Riviera wraps up 2016 in a strong position

Rodney Longhurst, a keen boater and businessman, purchased Riviera from the receivers in 2012. Every year since, we’ve sat down with the ambitious owner, returning CEO and friend Wes Moxey, and long-time and loyal Brand Manager Stephen Milne, to chew the fat and reflect on the passing of another year at Australia’s biggest luxury-boat builder.

This year was different, as there’s a lot more going down. There’s fresh investment in equipment — the automated timber spray booth that used to run around-the-clock pre-GFC is coming back on line; there are new high-capacity fibreglass spray guns; a whole new class of Sports Motor Yacht in build (opening photo of Rodney Longhurst alongside the new 68 Sports Motor Yacht hull); new staff, fresh vision and, well, vindication that this purchase of Australia's big boating brand was well-timed by Longhurst.

Riviera has certainly regained its mojo in the last four years and, judging by the success in 2016, it's back to the glory days. The company is outperforming the market, engine suppliers tell us, building sharp boats that can cut it anywhere in the world. Today's Rivieras are technologically advanced craft that embrace the latest power plants, drives, electronic systems and stem-to-stern connectivity.

Here’s the latest from 2016, a year in which Riviera also outperformed its own expectations. The team had projected mid-70 boat builds and sales in 2016 when we last wrapped up the year. But this year has seen that figure climb to 92 boats. Now there are forecasts for more than 100 Rivieras to be built in 2017 and they are of significantly higher value, sophistication and quality than ever before. The yard has climbed a mountain in the last four years and it's now back on a high.

1. How would you sum-up 2016?
Rodney Longhurst: It’s been great a year because we've seen the realisation of what we wanted to achieve from day one. It’s taken a while to get there but the market has warmed to everything we’re doing. The forward orders say we’re doing okay.

Wes Moxey: Forward orders are the gauge of confidence and we have a lot of that. Our forward order book is almost five times stronger than what it was four years ago.

RL: There wasn’t a target for us to hit, we don’t operate like that, but the growth has happened due to the refinement and trust in our boats, brand and business.

2. What have been the key markets?
WM: The domestic market is our backyard. Australian and NZ is first and foremost. The US is number two. Number three is Europe and we’re seeing that come back slowly but surely.

3. Where do exports figure in your total sales?
Stephen Milne: Exports are consistently 55 per cent of our business. Fort Lauderdale Boat Show was the biggest we’ve had in nine years. Cannes Boat Show was strong and positive. You have to maintain your presence because people are thinking about a purchase… in the next 12 days… to 12 years. As we build the company there will be more focus on those overseas markets. Building resilience in the business means not being reliant on one particular market.

RL: But if there’s any one market we favour it’s Australia. We’re giving Australia favouritism.

4. How many boats have you built this year?
RL: We’ve gone from high-70s, as we forecast we'd each, to 92 this calendar year. Next year will be over 100. Every boat is very highly quality controlled and of the highest order. But we’re always looking to be better. That's what drives us.

5. How does that compare year on year?
WM: In this last four years we’ve doubled the business. We’re coming off a very low base. We’ve been able to resurrect Riviera and reward Rodney in his belief. Product, people, training, processes, the distribution network, there’s been a huge investment. But we’ve taken the view that customer care is the most important thing.

6. What is the forecast for 2017 sales?
RL: There will be more than 100 boats going out the door. These aren’t stock boats, we have a very small number of new model releases that go to boat shows, however, the boats we build are all sold.

7. What have been the new releases?
SM: The 5400 Sport Yacht, the 4800 Sport Yacht and 575 SUV were released in 2016. The sport yachts have been a runaway success. The 5400 SY had its world premiere in Miami and backed up at Sydney boat show. We’ve just joined hull number 20 after the first boat launch in February. We’ve just shown you hull 10 of 48 and it launched at Sydney boat show in August. The 575 SUV is a niche boat, but it’s an easy boat for us to produce because it’s sharing componentry with the 57 Enclosed Flybridge.

8. What has been the best seller?
WM: The 5400 Sport Yacht followed by the 4800 Sport Yacht. But the 52 Enclosed Flybridge and 525 SUV has been steady as she goes. And the 6000 Sport Yacht continues to perform well. The 6000SY has been a boat a month for 30 months, that’s solid. We’re on an 18-day build cycle for that boat, which gives us 12 boats (6000s) a year.

9. What percentage of your boats are Volvo Penta pod driven?
WM: Ninety per cent. We’ve done some 45 flybridge boats with Cat power, we’ve got 77s with MANS, and the new 68 and 72 Sports Motor Yacht boats in build come with MAN or Cat. The 575 SUV can be shaft drive. The dealers and market told us we must have shaft drive but we’ve sold 10 pods to one shaft on this boat. We did this to test the market and the market has spoken.

10. How have you improved the way you build boats in 2016?
RL: It’s constant refinement in all areas, the factory’s now capable of doing so much more, the factory is really able to perform better and smarter. The improvements have come through the people and they’re thinking and not just following.

11. Are you getting less warranty claims?
WM: Rodney said I want to own a warranty-free company. We don’t want to settle for warranty and complacency. We are an unashamedly a technology company. We work with Volvo Penta and they have a commitment. And they listen to us and we’re now offering five-year warranty with Volvo Penta.

11. What are some of the new key engineering and electrical features that weren't there five years ago?
WM: The integration with Volvo and their partner Garmin is superb. Riviera Electronics is back in house and we’re doing that for connectivity. We’ve been fitting CZone [digital control and switching] for a few years. We’re now at the point of having robustness and connectivity and servicing there. We’re seeing the centre console market in America add CZone, so that’s a tick. We went out on a limb originally but it’s now the norm. We think people want more connectivity.

12. Name the hot option in 2016?
WM: It’s more the connectivity and the ability to control the boat from the iPad. Owner Jason Squire drives his boat from his iPad. He had a fuel problem at sea, he contacted the Volvo Penta factory on his iPad, they told him what to do, he changed some things in the engine room, he was fine and it was fixed at the next port of call. People want that connectivity and interface. Watch this space for more Riviera products in this area.

13. What was the most loaded boat or show stopper you built this year?
SM: Jason Squire’s 6000 was the most advanced boat we’ve built in terms of connectivity. The CZone system was fully integrated with iPad and he can steer the boat from his watch and steer the boat from the forward deck by Bluetooth and Wi-Fi. When he’s on or off the boat he can see what it’s doing. He’s a yachtie that has moved into the luxury world of power boating.

WM: We are looking at the future and cloud-based systems for our boats, too.

14. What was the biggest or most expensive Riviera?
WM: We sold 77 #5 to Oman, to a Toyota dealer who owned a 45-foot Cabo. He went to Miami boat show with a captain and his wife. They had been looking for a boat for three years. He liked fishing, she wanted a motoryacht, then she saw what was inside and immediately said her husband could buy it. It was a heavily specced 77 with crew quarters, day head, 1900hp MAN V12s, about $5.5m.

15. What was the smallest and least expensive boat you built?
WM: The 3600 Sport Yacht has had a resurrection. We had one at FLIBS, it was quite a popular boat, That’s our entry level. It’s by no means dead and will continue into 2017. We just sold three.

16. Is there a trend to sports yachts and SUVs over Flybridge models?
SM: Yes, there is, there are strong sales in our Sports Yacht but there are good sales across virtually everything, In 2000, Riviera was really regarded as a flybridge brand and that was its heritage, But now the market is much broader. Sports Yachts are a result of they way people go boating and run around their local waterways.

17. You build collaborative boats with owners. Is semi-custom a bigger thing today?
SM: We get all the input before we build the boats, so that owners have the ability to customise up front. They are then happy with our tick-the-box options. You have to think about resale. The changes are mostly soft furnishings. But our boats have flexibility. Our new Sports Motor Yachts have three or four cabins and can be personalised to a high degree. We’ve built that scope into the boats during the focus group sessions.

18. Do you have a smaller boat on the drawing board?
SM: The success of the 4800 SY and 5400 SY have been a result of watching the market. We’re still working in that under 40ft to 80ft range. We can’t say any more than that.

19. What will be the entry-level Riviera in five years?
RL: We’ve seen the big outboard boats, we’ve seen the big centre consoles in America, but that’s not what we do. There are specialists in that zone. We’ve got to be very careful to stay in what we specialise in and just keep doing that the best way we can.

20. Is outboard power a fit in a future Riviera?
RL: We’ve seen so many brands go outside their skill set and then that doesn’t always work. A stuff up there can tarnish their whole brand. So we’ll keep doing what we do and keep improving.

21. What are the biggest impediments to growth for Riviera today?
SM: Boat building is a long-term business. You can’t just say let’s make a 45 footer tomorrow. It takes a lot of thinking, going back to dealers and owner groups, lots of refinement, before we even get to build it. So you could say time is the greatest impediment. It takes time to develop good quality boats, time to train people, and time to grow the infrastructure.

RL: You can’t hurry the boatbuilding process if you want to do it well. We’ve got 53 apprentices and there’s a huge commitment to training them, too.

22. What is the most unique place that a Riviera ventured this year?
SM: Rivieras are in every corner of the globe from the Seychelles to Oman to Roche Harbor to Tasmania... wherever there are magnificent waterways you’ll find a Riviera. In 2016, I personally delivered a boat from Italy to France, I took a Belize up the Intercoastal waterway in Florida, and went to Roche Harbour in the San Juan Islands just below Vancouver. Oh, and the Bahamas for the 5400 SY launch.

23. What is one of your fondest memories of the year with Riviera?
RL: When I drove the new 5400 Sports Yacht from the Gold Coast to Sydney with my son Samuel who is seven years old. We flew back home and then to Sydney boat show later and he sees this great company function, all these owners and this great display, and my kids are growing up and seeing all this and they’re seeing our apprentices proud as punch... and this is just a really nice feeling.

24. What was your fist-pump moment in 2016 at Riviera?
WM: In August we installed out 1000th IPS drive. What we’ve seen with Volvo Penta is them step up and back themselves and invest a lot of money in R&D. They've come out with a five-year warranty, we announced that at the Riviera Festival in May. This is further proof that they’re willing to back themselves.

RL: I also think it’s pretty fantastic that we’re doing as well as we are in an environment where some reckon we shouldn’t be. People say manufacturing is dead, but I believe there’s going to be an even brighter future for hand-built quality. There’s real cachet associated with Australian-built products.

25. What's the next big thing?
After two years from concept, the 68 Sports Motor Yacht will be launched in mid-2017. This business doesn’t sit idle. We’ve got a lot of new products coming and we will continue to optimise all elements of what we do and refine our boats. As we’re proving, the future is bright for Riviera. We’re moving in the right direction.

More about Riviera at www.riviera.com.au