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 Poster: A snowHead
Poster: A snowHead
geoffers wrote:
@Whitegold,
Quote:
The company that took over Cairngorm -- has anyone forensically probed their books or financial activities in recent months?

More "interesting* info on Cairngorm financial state on W.H.
http://www.winterhighland.info/forum/read.php?2,176351,176884#msg-176884

Basically
Quote:
Cairngorm Mountain Ltd which it the company that operates the ski resort....(CGM Ltd)Ö.is wholly owned by "Natural Assets Investments Ltd".

Natural Assets Investments Ltd has one person with significant control of the voting rights etc..

David Gorton with between 25% & 50% of the voting rights.


Quote:
Natural Assests Investments Ltd is insolvent to the tune of £35 million (ie negative net worth)


Quote:
CM spent 1 million more than it earned last year. Follow the money as to where that came from and you arrive at David Gorton.


Quote:
Basically CGML is being used to borrow against...by NAIL..


Im unsure what point the original poster of this stuff on WH was trying to make and much of what he posted doesnít make much sense. Just because you have Ďnegative net worthí does not mean you are insolvent. You can be solvent with negative net assets or insolvent with positive net assets. Do you think the likes of Uber are insolvent?

So, CM Ďspent £1m more than it earned last yearí. I.e. it made a loss. So if we Ďfollow the moneyí does that really take us to David Gorton? If it does, then what the OP is saying is that DG carried the loss or supported the business with the £1m. That doesnít seem too evil. ďCGML is being used to borrow againstĒ - Well, you wonít be able to borrow much against a business with minimal assets and one that seems to have posted an operating loss of £1m. Does this all add make sense?

In your next post you link to a comment that DG is a hedge fund manager. Yes....so what? You then give a somewhat innaccurate definition of a hedge fund. I still donít get the point. DG works for a hedge fund.... so what? Is that somehow relevant to the problems at CM?
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 Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
@foxtrotzulu, sorry if I offended you - I was just trying to highlight the level of mismanagement/suspicion which is being reported on several threads on Winter Highland.

I am not the original poster of these articles, but if you read the WH forums you will see a lot more detail of what has happened to the running down of the skiing in Cairngorm.
snow conditions     
 Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
geoffers wrote:
@foxtrotzulu, sorry if I offended you - I was just trying to highlight the level of mismanagement/suspicion which is being reported on several threads on Winter Highland.

I am not the original poster of these articles, but if you read the WH forums you will see a lot more detail of what has happened to the running down of the skiing in Cairngorm.


No, you didnít offend me and apologies if my response was a bit blunt. I appreciate that you were just reposting but I assumed you were somehow endorsing the post too. I understand that many people involved must be sad, angry, whatever about the situation but I was just pushing back a little at the assumptions some posters were making about skulduggery and some pretty dodgy understanding of how businesses work. (their understanding, not yours).

I donít know CM and certainly donít know Gorton but I would be pretty sure that this is a sorry tale of mismanagement and foolish expectations rather anything more sinister. I would also expect that Gorton himself has lost a shed load of money out of this venture. I donít know if the other ski resorts in Scotland make any money but I think youíd have to be pretty lucky to turn any sort of profit out of such a business.
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foxtrotzulu wrote:
I donít know CM and certainly donít know Gorton but I would be pretty sure that this is a sorry tale of mismanagement and foolish expectations rather anything more sinister.


As a general principle (and in line with Occam's Razor Toofy Grin ) I agree that where things go wrong in business or government/public bodies it's much more likely to be due to incompetence rather than sinister scheming i.e cockup rather than conspiracy. Madeye-Smiley
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@foxtrotzulu, see my post a page back; exactly the point I was trying to make about a few, hopefully well-intentioned, folk trying to be amateur forensic accountants without the full knowledge or facts to enable them to draw with certainty the conclusions which they have.
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CML owe Natural Retreats £1.8m. Admin expenses rose by £1.8m while most admin functions were removed from CML. Does it really take a forensic accountant to see whatís going on when the vast majority of a £6.5m turnover in a company with £36m of net liabilities came from CairnGorm!

Natural Retreats needs to go, if they wonít go willingly they need to be kicked out. There seems to be plenty of reasons under the lease to terminate it!
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Then you can post your own questions or snow reports...
@haggishunter, Can you post a link to their accounts please?
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 After all it is free Go on u know u want to!
After all it is free Go on u know u want to!
Quote:
Can you post a link to their accounts please?

These any use....
http://parkswatchscotland.co.uk/wp-content/uploads/2018/10/CML-accounts-to-Dec-2017.pdf
http://parkswatchscotland.co.uk/wp-content/uploads/2018/10/NAIL-Accounts-to-Dec-2017.pdf
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foxtrotzulu wrote:
@haggishunter, Can you post a link to their accounts please?


Foxtrotzulu - when was the last time you ever went to Scotland ?
Yet you post on every thread with Scotland in the title rolling eyes

Accounts can be found below.
There is lots of evidence, if you follow the paper trail, that Natural Retreats are an asset stripping company.

Natural Retreats, HIE and the financial disaster at Cairngorm
http://parkswatchscotland.co.uk/2017/10/27/natural-retreats-hie-financial-disaster-cairngorm/
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On a more positive note : Seems like it was decent up there today
Not bad for early November...

https://www.facebook.com/mark.w.chadwick/videos/pcb.10160920819600545/10160920812315545/?type=3&theater
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https://www.heraldscotland.com/news/17200040.saving-aviemore-community-buyout-plan-for-cairngorm-mountain-resort/

A bit more news here. A community buy out is probably the future though it may need to be separated from the funicular operation ?
This is a key story for the future of Uk snowsports. I wish them good luck.
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 And love to help out and answer questions and of course, read each other's snow reports.
And love to help out and answer questions and of course, read each other's snow reports.
http://parkswatchscotland.co.uk/2018/11/05/a-scottish-fairy-tale-bank-of-scotland-fergus-ewing-and-the-funicular-railway/?fbclid=IwAR2fdwGY2PpcdsVRrhIXUePTszHDH5rNctQXZUDqfKa0KjTls4m6s3JJSUI
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So if you're just off somewhere snowy come back and post a snow report of your own and we'll all love you very much
@Haggis_Trap,
Quote:

Foxtrotzulu - when was the last time you ever went to Scotland ?
I was in Scotland twice about six months ago.

Quote:

Yet you post on every thread with Scotland in the title

I post on any thread that interest me. Do you have a problem with that?


Quote:

There is lots of evidence, if you follow the paper trail, that Natural Retreats are an asset stripping company.

Natural Retreats, HIE and the financial disaster at Cairngorm
http://parkswatchscotland.co.uk/2017/10/27/natural-retreats-hie-financial-disaster-cairngorm/

I am not an expert at interpreting financial accounts (although I suspect I know rather more than Nick Kempe) but I'm a little unclear where you see evidence of asset stripping. Which assets have they sold?
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 You know it makes sense.
You know it makes sense.
More on the potential community buyout. Would be great if it came off. I'd chip in if there was a crowd funding element to it:

https://www.heraldscotland.com/news/17200040.saving-aviemore-community-buyout-plan-for-cairngorm-mountain-resort/

And an article on the implications for the local area:

https://www.heraldscotland.com/news/17200041.from-scots-chamonix-to-community-on-its-knees-the-race-to-save-cairngorm-mountain-and-aviemore/
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 Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
@mountainaddict, yes, I think that a lot of skiers and boarders, north and south of the border, would chip in, especially if there was some form of 'membership', reduced accommodation, reduced lift passes, etc etc
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 Poster: A snowHead
Poster: A snowHead
@mountainaddict.
Community buy out is a nice idea : however what Cairngorm likely needs an investment of £10 million.
Likely this will need need to come from the Scottish government.

Part of the problem is that funicular has always been a white elephant / flawed project.
It was never ideal for skiers. Plus in summer the VMP inherently limits repeat summer custom (as you cant exit the top station).
Now they likely need £10 million to repair it : but even then it wont make money.
Some more here (I wrote a longer comment in the summary)

http://parkswatchscotland.co.uk/2018/11/05/a-scottish-fairy-tale-bank-of-scotland-fergus-ewing-and-the-funicular-railway/
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 Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
foxtrotzulu wrote:
I am not an expert at interpreting financial accounts (although I suspect I know rather more than Nick Kempe) but I'm a little unclear where you see evidence of asset stripping. Which assets have they sold?


With all due respect: Nick Kempe if clearly far better versed about the goings on at Cairngorm than you wink

Perhaps you could answer some of the questions he asks...

1) Are natural retreats a financial viable company ? The accounts suggest perilous financial situation
2) Why have Natural Retreats not invested in the uplift (as promised when awarded the contract).
3) Why do natural retreats pay 3x directors 100K each when the company is making a loss. Admin costs and wages have risen massively.
4) Why do natural retreats transfer money out of Cairngorm into another of their holding companies ?

Not much good news in the accounts at all....

http://parkswatchscotland.co.uk/2017/10/27/natural-retreats-hie-financial-disaster-cairngorm/
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 Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
One answer may be to de-couple the funicular from the skiing infrastructure. Highlands Enterprise can keep their funicular and the Ptarmigan restaurant and the Community business can buyout the snowsports infrastructure.
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@Haggis_Trap,

In answer to your questions:

If you read what I wrote you will see that I said that I suspected that I knew more than Nick Kempe about interpreting financial accounts, not about the goings on at Cairngorm.

1. I seem to remember reading that the auditors were satisfied regarding financial liability on the basis that the shareholder/parent company had agreed to support the business. However, you and I would agree that it is financially somewhat precarious.

2. As I understand it from the links you have provided, Natural Retreats have invested in line with their contractual obligations but not in line with their stated ambitions.

3. I donít know why NR have paid the directors 300k, but thatís rather up to them. The loss is somewhat irrelevant as we arenít talking about dividends paid out of profits. Admin costs and wages have indeed risen over the years although 2017 admin costs were noticeably lower than 2016. As Kempe surmises the increases could be for a number of reasons, partly because of tasks transferred to Cheshire and IIRC the rent due to HIE was on a sliding scale and also linked to turnover.

4. Do NR transfer money out of CG into another of their holding companies? I canít see it in the 2017 accounts. What I can see is a note from the auditors stating that CML is reliant on support from its parent company for working capital. That implies a flow of cash in the opposite direction.

My point is that NR/CML may be hopeless at business and unable to run the operation profitably (or even run a wee wee-up in a brewery) but I canít see much evidence of any asset stripping or skulduggery. I suspect part of the problem is that mountain users and the local community would like CG run as a charitable enterprise with the sole aim being the benefit of the community. HIE has, I assume, the same goal but in their infinite wisdom believes that the best way to achieve this is through accessing the capital and Ďexpertiseí of a commercial organisation. In general, I think that is usually the right way to go but it clearly isnít working in this instance. Iím not convinced that a community organisation would necessarily do a better job than a commercial organisation unless the community aspect helps to unlock access to public money in some way. Either way, the NR route clearly isnít working whether due to incompetence, greed or whatever.
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foxtrotzulu wrote:
I canít see much evidence of any asset stripping or skulduggery.


Nor can I. What I can see is that the main shareholder, D Gorton, has loaned the group £54,000,000 (yes, fifty four million pounds Sterling) at an interest rate (I calculate) of 7% p.a. See note 28 on page 40 of the NAIL accounts. Against a group turnover of sub £6m and presumably falling, it's hard to see how the interest ever gets paid back, let alone the capital.

Always hard to tell what's actually going on with such a myriad of Ltd Cos and LLPs, bank loans, grants, Directors' loans, disposals etc etc. Would also be good to know what happened in 2018, doubt it has improved.

£54m is no small potatoes for an individual to bet on a business like Cairngorm, which appears to be the major component of the turnover, and we must assume that turnover is going to take a big hit this coming year. The amount owed to D Gorton goes up by around £3.7m a year. Something has to give!

I'd be fascinated to know what relations are like between NR and HIE. Who is responsible for consequential losses of having no funicular?
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Pruman wrote:
I'd be fascinated to know what relations are like between NR and HIE. Who is responsible for consequential losses of having no funicular?


That is the $64,000 question! (Actually the amounts involved will probably be far greater Wink )

From my limited reading it seems that under the terms of the lease NR are responsible for performing maintenance of the infrastructure at Cairngorm (apparently they are supposed to submit to HIE at the start of the year a proposed maintenance schedule for HIE's approval). Although some observers have provided evidence (e.g on the dangerous drag lift wooden access platform at the Ciste T-Bar that was identified by an independant report in 2016 as needing repair before the coming winter season and wasn't repaired until summer 2018) that NR are not doing essential maintenance and HIE are not monitoring how and to what extent maintenance is being performed.

The second link above quotes the lease which says:

2 Maintenance Works to Premises [NB premises is defined to include the entire ski area not just buildings]

2.1.1 carry out all maintenance works without necessity of demand thereof: and

2.1.2 without prejudice to the foregoing generality, ensure that the Uplift Infrastructure is in good and safe working order at all times.

Presumably NR as part of their due diligence when they bid for the lease inspected all structures and accepted them in their existing state? Madeye-Smiley
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How about the whole lot goes into administration or even liquidation and surprise, surprise Natural Retreats 2019 (The ultimate beneficial owner being, hmm, let me guess) buy all the assets at a substantial discount leaving the debt behind.

From what I have read here and elsewhere, as far as I can see there are three options at play here.

1. Someone is exceptionally passionate, philanthropic even, about Cairngorm mountain

2. Someone is being naÔve, stupid or perhaps reckless, about the financial viability of Cairngorm mountain

3. Someone is being very devious about acquiring assets at a low cost, reducing tax liability or some other ingenious scheme to make money

Maybe we should have a vote
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@foxtrotzulu, I could fill a book with what you do not know about how business works. You seem to like to give the impression that you are some sort of expert and know more than others about the world of commerce. I wonder on what basis? I can probably guess, but would like to hear from you where your "expertise" comes from.
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@zikomo,
Quote:

@foxtrotzulu, I could fill a book with what you do not know about how business works. You seem to like to give the impression that you are some sort of expert and know more than others about the world of commerce. I wonder on what basis? I can probably guess, but would like to hear from you where your "expertise" comes from.


Blimey - Who rattled your cage? I don't think I'm 'some sort of expert'. I know more than some and a great deal less than many. Where does my 'expertise' come from? Running a limited company for 20 years and spending a fair chunk of my time working with other companies where having a very basic understanding of balance sheets and P&L statements is essential. Am I a chartered accountant or anywhere close to it? No. Nowhere near. Do I know my WACC ratios from my Greenshoes? Yes.

@dsoutar,
Quote:

How about the whole lot goes into administration or even liquidation and surprise, surprise Natural Retreats 2019 (The ultimate beneficial owner being, hmm, let me guess) buy all the assets at a substantial discount leaving the debt behind.

Suppose CML goes into administration as seems likely, just what are the assets we are talking about? The accounts suggest that they total just £1.2m. Is there much debt at company level? Even if they did dodge the debt and get all the assets at a knock-down price how likely is it that they would get an operating license? Even if they did get one, would it really be that much of a license to print money?

As for your three options:
#1 is possible. Frankly I've no idea how the owners feel about Cairngorm. If they were passionate about it at the start then I rather imagine that's coooled a little over the years
#2 is most likely IMO, if only because the entire world of commerce is littered with similar examples
#3 is also possible, particularly regarding tax liability and ingenious schemes. As I've said above I can't immediately see how the asset acquisition theory makes much sense but I'm happy to be proved wrong.

Purely looking at the accounts and what has been posted online my best guess of what's happened is that CML took on the lease with all sorts of good intentions and grand plans. Those all fell apart pretty rapidly and the business struggled as well as CML/NR losing the confidence of the public. As time goes by a combination of bad luck, poor management and overly optimistic predictions has brought the whole thing to a standstill. If there have been any financial shenanigans going on then I suspect they are just the icing on the turd rather than the root cause. You'd have to be brave/foolish to take on a business like that in the first place.
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Lol.

The company has about 1000% debt and is effectively bust.

To be fair, this has not just appeared overnight.

It has been brewing for decades.

* 2001 = world's worst snowtrain opens... hugely overbudget...
* 2001-2017 = snowtrain stops working every time it snows.... lost revenue...
* 2018 = world's worst snowtrain shuts down... materials crack when it gets cold...

It's a disaster.
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 snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
https://www.bbc.co.uk/news/uk-scotland-highlands-islands-46124208

We shall see...
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 And love to help out and answer questions and of course, read each other's snow reports.
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A new vision to unlock unrealised winter snowsports potential, following a massive and doubtless expensive study which concludes that they need - wait for it - 2 chairlifts rolling eyes
I shall settle down to read Winterhighland's comments with great interest Laughing
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 So if you're just off somewhere snowy come back and post a snow report of your own and we'll all love you very much
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Interesting to see the comments that the Cairngorm Mountain FB page is no longer visible
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 You know it makes sense.
You know it makes sense.
Grizzler wrote:
A new vision to unlock unrealised winter snowsports potential, following a massive and doubtless expensive study which concludes that they need - wait for it - 2 chairlifts rolling eyes


If I read the report correctly it suggests that both chairlifts should be serving the Coire Cas area, rather than one chairlift for there and one serving the Ciste? If they don't propose any uplift for the Ciste then that's a huge opportunity missed.
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 Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
Uplift review video from HIE just out -

http://youtube.com/v/BwVKJURXKGU&fbclid=IwAR3LEYOZrpDPdcYinazSO684bFjYi2rC-tqq6TDHkRShQ56xc8HrbBoVsEI
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 Poster: A snowHead
Poster: A snowHead
Quote:

If I read the report correctly it suggests that both chairlifts should be serving the Coire Cas area, rather than one chairlift for there and one serving the Ciste? If they don't propose any uplift for the Ciste then that's a huge opportunity missed.

From the video the review seems to completely ignore Coire Cas, this would seem to be a huge mistake. At busy times the top carpark cannot cope so you have to park at the Coire Cas car park, so without any uplift from there users are consigned to the crappy transfer bus. Also in good conditions it is entirely reasonable to ski all the down to the Cas car park - again only to have to wait for a bus.
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 Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
Hi Robin, I think you mean Coire na ciste.
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 Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
Haven't seen the video etc, but not replacing the Ciste chairlift is, well, not going to enamour the proposals to a lot of folk (nor my knees).
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Klammertime wrote:
Uplift review video from HIE just out -


More smoke screen from HIE.
Just like the hot-air when they handed tender to Natural Retreats promising winter-X games for Aviemore.
These latest plans will also never see light of day.
A convenient distraction from emerging fact the funicular is in a very bad way....

Uplift consultation cost them £80K.
In return they get a swish you-tube video proposing to put a chairlift on windiest part of hill (above the Ptarmigan t-bar at 3500ft).
The plans are so fundamentally flawed they don't even merit serious discussion.
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Anyway, snowHeads is much more fun if you do.
That plan also ignores the fundamental fact that the funicular is already half way through its serviceable life, notwithstanding the current possibly showstopping technical issues. According to the Dopplmayr website:
Quote:
these systems include a long service life of around 40 years and moderate maintenance costs

https://www.doppelmayr.com/en/products/funicular-railway/

That means, by the time that plan is delivered, they will need to be thinking about another way to the top anyway. What then? Another £27m?
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@Pruman, Iím guessing the 40 year lifespan refers to the latest models. I thought I had read somewhere that the CG funicular had an expectedly lifespan of 25 years. [Edit: The 25 year Ďlifespaní didnít relate to the expected life of the funicular but was a condition imposed by the EU who contributed to the funding. I.e. the rwy should operate for 25 years without any change of use or the funds will need to be repaid.] I suspect that different elements have different lifespans too. The track and supports inside a tunnel might last twice as long as those outside while the carriage itself might be quite short lived.
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Compare the value for money of the funicular (17 years old £20m plus and now broken) to the old tbars which have given reliable operation over 50 years and which can operate indefinitely with relatively straightforward in house refurbishment.

6 person chairs Might work well on a sunny April day but I wouldnít fancy getting stuck on one near the summit of Cairngorm. Even val disere has kept some of its old pomas and has reinstated the 3000 poma, perhaps in recognition of vulnerability to high wind speeds.
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 After all it is free Go on u know u want to!
After all it is free Go on u know u want to!
Worrying thing is the £80k consultancy was given to a U.S company rather than one which had local knowledge of the unique conditions at Cairngorm
From W.H....
Quote:
SE group who were the consultants on this....USA based of course...like certain NAIL companies....

[segroup.com]

they have done some ski resort stuff:-

https://segroup.com/project/

But it might help if they had seen the place & understood it...
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You'll get to see more forums and be part of the best ski club on the net.
Is Alan from winterhighland's second name mackay?
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yes^
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