Ferry operator Caledonian MacBrayne today (October 6) presented its annual report and financial statements for the financial year end 31^st March 2006, which detailed structural changes implemented in response to the tendering process for the Clyde and Hebrides Ferry Services.

In the opening statement to his seventh and final report as Chairman of the company, Dr Harold Mills confirmed details of the organisational changes. He said, “The Minister instructed the Board to plan for and implement the associated arrangements. This involves the restructuring of Caledonian MacBrayne Ltd into an asset leasing company, and the creation of a new company to act as the bidding vehicle in the tender process. An offshore crewing arrangement was put in place and to achieve this two new subsidiary companies were set up, Caledonian MacBrayne HR (UK) Ltd and Caledonian MacBrayne Crewing (Guernsey) Ltd.”

The Annual Report discloses a Group loss for the financial year of £1.9 million after receipt of deficit funding. The Chairman commented: “The financial results include the implementation of FRS:17 Retirement Benefits for the first time which required the deficit in the CalMac Pension Fund to be taken into account in the financial statements. They also recognise the Company’s share of the deficiency in the Merchant Navy Officers Pension Fund which includes £3.7million to be settled in future years.

The report shows the company experienced a £1.8million (3.6%) increase in fares revenue to £51.7million and an £11.3million (15.5%) increase in operating expenditure to £84.3 million, which included increased pension costs (£4.1million), fuel charges (£3.7million) and staff costs (£2.4million).

A capital contribution will be provided by the Scottish Executive to accommodate the financial impact of the restructure. Commenting on this Dr Mills said, “To strengthen the capital base of the Company in advance of restructuring, the Scottish Executive has provided capital contributions of £16 million. £12 million of this has been accounted for in this financial year and the balance will be accounted for in 2006-2007. These contributions will be paid to the asset leasing company.”

The company met all its targets for the year as agreed with the Scottish Executive, whereby performance is measured in terms of service reliability and punctuality as well as the relationship between fares income and operating costs.

In his statement Dr Mills also noted several highlights for the year including: ISO 14001 accreditation achieved; MV Bute taking up service on the Wemyss Bay/Rothesay route; work on provision of a second linkspan at Oban underway; a second new vessel for Wemyss Bay to Rothesay service and a new vessel for the Largs to Cumbrae service. 

Managing Director Lawrie Sinclair supported the Chairman’s positive overview of the Company’s performance in what has been a challenging year, confirming carrying figures of over 5 million passengers and one million cars and commercial vehicle carrying increased by some 9.2% to 94,000. 

Mr Sinclair detailed a number of service enhancements and commented: “The improvements are aimed at ensuring that the Caledonian MacBrayne customer experience is maintained to the high standards consistent with the provision of a quality lifeline ferry service.”

He added, “Alongside implementing the structural changes required in preparing the Company for the tendering of the Clyde and Hebrides Ferry services, the Company continues to build on its strengths and to focus on maintaining and improving the safety, comfort and quality of service for our customers.”

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 operating expenditure. The report reflects a consistent rise in commercial carryings across all routes, largely related to economic activity in the islands generally. Other sections of the document report on aspects of the company’s operations including corporate governance, remuneration, profit and loss and cash flow statements.

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 at Gourock or at the Company’s Port Offices by arrangement.

Ends.

For further information on the contents of this News Release, please contact Hugh Dan MacLennan, Head of Communication and Customer Care, Caledonian MacBrayne.   Tel: 0776 435 4021; e-mail hugh.maclennan@calmac.co.uk.

Caledonian MacBrayne and CalMac are trading names of CalMac Ferries Limited

Issued: Friday, October 6,  2006 :1300