The Board, together with the Finance Committee and Senior Management team have been actively monitoring the financial position of the club. Significant operational changes including the standing down of employees and placing them on Job Keeper had been necessary due the ongoing restrictions on food, beverage, and gaming services. Although extremely difficult, these decisive measures had been taken to ensure the immediate ongoing financial viability of the club.
Further changes are required as the club continues to be significantly impacted through the loss of revenue compared to the previous year.
A summary of our lost revenue due to Covid-19 to date:
- Total Lost Revenue $2,558,241
- Bar Sales down $372,171 (14.5%)
- Bistro Sales down $478,962 (18.7%)
- Gaming Sales down $1,694,457 (66.2%)
- Golf Income down $12,651 (0.5%)
The Board through the guidance of the Finance Committee and Senior Management have adopted three key initiatives to address the immediate ongoing financial strain placed on the club due to this loss in revenue:
- Identify immediate actionable savings - $125,000 reduction in administration and clubhouse costs and $40,000 in course and golf operations costs. These savings will not significantly impact the look or feel of our course.
- Introduction of key initiatives to reduce and control the largest cost centre to the club – wages.
- Develop key strategies to drive revenue as restrictions are eased including strong member engagement and a support local campaign.
The club will also undertake a full budget reset and review taking in to account the first 3 months actual trading and the ongoing restrictions of our clubhouse operations over the remaining financial year. The updated budget position will be used to monitor the club’s ability to meet the 3 key initiatives presented and ensure the ongoing financial viability of our club
Clubhouse Redevelopment:
The club committed to the members a significant redevelopment of the clubhouse and the overall improvements of its amenities, and this was to be delivered to the members while not exceeding the approved borrowings of $2.5 million. The Finance Committee can report the completion of the project, while impacted by number of unforeseen cost overruns due to structural issues with the current clubhouse and the need for upgrades to the entire clubhouse to meet building code requirements.
The final completed cost of the project came in at $2,965,144, an overrun of $465,144 compared to the original estimate of $2,500,000 against the revised cost of $2,687,148 amounting to a variance of $277,996.
During the project there were 44 variations (excluding gaming room carpet) totalling $207,766 claimed by BDH Constructions.
- Costs associated with issues to existing building $72,150
- Hearing Augmentation System (new code requirement) $27,763
- New Fire Detection System (new code requirement) $18,293
- Various variations associated with the build $89,560
Total variations from other contractors (clubhouse fit outs) $257,378
All unforeseen cost overruns and variations have been paid from the club’s cash reserves.
Our current cash holdings as of 30 September 2020 – $789,000
The club is financially sound and meeting all its financial commitments.
On a brighter side, our membership numbers have grown 6% this quarter and we welcome them all to our club. Notable increases have been in new ladies, junior and lifestyle memberships to the club.
Peter Solohub
Honorary Treasurer
