To use a different example. I have “committed” to build a house on a plot of land I’ve just bought. I’m going to build the house in 2030. I have agreements in place with my suppliers and contractors, some of these legally binding contracts that cover various exemptions and exceptional circumstances etc. The house build is projected to cost me £10M (I like my houses to be big and luxurious). However, up until now, I have only spent legal fees (£50) and the purchase of the land (£1,000). My current year accounts will show £1050.00 as ”committed” to the project, if indeed I wanted to declare the project at all, which I have no obligation to do, provided the spend can be audited and has an appropriate paper trail. My final costs might be £10M in 2030, but I will have no obligation to show that in my financial reporting until the year it falls. So the Drayton financial reports in 2022 need to be read very loosely when trying to ascertain what it might potentially show about the 2024 project. They are also not likely to want any old tom dick or harry competitor seeing what they spend on ride hardware, so it will be buried and phrased in such an ambiguous way that it will be very difficult to pull the true costs out, regardless.
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Drayton Manor Park
- Thread starter Matty
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jon81uk
TS Member
The commitment can also cover funds they have committed to give to a supplier by issuing a purchase order, but have not yet been invoiced for. It doesn't mean its the entire budget for the project, just the funds that now cannot be spent on anything else as the purchase order has made the promise that they will go to that supplier. There will likely be further purchase orders for other hardware.
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Not sure what I’ve done to upset you, but sorry if you are. Just trying to explain. Take it or leave it, entirely up to you. All the best!
DistortAMG
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I'm confused.
You are talking there as if a commitment is money spent, it is not. The way we have ALWAYS dealt with commitments here and on our reports, is money that will be paid at some point, based on contracts that have been signed. They have said they have commited to a ride purchase, which is signing contracts. They then list the commitments.
A quick Google search confirms that. It isn't money spent. It is what you agree to handover, the total. Based on contacts you have signed..
3 million for just ride hardware, is reasonable for a park like Drayton. That cost will double when you factor in theming, construction and ground works, infrastructure etc.
You are talking there as if a commitment is money spent, it is not. The way we have ALWAYS dealt with commitments here and on our reports, is money that will be paid at some point, based on contracts that have been signed. They have said they have commited to a ride purchase, which is signing contracts. They then list the commitments.
A quick Google search confirms that. It isn't money spent. It is what you agree to handover, the total. Based on contacts you have signed..
3 million for just ride hardware, is reasonable for a park like Drayton. That cost will double when you factor in theming, construction and ground works, infrastructure etc.
You don’t have to put money that hasn’t actually left your account / changed hands / moved / basically done anything than stay with the company in to your accounts within that specific financial reporting period. Commitments, agreements or otherwise. If Drayton haven’t actually spent it, it’s not going to be in their financial reporting. They might have committed to a £50M RMC and signed contracts and exclusivity / confidentiality agreements, but if they haven’t actually transferred or paid any money for it, it won’t be in their published accounts. It will show in the set of accounts published for the year that they do.
DistortAMG
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OK.. that does make sense to he honest. But, their financial statement shows lease payments that are due in for the next 1 to 5 and then over 5 years. It also lists creditiors and amounts that are due a year after Sept 2022. So in the case for Draytons report atleast, they are publishing their accounts, showing money that hasn't left there account yet.
There is noway they paid £79,414,619 in the financial year the report is for in lease payments. Yet it is listed in there. Likewise, they did not pay £80,172,787 the year before for the same, but again listed.
To me, this further supports the commitment is listed.
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It’s complex. Money falling due within a defined reporting period does need to be declared as it will need to part of the financial year end audit This is a (subtle) difference to planned spend not currently falling due within a defined reporting period and therefore not needing to be audited / reported on in an audited and published set of financial reports covering a specific period. As an example in an acquisition, you might have signed agreements. There might be a payment for that acquisition that falls due or is committed as due within a defined financial reporting period, so needs to be declared within that set or accounts. But the way the acquisition has been structured might mean staged payments over a period of years based on a number of agreed metrics. Some of those might need to be declared, some might not. In Drayton’s case, without knowing the details or working for them, they might have staged their purchases or development plans in such a way that some need to be declared within the financial year in question, others don’t. So the true cost of whatever this 2024 project is, cannot be correctly surmised by whatever is currently showing in the 2022 financial reports
At least, that’s my understanding and I’m happy to be very wrong! I’m just looking forward to whatever they’ve got planned for us!
jon81uk
TS Member
I think we are saying they same thing, they have committed to paying out £3m for ride hardware, that doesn't mean the entire budget for the ride/area is that, just those are the only costs they have committed to paying out. There might be more committed in this years reporting. Or they might just have a big invoice in 2024/25 without commitments for some of the costs.
DistortAMG
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Yeah me too! Well I hope you are right. As I thought the figure was quite low.
But as I said before, it is worth remembering that a good few million at a minimum is usually needed for foundations, infrastructure, theming and all that stuff. So a coaster with a hardware budget of around 3 million would actually cost 5 to 6 million, which is always the cost you get when they market coasters. Theme parks never show off how much their new ride cost by just telling you the hardware cost. It is everything factored in. Which makes sense, as a coaster without electric, foundations and whatnot, is not really going to work.
5 to 6 million would be a sizable spend for Drayton. But hopefully it is something a bit bigger.
Bert2theSpark
TS Member
Rollercoasters aren't always paid upfront when it opens, coaster manufacturers like Mack can receive payments for the ride in installments but can also control the PLC to stop working if a park falls behind payments after opening.
DistortAMG
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Oh absoloutly. The confusion was in what the wording commited meant. We me saying it usually means they have agreed a final price for the ride and signed contracts. Sort of how you would say to car dealership that you want that car and agree a price.
How it is paid for comes after. Those details are not usually part of a commitment to purchase. Once you've said you want it, agree a price and sign contracts, aka the committal. You then work out if you are going to pay for it in full or installments.
Time will tell, but more than happy to be proven wrong on this one.
I never knew about Mack being able to stop the ride from working. That's pretty cool....but can you not just unplug the ride from the Internet? Assuming that's how the PLCs communicate. Could be another method cellular or something. Pretty sure there would be ways to stop rogue customers from doing that.
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What are you talking about?
You’re suggesting Mack will remotely access a PLC and stop it from working if a customer has not paid?
Not sure how old you are but, you’re wrong
They are going for the Poultons model which is far more sustainable. It will also be family thrill which is a pretty broad category. Drayton has never been able to compete with towers for high end thrill coasters and it shouldn't do either.
DistortAMG
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What are you talking about?
You’re suggesting Mack will remotely access a PLC and stop it from working if a customer has not paid?
Not sure how old you are but, you’re wrong
Without risking going too off topic. Being able to remotely access and control a PLC is quite an established technology at this point. Its been a capability of PLCs for a long time. So it is not totally out of possibility they could disable it through the same channel they remotely push updates though, should they chose to. If a customer has not paid. The ride belongs to Mack. So they could do whatever they wanted with it.
Connor98
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I agree that draytons thrill days seem long gone but I do disagree with the idea of them being able to compete with towers for thrill coasters. If you look at what’s available on today’s market for a low budget, you can get some great thrill coasters. For example lightning run at Kentucky kingdom cost $7m! Even Zadra which is a 200ft RMC reportedly only cost £11.5m. So there is the opportunity for them to still go into the thrill market but I think it’s more choice and their demographic than a cost issue.
Connor98
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I was more drawing comparisons to merlin/Towers budget, but on reflection I am using the budget for just the ride hardware and nothing else so you are right. however if you do change your mind I’ll go M&S instead of Aldi for you!