My compliments to you Philip on a well written piece. On the whole I thought it well balanced, I do wonder if they would still be in business but for Ed's obsession with secrecy bordering on the paranoia.
I have had eleven years of happy boating on my Challenger boat and I cannot fault the hard work that Ed and Gill put in. Ed may have been dictatorial but it worked more in our favour than against.
Just to correct you on one item the admin fees were £350 per 8% share which would have risen to £400 in April.

Phil, I agree with Peter, an excellent piece, well written and probably very close to the mark, although I personally feel that the effects of the Challenger collapse will not be as long lived as you do.

As you know from your time at Ownerships, in any shared ownership business the management fees by and large only pay for the costs of the management service provided. The costs of marketing and growing the business come from the profit made on selling new shares.

When we launched our share scheme five years ago, it was against a backdrop of two dominant aggressive well established competitors - Ownerships and Challenger - and I don't think that most people thought that we would last longer than six months. We differentiated ourselves from the then market by offering something different in both allocation system and boats, and it worked. We are still here whilst others (Boatshare Company, Deeside Narrowboats, Goldsborough Boatshare and, of course, now Challenger to name a few) are not.

Ownerships, to their credit, reacted to our arrival by raising their game and improving their product by introducing the "new generation" boats. Challenger, on the other hand, seemed not to react at all and continued to offer a tired product with inevitable consequences. Their new share sales dried up.

Last year, both ourselves and Ownerships sold three new boats. I believe that Challenger sold none. The move to change the source of their boats from Blue Haven to Aqualine was too little too late and the inevitable happened. A bank will not support a business that is both loss making AND has lost its market position to the extent that it is not selling at all.

We are in the very fortunate position that we are a diversified business. We are a major boat builder as well as a share boat operator. That means that a downturn in new share sales will not put us under the same pressure as it did Challenger. In any case we have already sold enough shares in our 2008 boats to more than cover the costs of building them, even if we sell none of the remainder. And there will be ex-Challenger customers out there looking for alternatives for 2008.

Will the Challenger collapse affect customer confidence? Undoubtedly. The market for new boats suffered a marked dip after both the Heron and Lees fiascos.

Will the effect of the Challenger collapse last long? Personally, I doubt it. Whilst the customers of Heron and Lees lost a lot of money, and there was a lot of bad press over some months as a result, I doubt that the customers of Challenger will suffer the same fate.

The boats (with the possible exception of a few shares), belong to the customers and the Liquidator of Challenger cannot touch them. The Challenger scheme appears to have been properly administered and the syndicate funds were correctly kept in client bank accounts, meaning that they belong to the syndicates, not Challenger, and so again the liquidator cannot touch them.

A few unlucky customers might lose their deposits on the 2008 shares that were sold, but this is likely to run to a maximum of £500 per customer - enough to make the eyes smart, but not to kill. The biggest losers of all with be trade suppliers and the Rimmers themselves, as it is likely that Challenger's bankers obtained personal guarantees from them for the loan facilities they provided.

In six months time a far more important factor in shared ownership sales will be the state of the economy than Challenger's collapse and most people when asked will say "Challenger who?". We are, after all, inherently optimistic, being programmed to run through life at a frenetic pace "achieving", whilst conveniently forgetting that the unlimate destination for us all is a six foot deep hole.

Replying to:-




"Ownerships, to their credit, reacted to our arrival by raising their game and improving their product by introducing the "new generation" boats."




errmmm - no.