A long standing and well intentioned member suggested that the Committee might provide a report to members of the important matters dealt with and decisions made of our Annual Planning Conference.
I intend to embrace that suggestion and what follows is a concise report of the recent conference. I will use the Club’s website to report on other important matters as they arise, rather than having to wait for the quarterly Chairman’s Message in the Club magazine.
FORMAT
The Conference was held at the Club over the full day (until 5:00pm) on Saturday 15 September 2012. Following that day, the Executive Team went to work over the following three (3) days (17 – 19 September 2012) considering and planning the decisions made and action items given by the Committee on the Saturday. The proposals of the Executive Team were then brought before the Committee for consideration and discussion on Monday 24 September 2012.
BUDGET & FORECASTS
The first part of the Saturday was spent considering and discussing the revised budgets to the end of this year and a revised forecast budget for 2013 prepared by Management. This involved detailed consideration of debt levels, cashflow, the overdraft, interest cover ratio and the performance of each department in the Club.
Particular emphasis was put upon the performances in the gaming, food and beverage areas and the performance of Boonoona Ski Lodge. These areas are dealt with further below.
GAMING MACHINE ENTITLEMENTS
The Committee received a comprehensive report from an Industry Expert comparing our Club’s poker machine performance with other clubs and venues across Sydney. The report related in particular to the number of machines in the venue and their performance profiles.
The report showed that profitability was not a reflection of the number of machines. It concluded that our Club was “over machined”. The reason for the number of machines we have is simply that our Club took as many gaming machines entitlements as it could get just prior to the NSW Government freeze in approximately 1999. There was no ‘science’ applied to the number of entitlements we should have, just a belief that ‘more is best’. The report received showed that a well run, cutting edge gaming venue with less machines is likely to do as well, if not better, than a venue with more machines and at substantially less cost both in capital expenditure and ongoing running costs.
In view of this, the decision was made to sell over the next six (6) months some of the Club’s entitlements that are in excess of its needs.
The Committee is confident that this will not adversely impact on our current and future gaming revenue and as some of the funds received are to be used to update the current fleet of machines and systems, it should in fact improve revenue.
RESTAURANTS & CAFE
The performance of and forecasts for the restaurants and cafe were considered and discussed at length. This was a long session with a range of options discussed in relation to how performance might be improved. Prior research was reviewed.
The conclusion was that the current model for the restaurants and cafe, in the current economic conditions of the CBD, cannot continue unchanged. Management must come back to the Committee with possible alternatives and this will occur over the next six (6) months. I will report further to members on this topic.
BOONOONA SKI LODGE
It was noted that it was our worst year for Boonoona Ski Lodge (and a bad one for the Australian ski fields generally). The year was well down on 2011 and that year was well down on all previous years. It was clear to the Committee that we can no longer rely only on members to fill our Lodge. The issue was left with Management to take necessary steps to maximise Lodge placements, whether by members or by non-members with a view to keeping the Lodge a viable asset for the Club.
Management has come back with proposals and I will report on what has been done later.
GOVERNANCE IMPROVEMENTS
The Committee continued its strong focus on governance issues.
Consultgroup has been working assisting the Committee with the identification of key performance indicators (KPI’s) for the Chief Executive Officer and other senior executives and the processes for measuring performance against those KPI’s. In the course of doing this work, Consultgroup has identified other areas of governance for the Committee’s consideration.
At the conference, the Committee considered a submission by Consultgroup in relation to the preparation of a comprehensive manual of governance policies to guide the Committee into the future. The manual is to properly document existing verbal policies as well as provide additional protocols and policies for areas not adequately addressed in the current governance framework.
After due consideration and discussion, the Committee accepted the proposal and appointed Consultgroup to complete the work recommended in the submission. These governance improvements will progress through the rest of this year and into 2013. (Refer to point 4 in Letter to Members sent on 13 August 2012).
DISCUSSIONS WITH COLLIERS
The previous Chairman’s Message informing members that the Committee has had experts from Colliers advising about the feasibility of developing the airspace above the Club.
At the conference, the Committee received a further progress report from Colliers regarding the further investigations undertaken. So far, the investigation findings have all been positive, but it is still early days.
The Committee decided to have Colliers continue their investigations including a more detailed enquiry of the Sydney City Council. These further investigations remain preliminary and without cost to the Club.
As previously advised, no decision will be made concerning any development without the approval of members. In this regard the Committee will be proposing to call a briefing meeting of members at the appropriate stage to fully appraise you of where and how things have progressed and invite comment and feedback.
I will have more detail in my message in the November Magazine Edition.
CONCLUSION
I will also continue to build upon the above issues and other important matters in future messages in the Club Magazine and by way of further website publications.
Patrick Campion
Chairman
City Tattersalls Club
