In an update statement key members of the trust board which oversees the railway also say they are pleased with the continuing support they are receiving from visitors but reveal they are managing with a reduced number of vital volunteers due to the pandemic.
Despite this they look forward to running their famous Christmas specials this year although this will be with a reduced number of trains.
In the statement Llangollen Railway Trust Ltd says:
The Trust has been advised by the administrators’ lawyers that the £30,000 placed in a separate bank account by the directors of the Plc trading arm, intended to cover sales of tickets, experiences, etc in advance, will have to be made available to the general body of creditors.
Whilst this is a very regrettable revelation from our viewpoint, we also have to acknowledge the administrators are only fulfilling their legal obligations.
Having made legal representations ourselves also, the administrators sought opinion from legal counsel and that opinion is unequivocal.
The administrators will now be in touch with numerous customers fairly shortly to invite them to claim in the administration.
Phil Freeth, finance director, said: “We are very disappointed with this outcome and wish to extend our sincere apologies to all those customers of Llangollen Railway Plc who will lose money over this. At the same time we also have to acknowledge the administrators are only doing their job as the law dictates.
“The directors of the PLC didn’t do anything wrong particularly, it is fairly common practice to use advance sales and customer deposits to fund working capital. However, we can’t have this situation arising again if it can be avoided.
“One of the issues were the funds were only put into the separate account, very late in the day, from an overdrawn account. The directors of the new board of the Trust have therefore created a Sales in Advance account, cash backed from an account substantially in credit, with immediate effect.
“It will therefore show in our audited accounts at the coming December year end and thereafter. This will cover advance sales at one time and hopefully this early step will prevent any similar recurrence should the Trust fall into financial difficulties in future.”
In consultation with the National Heritage Lottery Fund it was prudent to withdraw our application for finance to fund the post of general manager for two years. The NHLF remain supportive but we have to work on governance, organisational structure, culture, strategic plan, business development plan, documented policies and procedures so as to establish firm foundations before they will entertain a further application.
Pete Edwards, chairman, commented: “There is a lot of work to do here and most of it will be invisible. Nevertheless it is crucial to get this done so as to place the Trust on a sound operational footing.”
It is with thanks to donations from so many supporters, grants and a significant legacy that cashflow-wise the Trust is secure through to 2023, which is not to say we can relax – cashflow will always be very important. We have no debt, it will remain that way, and creditors will continue to be paid within a few days of receipt of invoice.
September trading was around 10% over budget and, whilst the initial enthusiasm after re-opening has calmed, with are very pleased with the continuing support we are receiving from out visitors.
Looking ahead to Christmas and the Santa Mince Pie Specials, there will be fewer trains this year. In common with many other railways on other visitor attractions heavily reliant on volunteers, our volunteer cohort is much reduced since the pandemic.
We are also limited to one steam locomotive only unless we can hire another in but that is proving difficult. We have therefore taken the prudent decision to operate single train running on a total of 13 days only. Details will be published on our new website (a major challenge itself) which will hopefully be operative within the next two weeks.
Mike Williams, operations director, said: “Social distancing will need to be managed as best we can on both the platform and on the trains so we ask visitors to bear with us. Hopefully it will be unnecessary, but if we have to use diesel traction in the event of a locomotive failure the carriages will, most unfortunately, be unheated so we ask visitors to wrap up warm!”
Visitors coming by car should be aware there are works affecting traffic in Bridge Street, and reduced parking in the long stay car park, so would be well advised to allow a little extra time to find a parking space.