Isle of Wight ferry firm Wightlink's profits shown in accounts

Karl Hunter – Shanklin.

Earlier this year I looked through Wightlink’s latest set of published accounts for 2021 and 2022.

I wanted to know the truth behind Keith Greenfield’s (CEO of Wightlink) mid 2021 claim, that without taxpayer subsidy, the full cost of ferry services will be borne by Wightlink customers through ticket prices, and the narrative that unless Wightlink secured financial emergency support the firm risked bankruptcy.

The government handouts to Wightlink totalled £6.4 million in 2021 with a further £894,000 in 2022.

Prior to this the accounts from 2017-2019 showed Wightlink made net profits of over £50 million.

So why would a company that made £50 million pure profit over the previous three years need to take public money?

Looking into those years revealed that over 90 per cent of that profit was payout as dividends apportioned between Arca Shipping (Wightlink’s parent company) and Wightlink directors, detailed in my letter to the County Press dated July 10, 2021.

However, it’s only Wightlink’s latest published accounts (2021/2022) that would reveal the accuracy behind Mr Greenfields’ claim.

Firstly, it’s important to note that Wightlink is not a public limited company, meaning the public cannot own shares. It’s a private limited company and so shares are owned by directors and the parent company Arca Shipping.

In 2021, Wightlink received a £9.387 million insurance payout for the reduction in revenue caused by the Covid crisis. This negated the need to claim against the taxpayer and take the public’s money.

Barely a year later in June 2022, after Wightlink received that huge sum from the government, they paid themselves £8,000,000 in dividends.

The obvious question is why take taxpayers’ money, if you can afford to give yourself £8 million from profits, especially given they didn’t maintain the services and took so long to return them?

What’s more, Wightlink waited until the 2022 accounts were closed off before declaring they paid themselves £8 million in dividends.

Therefore, you won’t see this sum entered on the balance sheet for 2022. Instead, it is listed as the last entry on their financial statement that simply states “In June 2022 the company declared a dividend of £8,000,000 in total.”

If on one hand you’re pleading poverty and taking huge sums of public money, but on the other hand paying £8 million in dividends, then it looks like taxpayers’ money has just subsided their dividend payouts, when it should have gone to maintaining services.

The reality is if you can afford to pay yourselves £8 million so soon after receiving public money, you didn’t need the public’s money.

This is especially true if one considers that since 2017, Wightlink has made £77 million net profit.

Furthermore, Wightlink’s accounts are extremely complicated with parent companies of parent companies four times over, so ultimately, outside the directors’ allocation, it’s hard to trace whose pockets the remaining dividends finally fall in.

There remains one last shocking, but not surprising truth. Having looked through Wightlink’s published accounts dating back to 2017, I discovered Wightlink has effectively paid no tax.

Over the last six years, Wightlink appears to have received a further £2.2 million of the public’s money.

Since 2017, Wightlink has paid £4,625,000 in tax, with tax rebates of £6,822,000.

The accounts show Wightlink can afford to offer Islanders a much better deal, and with average net profits of nearly £247,000 per week for the last six years, it certainly does not need to be subsidised by the taxpayer.

Yet, Mr Greenfield has the gall to claim ticket prices would increase if this was not the case.

In light of all this I have written to the Department of Transport asking what criteria need to be met to take a closer look at Wightlink’s accounts.