After almost six months in the role as your new Treasurer I thought it timely to reflect on all that I have learned since December and share some details about where we are with the club’s finances.
First of all though, I would like to thank Mark Read for his time, guidance and knowledge as he’s handed over the reins. Without his assistance I would still be struggling to grasp the full details of the role. I would also like to note that Mark leaves a significant legacy, was a great custodian of the club’s finances and I will endeavour to follow suit. I would also like to thank Liz Lowndes, our bookkeeper, for her support, patience and continuing work keeping control of our finance transactions and accounts.
More generally, I would like to thank all our members who donate or sponsor the club in whatever way they can, whether for a particular team, age group or bar tab – it all contributes to the positive finances and participation of the club.
As highlighted in last published accounts, there is outstanding debt of circa £330k on the clubhouse and new floodlights and this requires annual repayments in the region of £57k per annum. In prior years this debt has seen certain Loan Note holders waive/defer payments/interest to aid cash flow which whilst commendable and welcomed we cannot rely on this for cash planning and are working to an assumption that the debt repayments will be serviced as originally planned and to do so we must ensure sustainable revenues are generated to achieve this.
Our Chairman has already communicated to you that a £40k+ deficit has been identified in this year’s opening operating budget, plus additional £18k capital items, totalling £60,545. As a new Board we have been trying to reduce this figure, whilst also investing in the facilities (through donations of capital) to drive additional revenue streams. Our analysis suggests urgent attention is needed in two areas to get our finances on a sounder footing. These two areas are the Commercial area in regards to Sponsorship and in the Events area in regards to third party lettings where we have not had the performance forecast and expected. This is the Board’s most pressing priority and our thoughts and plans will be communicated to you in due course and your input as members is as always welcomed. Rugby will always come first at Broadwater Pavilion, but we are confident we can better utilise the clubhouse through non-rugby events – that in turn can create additional funds to support rugby, coaching, development and enjoyment for all our members.
We have not altered the original 2017/18 Budget figures (apart from in the below statement to highlight the £41,982 operating deficit plus the additional capital items) but we have updated the full year Forecast in light of our year-to-date performance. We do recognise that the current format with nine operating entities is complex to interpret and this is also under review.
In this regard, as of end of March, we are now forecasting to end the budget year with a £34,271 deficit – after Capex projects and loan repayments. So whilst we have managed to improve on the original budget in a short space of time, we are still predicting we will end the year in negative figures – which as mentioned causes a concern regarding cash flow. To address this 2018/19 budgets are proactively being worked on to map out revenue and cost forecasts and enable positive cash flow forecasts to ensure our viability as a going concern. With Loan Note repayments due in December we will report further as the picture regarding our finances firms up and outline what actions are being implemented.
Please see the following financial statement for more details on the various areas, but some headlines covering the finances to March 2018:
• Senior and Minis age groups are tracking better than expected with stronger membership income and slightly lower costs. There has been a great effort through all age groups to bring in the subs this year and we’re aiming to improve on this further for next season with a simpler membership and payment platform.
• Facilities, Management & Admin is tracking better than expected, this includes the facilities cross charges to the age groups that is benefiting from higher membership incomes. Costs are higher than budgeted due to the recent refurbishments – but these are all covered by Chairman’s donations (which are posted within the revenue figure). We have also re-evaluated our VAT treatments against the different levels (standard, reduced rate, zero and exempt) and made an improvement of £19k in terms of non-claimable VAT.
• Shop revenue has been down, but Roy and his team have been working hard to turn this around and the new shop has had a great impact with one weekend bringing in over £500 – so we expect the figures will recover slightly by year-end. With Raging Bull now on-board as new kit and leisurewear supplier, along with additional equipment and clothing providers in progress, we are confident this will be a significant revenue growth area for next season.
• Commercial revenue is significantly behind target (this includes donations, sponsorship, commercial events and International tickets), but fortunately the well supported City Lunches and the new Casino night have raised additional funds, plus the costs have also been carefully managed.
• External Events is also significantly down and needs to dramatically improve before year-end. Our Operations Team are now implementing a new marketing campaign; including a dedicated events website and new signage on the club entrance – and we encourage all Members to use and enjoy the newly refurbished facilities.