Interview with David Hudd

FALKLAND ISLANDS HOLDINGS IS BUYING I NTO THE FERRY BUSINESS

A Report for BBC World Service “Calling the Falklands” by Graham Bound (GB) 05/28/04

You may have heard on FIBS that Falkland Islands Holdings, the company, which owns the West Store and the Upland Goose Hotel, among other businesses, has branched out, acquiring a major stake in a British Ferry Company.  It seems a surprising move but as Executive Chairman, David Hudd (DH) told me, investing three quarters of a million pounds in the Portsmouth Harbour Ferry Company makes sense.

DH:  The Ferry business is one strand of what we are doing.  Obviously, as people in the Islands know, we have almost completed our magnetic survey looking for Gold and other valuable minerals in the Islands and hopefully, later this year we will embark on a major seismic survey of the offshore acreage that we’ve got.  So, that’s Gold and Oil, which, I might say, is rather different than operating the West Store.  At the same time, we are looking to other opportunities and the Ferry Company was an interesting situation.  And, it will allow a larger share holding, so that’s a start.  We will see what happens.

GB:  It’s a major departure, though, because at least the other research into the minerals and so on in the Falklands is Falklands based.  This is not Falklands based – no connection at all – and not much experience, perhaps, for the Company in the ferry business.  What can you take to it and what can you get out of it?

DH:  This is 800 yards, this ferry operator but basically the concept of providing service to a local community is something we have been doing in the Falklands for 150 years.  This particular company in Portsmouth has been doing it for 120 years, so there is nice synergy there and it was a good opportunity.  We had been looking at this particular company for some time and we believe we may be able to contribute but we haven’t got anybody on the board.   We’ve invested three quarters of a million pounds, which is a lot of money.  The company is currently capitalised at something like £15Million, so it’s not really a huge investment in terms of the company as a whole.

GB:  Does this indicate that Falkland Islands Holdings are actually going to move further away from the Falklands?

DH:  No.  We are still very much committed.  Indeed, the money we’ve invested in the minerals survey and our proposing to invest in the oil survey indicates.  But from a shareholder’s point of view, I think it’s good we have a rather larger spread of interest because the Falklands – 2500 people, 8,000 miles away – most of our shareholders are in the UK.  So, I think we are keen to see if we can add some businesses, which will add value for shareholders.

GB:  Your interests are nothing, if not varied.  Going back to the minerals and the possibility of Gold in the Falklands, how is that research going?  What’s the prognosis there?

DH:  The aero-magnetic survey isn’t yet finished.  Work is going on to see if we can identify some targets – some geological anomalies, which may be worthy of further investigation.  At the moment, the analysis hasn’t been finished and it won’t be for a couple of months.  One is obviously hopeful, having spent a million dollars on doing this work that it will produce some interesting results.  Maybe we’ll find something.

GB:  Like all businesses, it seems to be an opportunity comes along and another one seems to slip into the distance.  I am thinking of the Upland Goose Hotel in Stanley.  You seem to have back-peddled a bit on commitment to tourism, perhaps?

DH:  It hasn’t really ever been a huge tourist hotel.  It’s one of our important assets in the centre of the town, which everyone knows and thinks of as owned by us but we are not really hoteliers and I think we really need to improve its performance both financially and operationally by looking at various ways of doing that.  I hope we are going to be able to do something about that in the next couple of months.

GB:  It’s an important aspect of the Falklands Tourism infrastructure.  Can you just be a bit more specific about the plans for the next tourist season?

DH:  We are shutting it for a couple of months to give it a good facelift and so on internally, clean it up and got some so on.  And, we have got some plans to mount some new management changes, which we hope to be able to announce shortly.  I think it would be premature to say anything other than the fact that we do need to improve its performance.  We are not satisfied with that at the moment.  I stay there whenever I go down.  We are going to make some attempts to improve what we offer there.  We have been successful in some respects but not financially recently so we need to think through and get our act together.

GB:  So the interest in other kinds of business in other parts of the world, Falkland Islands Holdings, doesn’t mean you are going to be leaving in the short-term anyway?

DH:  Oh, no.  We are very proud of our association, our Royal Charter and the whole board is committed to a substantial presence in the Falklands.

(100X Transcription Service)