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Re: Cunard Annual Report and Accounts 1969
« Reply #4 on: Apr 20, 2021, 09:25 AM »
Likewise, I suspect it was coincidence although it's a nice thought!

Thank you for the extra information Michael. The arrangement of the government loan was convoluted! When did QE2 (under Trafalgar House I presume?) pay off the government loan? Fairly early on in her career?
First sailed on QE2 in August 2003 aged 6 years old. Last stepped foot and sailed on QE2 in July 2008. Last saw the seagoing QE2 in person from the decks of QM2, on QE2's last Transatlantic crossing (Eastbound tandem) in October 2008. Visited QE2, in her new life, in Dubai back in January 2020.

Online Michael Gallagher

Re: Cunard Annual Report and Accounts 1969
« Reply #5 on: Apr 20, 2021, 09:59 AM »
The loan was paid off early - I'll have to look up the exact date in the Loan file I have...

The initial success of QE2 allowed Cunard to get ahead of itself in the repayments. QE2 made a profit of £383,000 in her first two operational months – covering two and a half times the servicing costs of the Government loan. Cunard sent a cheque for £500,000 to the Government on Friday 17 October 1969 and Sir Basil stated that another £2 million would be sent before the end of 1969 leaving outstanding loans of £11.5 million and £5.5 million.

In all Cunard would have then repaid £2.5 million – one eighth – of the Government loans provided for the completion and putting into service of the “world’s most sophisticated ship”, and in so doing he said:

“Some people often speak as though Cunard has been accorded by the Government some specially privileged financial position in respect of the QE2. If another shipowner were to order (say) five container ships costing £6 million each, he would be able to borrow, on normal terms, the regular 80 per cent (£24 million) and would have only to repay some £2 million by the end of this year, leaving £22 million outstanding.

“Compared with this, Cunard will have reduced the amount outstanding on the QE2 loans to only £17 million, the difference of £5 million having been provided entirely out of our own funds”.

Cunard were so confident of success that when rumours of a smaller fleet mate to QE2 being built were swirling around in November 1969 the company announced that no Government loan would be required this time!
« Last Edit: Apr 20, 2021, 02:58 PM by Michael Gallagher »

Online Lynda Bradford

Re: Cunard Annual Report and Accounts 1969
« Reply #6 on: Apr 20, 2021, 01:05 PM »
Michael you had posted aspects of the Government loan for QE2 in this topic:

https://www.theqe2story.com/forum/index.php?topic=4238.0

Moderator Note: Check if these two topics can be merged later.
I was proud to be involved with planning QE2's 50 year conference in September 2017 in Clydebank
www.qe2event.com

 

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