All Leisure group (ALG), the listed British operator of niche cruise vessels, says it is planning to sell the 50 passenger Hebridean Princess to a company set up by its chairman, Roger Allard, for £2.9 million, and to lease the ship back.

The lease would run to 2023 and the annual payment ALG would make to have control of the vessel would be £500,000 per annum.

“As set out in the Company’s interim results for the six months ended 30 April 2015 which were announced on 30 July 2015, trading conditions for the Group have been under pressure in recent years,” the company said in a statement.

“The cruise industry is becomingly increasingly competitive as new vessels are launched and the capacity within the industry grows. Consequently the industry is seeing increased levels of price competition, which negatively affects the profitability of the Group.”

 Geo-political events continue to have an adverse impact on the business, affecting the appetite of tourists to travel to a number of destinations and limiting the Group’s ability to visit certain destinations.

“Furthermore, it was necessary in the first half of the year to put all three of the Group's cruise vessels into dry dock, with a resulting annual capital expenditure cost of approximately £4.3 million and a loss of revenue relating to the lost cruising time of approximately £2.5 million. The Group’s cash flows are highly seasonal, with cash at its lowest point in December to February, and at its highest in the period June to July,” the company said.

All Leisure operates the 1964 built Hebridean Princess that was rebuilt as a luxury cruise ship in 1989, the 1990 built Voyager that started life as Crown Monarch and the 1996 built Minerva.