Winning Channel Islands tender “fundamental” to Condor's future

Monday 19 August 2024

The future of Condor Ferries looks bleak – and perhaps non-existent – if the company fails to win the tender to be the Channel Islands’ passenger and freight ferry operator, the latest reports on its accounts have revealed.

The reports on the accounts of Condor UK Holdings Limited – the investment company under which Condor Ferries sits – were filed with Companies House earlier this month.

The reports state that winning the tender from March 2025 onwards is “fundamental” to the operations of the company and the wider group.

In fact, the independent auditors said the ongoing process "represents a material uncertainty that may cast significant doubt on the Company and the Group's ability to continue as a going concern" – in short, its ability to survive.

The battle to secure the contract for Jersey and Guernsey's passenger and freight services for the next 15 years kicked off earlier this year with the incumbent Condor and Danish shipping company DFDS both throwing their hats in the ring and submitting bids.

Last week, it was reported that a third provider had also joined the scrum. Irish Ferries currently operates ferries to France from Ireland and Britain.

The Government of Jersey said the competitive procurement process remained on schedule with the decision due to be announced next month, and is being managed jointly by the governments of Guernsey and Jersey.

Condor's Interim CEO Christophe Mathieu has maintained the long-standing operator is "determined" to win the tender.

Pictured: Christophe Mathieu took over the role of Condor CEO on an interim basis from John Napton in February.

Mr Mathieu, who is also the CEO of Brittany Ferries, recently confirmed the operator's intention to become the majority owner of Condor, pending approval from the islands' regulatory authorities.

The Independent Auditors' Report of Condor UK Holdings Limited's accounts for the period of 12 months to 25 March 2023 states that "the Directors are confident that the formal tender submitted met the requirements and place the wider Group in a positive position for the tender process".

However, it goes on to cast "significant doubt" about "the group's and the company's ability to continue as a going concern" without winning the contract.

'Going concern' is an accounting term for a company that is financially stable enough to meet its obligations and continue its business for the foreseeable future.

The auditors wrote: "The success of the wider Group being awarded with the Operating Agreement involves factors outside the direct control of the wider Group."

The financial statements, it added, do not include the adjustments that would result if the group and the company were unable to survive.

Elsewhere in the accounts, the Directors' Report said: "The success of the wider Group being awarded the Operating Agreement beyond March 2025 is fundamental to the operations of the Company and the Group as the ongoing tender process represents a material uncertainty that may cast significant doubt on the Company and the Group's ability to continue as a going concern."

The accounts themselves show that Condor Ferries posted a £1.4 million loss from March 2022 to March 2023.

In the 12 months before that, the company was showing a profit of £480,187.

Turnover at Condor Ferries Limited was up in the latest year: £7,593,581 compared to £6,292,007 in 2022.

But the accounts show administrative expenses rising from £3,298,886 to £6,056,948.

At that time, Condor declined to answer any questions about the accounts, including what drove the move from profit to loss and what had been done since to turn that around.