PRESS RELEASES
2009 - The Year in Review
2008 - The Year in Review

MEDIA
March 5, 2009 - Article: Business Review Week
January 2009 - Article: Offshore Yachting Wally Regatta
September 24, 2008 - Artricle: Herald Tribune
May 2007 - Article: Ocean Magazine
November 2005 - Article: Ocean Magazine

2009 The Year in Review.

With the start of 2009 the full impact of the financial crisis became apparent. The initial impact was the number of forced sellers in the market and a rapid decline in prices. Sentiment was further affected by the financial stability of several of the yacht manufacturers. Quiet simply there was a collapse in confidence.

On a more positive note this downturn had one positive facet that had not been present in previous recessions. The yacht market over the last 10 years has acquired a critical mass that provided a limited cushion to the full effects of the crisis. Looking ahead we have a long way to go before seeing real growth returning. With sellers outnumbering buyers the second hand market will remain flat for some time to come. For new yacht construction in late 2009 we saw some modest increase in level of interest and some orders placed. ASM signed a 63 m new construction for an existing client.

The yacht building industry will need to consolidate as it’s over branded and will also need to substantially improve its efficiency. Yacht builders and their clients will need to work more closely for their own protection and we are advocating that both buyer and seller should enter into financial commitments when signing a new construction contract to provide security for both parties. Its on this basis we see a long term bright future for yachting as a mature industry.

Conversely yachting professionals on all sides will need to look closely at their business and provide cost effective and better informed advice and solutions for their clients. changes in VAT rules that took effect on the 1st January 2010 will be significant as will the looming and much confusing and potentially damaging introduction of the Maritime Labour Convention. We see the end or curtailment of the Italian and French VAT leasing schemes that have been so successful in bringing new owners to our industry.

Other clouds on the yachting horizon are the changing and aggressive attitude of the policing authorities of our industry. Most European countries have empty Treasuries and the yacht industry is being targeted as a source of funds. Under attack will be the cross border leasing structures and commercially operated yachts where the only charterer is the ultimate beneficial owner.

The recession has seen a significant increase in the number of yachts changing from private to commercial registration in an effort by owners to attract some much needed income to assist with the upkeep of their yachts. This has been good for ASM but in reality it puts more competition into the market and pressure on yacht Captains and Crew to deliver the best possible product.

Our forecast though is that 2010 and probably 2011 will be quiet with low to modest growth.

For Arrow 2009 was a watershed year where the crisis provided us with many opportunities with savvy yacht owners reviewing their options and opting for restructuring to cater for the changes in yachting legislation. We were also involved with several major transactions with banks as mortgagees in possession and in obtaining funding for several clients.

For 2010 we will be extending our range of services and have commenced work on establishing a division of Arrow Services in Malta where we see great potential. In addition with Mannmade, a Corporate Service Provider in the Isle of Man and with VAT expert Steve Malley of Yacht Solutions Europe we have formed Cornerstone Yacht Group.

Cornerstone is the answer for those clients that increasingly recognize the need for a single Independent Consultancy that can provide the full range of yachting services in all areas except brokerage.

Further Cornerstone Crew Management (“CCM”), a Cayman company, was established provide a crew management company for yacht owners. CCM will meet the exacting strictures of the Maritime Labour Convention and provide a cost effect solution for yacht owners to meet the new rules.

Arrow has strengthened its ties with several major banks involved in yacht lending acting as consultants and services providers for registration etc. Following the financial and debt crisis the future of yacht financing will be a much changed industry. The Banks will be looking to more stringent lending criteria and the involvement of companies such as ours to ensure their lending exposure is better managed and the borrower has more specific obligations to maintain their vessels to a high standard.

Our services continue to find favour with many major law firms who see the benefits of working with an independent yacht consultant.

Let’s see what 2010 brings but I am sure we have still many surprises to come where our services will be much in demand.