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6. Bull, Bear & Beyond – The London Tunnels: executive interview
8 Plays1 year ago
The London Tunnels owns the Kingsway Exchange Tunnels in Central London and is aiming to develop a major heritage and cultural attraction, targeting full commercial launch in 2027. The company is listed on the Euronext Amsterdam.
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About ‘Bull, Bear & Beyond’
Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.
About Edison:
Edison is a content-led IR business. We believe quality investment content should inform all investors, not just brokers. Our mission: engage and build bigger, better-informed investor audiences for our clients.
Edison covers 50+ investment trusts, read about them here: https://www.edisongroup.com/equities/investment-companies/
Original interview published on 30/09/2024 and reposted as a podcast
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Transcript
Introduction to Guests
00:00:07
Speaker
Hi, I'm Milo Bussell, a consumer analyst here at Edison Group, and today I'm joined by Charles Nelson, a non-executive director at London Tunnels PLC.
Kingsway Exchange Tunnels as Tourist Attraction
00:00:15
Speaker
London Tunnels owns the Kingsway Exchange Tunnels and has exciting plans to turn them into a major tourist attraction in central London.
00:00:23
Speaker
The company listed on Euronext Amsterdam in June 2024 and has a market capitalisation of around £150 million. pounds Charles, thank you very much for joining me today.
00:00:33
Speaker
Thanks very much, Milo. Lovely to
Historical Significance and Visitor Goals
00:00:35
Speaker
be here. So Charles, for those that may not be familiar with the London Tunnels, could you start by introducing the project please? Yes, I'll obviously introduce the the company and the project and the history of it because it's a fascinating venture that we're we're we're kind of going down that path on. um It is likely to be the last major scale tourist attraction for history and heritage in London. And what I mean by large scale is up to three million visitors a year. yeah The same kind of scale as say Madame Tussauds or the London Eye.
00:01:08
Speaker
um We are planning to renovate these tunnels to bring them back to a safe state where Londoners and millions the millions of visitors who visit London every year can come and have a look at their their role in the war and also the uses that the tunnels had post-war as well and we're extremely excited about being able to have be in this position to develop that.
00:01:31
Speaker
um But before I go into the tunnel's history, what I would like to say is that um we we're encouraging people to come and see for themselves. We are running tours. There's very limited availability. What we would encourage people to do, particularly if they're investors and you can buy shares, as Milo said, it's listed on the Euronext and Amsterdam, but you can buy shares via broker platforms like AJ Bell. and we will prioritise shareholders but late October we're running some tours down to the tunnels and we would encourage everyone to get onto our website thelondontunnels.com and apply to come down and come and see for yourself. It's an incredibly exciting opportunity.
00:02:14
Speaker
And would be great if you could tell the audience more about the history of the
WWII and Post-War Use of Tunnels
00:02:17
Speaker
tunnels. Absolutely. So to give you a feel for the location, they are literally around the corner from here. They run underneath Hoburn, in fact underneath the central line, two tunnels running parallel east to west. They were built in the war to house Londoners for the Blitz and in fact there were a series of tunnels which were built around London for that purpose. Interestingly, these ones were never used because they were started in 1940 and finished in 1942 and by that time the Blitzer kind of dissipated.
00:02:53
Speaker
Although I'm sure you're aware there was a lot of people who died from bombings from from from Nazi Germany over that period, something like 43,000. So they were seen as a very important um construction project for protecting Londoners. In total the tunnel network is around a ah a mile long, that's the whole network of tunnels, but actually the two main tunnels run perpendicular to each other east-west, they're approximately the same size as a tube tunnel, each one about 400 metres long with interconnecting tunnels. And then there are four larger diameter but shorter perpendicular tunnels running off one of the tunnels.
00:03:30
Speaker
In fact, to give you a feel for scale, you can run three double double double-decker buses side by side down down the the bigger tunnels. So it's an ah absolutely enormous scale project. And when they were built in the war, they were due to house up to 10,000 people at any one time on each tunnel having an intermediate level, which is no longer there, but an intermediate level to house Londoners.
00:03:55
Speaker
um They were built as I mentioned in between 1940 and 1942. They were never used because of the dissipation of of the the bombing by by Nazi Germany but were kind of seen as important storage facilities for various other things. So ah after the blitzer dissipated there were many other kind of government departments which used used them. There were reserve war room as an example. Towards the end of the war they were passed on to SOE, Special Operations Executive, part of MI6, everyone's familiar with that. And at the time we believe that Ian Fleming was a naval liaison officer to SOE and would have seen these tunnels in use by SOE. And they were specifically used for research and development. So in fact they were Q-Branch and became Q-Branch. So in the James Bond novels that's exactly what what you see.
Telecommunications History
00:04:50
Speaker
After the war they were used for various purposes, in particular the Public Records Office had a ah lot of storage down there. They they put in 80,000 feet of shelving, 500 tons of documents which went all the way back to the doomsday period which had been brought back from the provinces which ah during the war, after the war, because during the war they were obviously in danger of being being destroyed by by the bombing raids. And then more interestingly they got passed on to the GPO.
00:05:23
Speaker
And the GPO in those days was split between the mail part of it and also telecommunications exchanges. And they set up an exchange there and in the 50s built the four large perpendicular tunnels that I mentioned, which housed generating equipment exchange equipment switches, e etc.
Blending History with Culture
00:05:40
Speaker
And during the Cuban Missile Crisis in the 60s, it was the hotline between the US and the the Russian or the USSR governments, in particular, Chris Treven-Kennedy obviously talking down there. So a lot of really interesting history. um
00:05:58
Speaker
They then passed on to BT who then have sold the tunnels to us, to to the to the company. And as you've probably read, it houses the deepest bar in the city.
00:06:09
Speaker
So very interesting prospect for anyone who's visiting the tunnels as we redevelop it. But we're really motivated to bring that heritage back to life. And we think that we're not only going to get a lot of interest from Londoners to come and see their history and their parents' history or their grandparents' history around the Blitz, but also foreign tourists who come in and they want to see what happened in in in in London over the over the war period. And the other point um I would make is that it's not just going to be a history and heritage site, we're to have a cultural element to it as well. um So all in all, a very interesting prospect. And as I said before, we'd love people to come and see it for themselves. Please get onto the website and and apply for for a ticket.
00:06:58
Speaker
The tunnels clearly have a fascinating heritage and I'm sure many investors would be keen to go and
Future Plans and Updates
00:07:02
Speaker
see them. So what are the plans you have to transform the tunnels? This has been a labour of love. So um for the last four or five years we've been preparing to get to that stage where we can actually get into construction and renovation. We received full planning permission from City of London Corporation, in June this year, June 11th this year and also from Camden Council in July this year. So we're ready to go. so we've appointed some of the leading companies to help with the plans for for this tourist attraction including architects like Wilkinson Eyre who will help us develop the tunnels to their former glory and including of course the bar, and the deepest bar in London.
00:07:49
Speaker
This is not just a historical and heritage site, it's also going to be a cultural attraction. So what we're doing is we're looking at partnerships where people and tourists can come down and visit an entertainment space. So you know along some of the tunnels you're going to have the history, that incredibly rich history around the war and in other parts of the tunnels you'll be able to be immersed in contemporary entertainment so it should be an incredible experience for people and they can pick and choose about which way they want to they want to go and that's one of the the real interesting parts about this whole project is that it shouldn't just be a one-stop attraction we hope that people will come back time and time again to visit different types of entertainment as well as the history of of the tunnels as well
00:08:38
Speaker
So you've signposted 2027 as the year for commercial launch. So what are the sort of expectations you have around visitor numbers, revenue and profitability by then? Yeah, so our our view, of our plan is that the project will open up for commercial operations in late 2027, maybe early To give you a feel for visitor numbers, profitability, scale etc.
00:09:10
Speaker
As I mentioned before, it's it's all similar it should be of similar size we think to London Eye or Madame Tussauds. We think up to our plan is up to 3 million visitors a year.
00:09:22
Speaker
And when you think about ticket prices in London for these kind of attractions, they're fairly standard I would say. So when you look at the potential profitability and revenues, it's going to be of that order that you would expect to have seen you expect to see from companies like London Eye and Madame Tussauds.
00:09:42
Speaker
So having recently received planning permission approval from Camden Council, what are the other key milestones that investors should be looking for? So we've obviously been announcing a lot of different things over the last few months, including the listing, including the the full planning permissions. We've got it on the website. You can see all of the development plans there. You can also go to the the planning portals as well.
00:10:05
Speaker
I think it would be logical to assume that the next stages would be around operation when we get to that stage of starting construction, who's going to operate it, how's it going to be operated and of course we'll be making announcements to the stock exchange in due course. I'd like to reop reiterate again that these tunnels being under development are really fascinating spaces in their own right. We would encourage people to get onto the website and apply to come down and see see for themselves because we think it's a fascinating experience. Yeah, absolutely. And it sounds like a very interesting prospect for investors. Charles, thank you very much for joining today. Pleasure.
00:10:41
Speaker
Thanks, Milo.