Ferry operator Caledonian MacBrayne has reported a year of consolidation and successful performance which enables the company to focus on its many challenges ahead with renewed strength and confidence.

Company Chairman Dr Harold Mills, in the Annual Accounts for 2002-03 which were presented to Ministers today (Tuesday, December 16) reports a 0.7% increase in passengers; a 1.7% increase in cars and a string of successfully achieved performance and financial targets.

Dr Mills states: “We recorded a surplus of £345,000 after tax and receipt of a deficit grant of £18.9 million from the Scottish Executive. The Company has met the performance targets set by Scottish Ministers covering the quality of service, efficiency, finance and staff costs.  In early 2002, we secured Scottish Executive funding of £12.6 million to build two new ships. The benefits flowing from the introduction of these two new ships – MV Loch Portain and MV Coruisk – will have impacts across the network.”

Dr Mills adds that the performance in 2002-3 provides a solid basis on which to build the Company’s bid to secure its future under the State Aids tendering process.  “Developments and improvements across the network are an essential part of Caledonian MacBrayne’s commitment to the lifeline services required by remote communities. This commitment was taken forward in our ten year Indicative Investment Plan. The plan includes proposals for new vessels on the WemyssBay to Rothesay route, a second linkspan at Oban and investment on the Islay route.”

Caledonian MacBrayne’s Annual Report includes full details of all aspects of the Company’s financial arrangements. In common with other comparable agencies and companies, Pension Fund arrangements are receiving close attention. 

Dr Mills states: “It is a matter of concern, both for our employees and our shareholder that the Company’s pension scheme is in deficit as at 31 March 2003, as shown in the FRS17 transitional disclosure. However, the ongoing funding of the Company’s pension scheme is not determined by FRS17, but by the full actuarial valuation performed by the Company’s independent actuary. The next full actuarial valuation will be carried out as at 31 March 2004 and the Board will review the position on funding and pensionable pay levels in future years based on this valuation.” Meantime, Caledonian MacBrayne continues to monitor the situation and will take any appropriate action to secure the interests of Fund members. This may, at some point in the future, involve increased levels of contribution from both employer and employees.”

Dr Mills concludes his Chairman’s remarks by summarising the way ahead. “As we approach the next stages of the competitive tendering process for the provision of Clyde and Hebrides Lifeline Ferry Services, we, as a Company, are aware of the challenges we now face. We have plans for the future which include service improvements based on the requirements of our customers and the communities we serve. They remain focused on maintaining and improving standards of safety, efficiency, reliability, value for money and flexibility. With these plans I am confident that the Company is well prepared for whatever lies ahead.

In 2002-03, as in all years, the success of Caledonian MacBrayne is built on the hard work and commitment of all the officers, crew and staff of the Company both on the vessels and in our terminals and offices. I would like to thank them for their support without which we will not be able to prosper and grow.”

The Annual Report carries a comprehensive range of statistics detailing the Company’s performance over the last five years and an analysis of turnover and expenditure. Other sections detail other aspects of the Company’s operations, including customer care and facilities, community events and joint marketing initiatives.

The full Report is posted on the company’s website www.calmac.co.uk and copies are available from Gordon McKenzie, Company Secretary, Support Services in Gourock or at Port Offices by arrangement..

Ends

For further information on the contents of this News Release, please contact Hugh Dan MacLennan, Public Affairs Manager, or Debs Brown, Caledonian MacBrayne.

Tel: 0776 435 4021/01475 650 273; e-mail hugh.maclennan@calmac.co.uk

Background note:

Caledonian MacBrayne (CalMac) is a limited liability company whose share capital is wholly owned by Scottish Ministers as successors to the Secretary of State for Scotland following the establishment of the Scottish Parliament and the Scottish Executive. It has a financial responsibility set by its shareholder to break even, after receiving an annual revenue deficit grant to meet its operating loss. In return for the grant, CalMac provides a network of services approved by Scottish Ministers under an Undertaking. This Undertaking sets out the conditions under which the grant is paid.

All of the services currently operated by CalMac within the undertaking require subsidy within the overall grant, as the normal operation of market forces would not ensure a sufficient service level to the communities all the year round at acceptable fares levels.  This is done to support approved services which, in the opinion of Scottish Ministers, are necessary to maintain the economic or social conditions in the Highlands and Islands.  In 1997-8 the grant was £10.5m; in 1998-9 it was £14.4m; in 1999-2000, it was £15.0; in 2000-2001 it was £19m; in 2001-2002 it was £20.4m; in 2002-3 it was £18.9million.

CalMac currently owns and operates a fleet of 31 vessels providing passenger, vehicle and shipping services to the islands off the West Coast of Scotland and in the Clyde estuary. Two other vessels are retained on Charter.  There are currently 26 routes within the network. In 2002, just fewer than 5 million passengers and over 900,000 accompanied cars were carried on the Company’s services.

Issued:  Tuesday, December 16, 2003 : mid-day