We are starting to see the effects of lack of cash flow to ability of businesses to hold assets and hence opportunity to secure marine assets at lower values though increased supply and low demand. Those with big enough cash reserves may be able to ride out the 2-3 year period with minimal impact on asset values. However if the assets need to be sold to meet debt there will be significant shifts well below book values.
We have commenced listing minor assets on our spares/equipment page and will build on this over coming period to en-mass specify the assets breaking away from previously operational businesses. We believe at least a slide towards 50% reduction in asset value is starting. As government financial support is reduced without a ramp up of tourist numbers, the strain on operators will increase. Currently the market has softened in vessels by around 5-10% on pre covid numbers for commercial vessels and expect that if cash flow is not restored within 12 months the 50% reduction projection will emerge.
The virus impact on tourism businesses has commenced particularly where second wave effects are blocking domestic transfers internal to a country.
The issue There is a demand that will not be met in the future to support Australian aluminium manufacturing programs due to the reduction in manufacturing capacity in country. This is a trend occurring in the Australian aluminium manufacturing sector that appears to have to date, gone under the radar for the broader market.
We have brokered the sale of marine businesses and boats worldwide for over 15 years. Director Neil Houlahan shares 5 things that will make the process easier and put more money in pocket when it comes to business sale.