Half-Yearly Financial Update

On behalf of the Committee, I am pleased to present a financial update for The Brisbane Golf Club for the six-month period, 1 October 2023 to 31 March 2024.  It’s been a trying six months for the Club and its Members – a fire at the end of November, storm damage in December and high rainfall leading to frequent course closures in the March quarter. These items have buffeted the profit and loss account, but the resilience that has been built into the Club operations over the last few years has stood us in good stead, and your Club has been able to achieve a steady operating result for the six months, in line with budget and the prior year result.

Profit and Loss

A strong membership renewal underpinned the six-monthly result with membership income 2.3% higher budget and 9.2% higher than the prior period. Golf retail revenue was also over budget due to club replacements following the fire, although the overall gross margin in golf retail was down due to the club equipment replacements being at nil or low margins. Other operating departments’ revenues were affected by the matters referred to above, but still performed well after taking into account these impacts. The operation of the car parking for the tennis over the Christmas period also made a positive contribution of $54,000 for the period. Total revenue was 5.4% higher than budget and 5.6% higher than the prior period, but as noted above this is somewhat distorted by the higher golf retail sales.

Whilst operating expenses were higher than budget and the prior year this is also distorted by the higher golf retail sales at nil and low margins. If this effect was removed then total operating expenses would have been on budget, despite the costs of recovering from the storm damage in December.  Wages were slightly below budget for the 6 months – Course wages being higher than budget, whilst wages in other areas were generally slightly below budget.

In overall terms the Club achieved an EBITDA of $469,102 for the period, $55,108 higher than budget. Although this was $17,336 lower than the prior period, that included a higher level of government incentives which are now at minimal levels. Given the challenges thrown at the Club during the period I consider this a pleasing result. The management team was stretched during this six months but their dedication to the Club and going above and beyond is to be commended.

The below table summarises some of the key financial metrics for the period.

Some of the highlights for the six months are:

• New membership growth has continued the trend of the last few years, with a very strong membership renewal and the Club has also welcomed 98 new members in the last six months.
• The golf retail team worked tirelessly assisting members with golf club replacements, albeit at nil or low margin to the Club.
• Golf operations performed above expectations after allowing for the impact of days closed.
• Food and beverage was down slightly on expectations but forward bookings indicate a stronger second half result for them.
• Wages and overheads were generally well controlled.
• Management continues to work hard to supplement Member contributions with non-member income, as evidenced by the car park additional revenue.

Cashflow

The Club’s net cash position (ie less debt) declined by $659,000 during the six months, inclusive of $510,000 from the easement proceeds, and after capital expenditure of $518,000,including driving range expenditure, 1st hole drainage improvements, Northstar Club management software and equipment replacements.  The decline is expected as the second half of the year benefits from the membership renewals. By way of comparison our net cash position has improved by $276,000 from the same time last year.  Current projections to 30 September 2024 are for the Club to have cash on hand exceeding debt by approximately $200,000, although depends on timing of pro-shop rebuild expenditures net of insurance recoveries.

Summary

As noted at the outset I consider the results for the six months to be steady, which is pleasing considering the challenges experienced by the Club. The impact of those items should be less in the second half, but will not be completely gone, and the Club recognises the need to improve the condition of the course over the next 6 months, which will no doubt incur some modest additional expenditures. I expect that we can absorb those items and still achieve a result in line with budget for the full year. Your Club remains in a sound financial position.

Thank you to all Members for your ongoing support of the Club through what has been a difficult six months.

If anyone has any questions in relation to this report, please do not hesitate to contact me. My email address is a.mullis@bigpond.com or catch me when I am at the Club.

Kind regards

Andrew Mullis
Hon. Treasurer
The Brisbane Golf Club