Ferry operator Caledonian MacBrayne has reported an increase of 6.8% in passenger carryings  to 5.2 million and car traffic by 4.9% to over 1 million in its Annual Reports and Accounts which were laid before Parliament at Holyrood today (Wednesday, December 22).

Two new ships, MV Loch Portain and MV Coruisk, entered service; the new Sound of Barra service commenced and an order was placed for a new vessel for the WemyssBay to Rothesay route in the Annual report which covers the year ending April 2004.

In his opening statement to the Report, Company Chairman Dr Harold Mills says that Caledonian MacBrayne will continue its ongoing focus on maintaining and improving standards of safety, efficiency and reliability consistent with providing a 'value for money' service. Describing 2003-04 as “a successful year financially and operationally”, Dr Mills reports that CalMac “recorded a profit of £777,000 before tax and after receipt of deficit grant of £25.9 million.  This is a satisfactory outcome given our remit to 'break-even' before tax and after receipt of deficit grant from the Scottish Executive.   Compared with last year, our fares revenue increased by £2.9m which reflects the exceptionally good weather in summer 2003, our new marketing initiatives designed to promote our shipping services to a wider range of travellers and our focus on customer satisfaction.  Our operating expenditure increased by £9.5m, resulting from a number of factors including costs associated with ensuring SOLAS compliance (£1.3m), additional manning requirements under EU working hours regulations (£1.2m) and the introduction of two new vessels (£1.1m), as well as a lump-sum payment to the Company pension scheme (£1.5m). “

The Report notes that CalMac met all the performance targets set by the Scottish Ministers relating to service reliability and punctuality, fares income and staff costs.  In traffic terms, it was a year of continuous and steady improvement with passenger and car carryings showing a year-on-year increase of 6.8% and 4.9% respectively.  As a result, for the first time for many years, CalMac’s carryings exceeded five million passengers and one million cars respectively.  Commercial vehicle carryings were broadly similar to those in 2002-03. 

Detailing a number of additions to the fleet and improved services to communities, Dr Mills adds: “Vital to development and improvement of services is an informed awareness and appreciation of the needs of the communities we serve.  During the year, we have continued our efforts to improve communication with our customers and the communities and we have strengthened our endeavours to achieve transparency and mutual understanding.  The Company recognises that safety of operation of our ships and ports is our overriding objective.  While the safety record of the Company remains excellent, the Company considers it essential to keep under constant review practices impacting on safety.”

He concludes: “Whilst always mindful of our unique place in Scotland's maritime history, the Company needs to have a modern, progressive, forward thinking and ambitious approach in developing its operations. “

Annual Report

The Chairman also comments on improvements in the Company’s Pension Fund position: “In common with other organisations, the Company's Pension Scheme remains in deficit, as shown in the note on the FRS17 transitional disclosure.  There has, however, been an improvement in the past year, assisted by the payment of £1.5m into the Fund by the Company.  The ongoing funding of the scheme is not, however, determined on the basis of an FRS17 assessment, but on the basis of a full actuarial valuation of the Fund performed by an independent actuary.  Such a valuation as at 6 April 2004 has been undertaken and the Board, guided by the Trustees of the Pension Scheme, are reviewing the funding and benefits of the Scheme in future years on the basis of this valuation. 

Lawrie Sinclair, CalMac’s Managing Director, in his own review of the period covered states that CalMac is confident that the level of fares and the standard of service provided for our customers represent value for money.

This has been a year of great achievement in a period of continuing uncertainty for the Company in the run up to the 'State Aids' tender process, whilst highlighting the closure of the linkspan at Dunoon during the period April to June 2003 as a key difficulty in the year. Mr. Sinclair states: “This resulted in loss of traffic over the period estimated at 42,000 passengers, 25,000 cars, 1,900 commercial vehicles and 250 buses and the commercial vehicle elements of the operation have not yet been fully recouped.  This experience and a similar though less critical experience at Stornoway with the temporary closure of one of the two linkspans, highlighted the need for our greater awareness of the implications of third party reliance.

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 document 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.


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; in 2003-4 it was 25.9million.

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 2003, more than 5 million passengers and over one million accompanied cars were carried on the Company’s services.

ends