Sutton Harbour Group Posts £18.7m Loss Amid Asset Impairments and Debt Struggles

Important context on covenants:

• The interest cover covenant is suspended until 30 June 2026. The company notes the interest coverage test is not expected to be achievable in the life of the current facility and discussions continue with the bank.
• The Group met all operable covenants during the year.

Net debt increased to £26.8m, raising gearing to 76.4%. Interest costs remain a burden, with net finance costs at £2.08m. The company has hired advisers to explore longer-term financing options, which feels prudent given reliance on disposals and the high interest backdrop.

Related party loan extension: extra headroom, repayments pushed out

On 25 September 2025, the company increased its unsecured related party loan facility with Beinhaker Design Services Ltd by £315,000, bringing total shareholder loan facilities to £6.605m. Interest is 8% cash or 10% if capitalised. Repayment has been pushed to three equal instalments no earlier than 31 March 2026, 31 May 2026 and 31 August 2026.

As at 31 March 2025, related party loans outstanding (including rolled-up interest) were £7.346m – £7.110m with Beinhaker Design Services Limited and £0.246m with Rotolok (Holdings) Limited. The board does not recommend a dividend.

Operations: marinas resilient, fisheries subdued, car parks robust

• Marinas: Revenues were 2% ahead year-on-year with broadly steady occupancy. Sutton Harbour Marina’s new reception and floating shower/toilet facilities were completed before the 2025/26 season. King Point Marina is for sale and a preferred bidder is in due diligence. The company noted a slight softening of demand ahead of the 2025/26 season.
• Fisheries: Activity is lower after the auction closure. Landing fees are down, though fuel sales were broadly flat. The business is currently loss-making due to a fixed cost base; discussions with the Local Authority and industry are ongoing about future options.
• Car parks: Trading remained robust, particularly in the first half, buoyed by the local attractions.
• Real estate letting: Tenant occupancy was 85% at year end (down from 89%), with North Quay House fully vacant and being repositioned for conversion to 10 apartments and 3 commercial units. Excluding that, just one larger unit remains vacant and is being marketed for sale.

Regeneration pipeline: Sugar Quay reset, North Quay plan, airport masterplan

• Sugar Quay: Moving to a lower density scheme to suit financing and market absorption. Prior consent has expired; a new pre-application is planned during 2025. The reset triggered a £9.388m impairment.
• North Quay House: Pre-application process completed for conversion into 10 apartments and 3 commercial units. Costings are being prepared ahead of marketing for sale or JV, targeting delivery during 2026.
• Former airport site: Carried at £13.741m within development inventory. The masterplan pre-application was submitted in March 2024, and engagement continues with Plymouth City Council. There is an ongoing legal dispute over alleged lease breach; further details are not disclosed, and legal costs are included in exceptionals (£0.504m total exceptionals in the year).

My take: the good, the bad, and what matters next

Positives

• Adjusted loss narrowed to £1.9m; gross profit recovered to £1.67m.
• Marinas and car parks are doing the heavy lifting operationally, and facilities upgrades should support yields and customer retention.
• NatWest flexibility buys time; covenants met during the year.
• Asset sales are happening – three in-year and two post year-end – with proceeds used to pay down debt.

Negatives

• Big non-cash impairments (£16.3m across development and fair value adjustments) hammered NAV to 24.6p.
• High gearing at 76.4% and £2.08m net finance costs keep pressure on cash flow.
• Reliance on disposals at a time of cautious buyers; management acknowledges the sales market is tougher than expected.
• Fisheries is loss-making post-auction closure; strategic solution still pending.
• Legal uncertainties around the airport lease and lock management costs remain, with limited disclosure.

What to watch from here

• Completion of the next tranche of asset disposals and progress on reducing the bank loan to £11.565m by 31 March 2026.
• Outcome and timing of the King Point Marina sale.
• New Sugar Quay pre-application and any valuation implications of a lower-density scheme.
• Airport site – developments in the legal process and any movement on the masterplan.
• Financing strategy review – potential refinancing options and any changes to covenant structure after June 2026.

Bottom line: this was a reset year. The core harbour assets are trading acceptably, but the balance sheet has taken a hit from realistic revaluations and a pragmatic Sugar Quay rethink. Debt remains the swing factor. If disposals land and financing is stabilised, the Group can refocus on delivery. Until then, expect sentiment to hinge on asset sale progress and debt milestones.