Talk Morgan Forums Talk Morgan Members Section Dealer Talk New Dealer… Morgan Hertfordshire

A friend of mine has a 1990 Testarossa, one of the few Ferrari's that has yet to come of age from an investment point of view. For what was I suppose a grand tourer, if you used it's potential to the full, you were stopping to refuel far too often. Extremely expensive to maintain, not that fast compared to some modern cars that would show it a clean pair of heels, so I can understand why a perfect candidate for EV conversion..........I assume the range was pretty restricted maybe 100 to 150 miles if they kept the weight the same.

Not sure if they have started to mention the cost but iirc the cost is upward of £100k on top of the donor vehicle.

Whilst they are quick to say the person could convert it back, I cannot imagine it being financially viable and with EV parts being so rapidly superseded, a high probability that any take-off parts from a reverse back to petrol having little to no value.

When the tech is down to £10-20k, I can imagine it being a viable option for many but at £100k, I just don't see it being an attractive prospect.

I read this last week and was trying to find a couple of lines from the 2021 accounts.

The ultimate holding company Sports Cars (England) Holding Limited has outstanding debts of nearly £86 million. Most of which is group undertakings with a 12% intersest rate. The debt is growing by roughly £10million per annum. I guess a chunk of this represents what the family were paid, but Id be suprised if the family would return with that level of debt.

At 2000 cars a year £5k per car would be needed to simply stay still on debt payments that's are large part of any car sale. I'm no expert at this level of busines but they either need to make and sell more carsand that will involve investment in the site te alternative would be to more elsewhere or they push prices higher and higher. Both will present challenges.

I didn't follow what happened at Aston but it would be interesting if anyone did to compare the journeys for similariities. Do we see Morgan getting ready for an IPO in the next few years?

Classic venture capitalism.
The buyers get their money out by highly leveraging the company i.e.the company borrowing repays them.
They then put lip stick on the pig & sell it on.
I suspect they expected the US CX sales sooner & now are struggling.
If they can't met the debt covenants which are usually ratios like NWC vs sales then the interest will increase.
The problem is of course with a handmade car you can't cut labour costs easily unless you move away from the handbuilt bit in many areas (as they are doing).
I know they bought back the site & I guess sale & leaseback might be a short term debt funding option.

One of the reasons I retired is that all my clients were VCs or Private Equity, looking for a victim. Their targets were largely private companies owned by people I'd known across the industry. I began to feel uncomfortable with the Ethics of the PE businesses, so I walked away.
In my younger years I was part of a business bought by Anglo United plc, my business team was merged with Coalite Chemicals. Anglo asset stripped Coalite, right down to the pension funding. I bailed out, but it left a bad taste in my mouth.

Although my 'hope' is for a management/family/Morris miracle, my expectation is that within 5 years it'll all go t!t$ up.

The figures that John(asbo) has found look bleak to me, unsustainable, but then I'm certainly not an expert at business at that level, but as a layman, if it were my business I'd be having a few sleepless nights.............

There simply isn't the market, I know the US is hoped to be the big market, but they've got to take a hell of lot of cars to even cover the debt interest.
I know I always seem to end up in a doom spiral of negativity, 🤯🤷🏻‍♂️😆, but the UK market is stationary at the moment, perhaps the sunshine will boost sales.
It's telling that 'the world's oldest Morgan dealer' is now offering 12 months warranty, tax, MOT and a tank of fuel in a bid to boost sales. I really hope it works for them.

We will certainly see more 'legacy dealers' distancing themselves from the factory and only selling and servicing older cars.

Julian, your analysis is shared by people I know better informed and more experienced than me.
I'd like to see "Morgan SVO", with the factory rebuilding legacy cars to "as new" specification, there is a good business potential there for those, like me, who don't want to spanner their cars.
It was the cascade of problems with the electronics on Tarks that helped my conclude "enough". A really well sorted Plus 4 with SSL rear suspension can be excellent, I've driven the development car.

I don't believe that it's feasible fo MMC to build more cars, certainly not the numbers needed to repay the debt, the cost would be too great and the site is too small. It also goes against the very ethos of Morgan, the thing that makes them special.
Increasing the price of the cars even more would be total madness.

I've thought for some time that they had aspirations to become 'big time' car builders. I've always thought that it was a bad idea.
I'm sure the design team is way too big now, not too many years ago it was one bloke......😆

I've heard from people who are 'well informed' that more expensive models are more likely than more affordable ones. I can't imagine that this is a realistic aspiration in the current sales climate.

I agree Peter, a re imagined/SVO/skunkworks/Singer style car would be interesting.....!

I was always dubious when after a century of car building MMC hadn't really quite mastered building a relatively simple car on a modest scale with consistency, but felt it was up to the challenge of building very expensive and very complicated cars on a larger scale.🤷🏻‍♂️

Umm, you might have just hit the rusty nail on the head there, Julian

Did Investindustrial bail out of Ducati eventually, what was the outcome? Anyone know?

Yep, that nails it alright......