| General information |
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| Product: | A range of luxury powerboats, ranging from £85k up to over £1m. Most are customised to the individual customer requirements. |
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| Market: | The market is a competitive world wide one. Over 70% of the firm's output is exported. There is much interest from the Middle East, but it also sells to America and Europe. |
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| Ownership: | The shares were floated on the Stock Exchange 5 years ago, but 45% of the company is still owned by the founder who is still the Managing Director. |
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| Financial Information |
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| Turnover: | £85 million |
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| Profit: | £10.9 million |
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| Ratios: |
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Profit margin : | 12.8% |
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| Gearing ratio (level of debt): | 35% |
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| Acid Test Ratio: | 1.2 |
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| Return on Capital Employed (ROCE): | 21% |
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| Cost structure: | There are fairly high indirect costs and many of these are associated with selling the boats. The factory size required is also large to accommodate many boats being produced at once. There are also high direct costs as the production process is a labour-intensive one with skilled craftsmen. |
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| Marketing |
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| Marketing strategy: | Selling is a highly personalised process with representatives being the frontline of the selling strategy. Reps will fly to the clients. Aquamania will also have a strong presence at boat shows all over the world and advertise in high-profile lifestyle magazines worldwide. |
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| Average market growth over last 5 years: | The market has been growing on average at 5% a year. |
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| Market prospects: | Increasing worldwide incomes look like supporting similar levels of growth for the foreseeable future, but exchange rates are a concern. |
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| Main Types of Marketing: | Boat shows, magazine advertising and individual selling. The sales force are all highly experienced. |
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| Product |
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| Characteristics: | A very individual product tailored to the customers requirements. Many owners will employ full-time crew to run their yachts for them. |
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| Price elasticity of demand: | Relatively price-inelastic. The quality of the product is usually more important to buyers than the price. Most are not short of cash!! |
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| Income elasticity of demand: | The bottom end of the range is quite income-elastic, as income growth is bringing more people into the market. The top-end of the range is less income-elastic as it relies on very well-off buyers. |
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