News

Rain washed away profit

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November 01, 2017

Outgoing president Dario Prighel in his last address.

Yarrawonga Mulwala Golf Club Resort recorded a 12 months financial operating loss of $305,000 for 2016/17, after probably the wettest and most sustained adverse golf conditions ever experienced, especially on the Murray Course with spring rainfall and subsequent flooding.

The Murray Course was closed for six weeks – before and after one of the club’s four biggest income months of the year, October.
“The financial impact on the club over this extended period was enormous,” President Dario Prighel said in his report for last Thursday night’s Annual General Meeting.
“Thankfully a portion of the costs were recovered via our insurance policy. I thank the members and ground staff who put in a lot of effort in returning the Murray Course to a playable standard in a very short time.
“Although we will be reporting a loss this year, our underlying cash trading profit is still sound at $1.8 million and is on the improve.”   
Club Resort Chief Executive Officer Richard Hogg said notwithstanding the huge impact on the club’s operation, profit before depreciation (cash profit) was $1,757,565 and fortunately $480,000 was offset by insurance.
“Continuing problems with our depreciation look to be finally resolved and the board needed to tidy this up so we can start 2017/18 better placed moving forward,” Mr Hogg said.
The CEO said the club is continuously challenged by increasing competition, tightening of regulations, extreme weather conditions and economic downturn.
“It is for those reasons that we must continue to streamline our business and explore viable diversification options. Our cash profit for the year has helped us clear debt and undertake capital works including the short game area following completion of the new croquet court area, the electric sign on Gulai Road and clock on the practice putting green area.”
Mr Prighel, who became president four months into the financial year, said his presidency started with some necessary tough decisions following catering and functions’ reviews.
“Similar tough decisions have been made to cleaning of the accommodation units,” he said. “These decisions have not been taken lightly but will set up the club for the longer term.”
While this has been a relatively quiet year in terms of construction and development, Mr Hogg said the club has been active in other areas such as improving accommodation online booking systems, investigation into accessing water re-use from the adjoining Mulwala Sewerage Treatment Plant and designing Murray Course 19th holes options to accommodate essential future green rebuild works.
During the two-hour AGM, considerable time was spent on financial matters by Mr Hogg and Mr Prighel, and with many questions from club member and a former CEO Bryan Sinnott, as well as club member Greg Hope.
Mr Sinnott in particular, was concerned about the club’s financial situation with another loss recorded and saying that depreciation should not affect the bottom line of a club’s 12 month reporting situation, and queried catering figures to be in such good light.
An invitation was extended to Mr Sinnott to again meet with management over the financials.
While admitting things can be improved, Mr Hogg illustrated comparisons between the club and others along the Murray River which depicted Yarrawonga/Mulwala Golf Club Resort in promising shape. He also presented yearly financial situations since the floods of 1993 which also had a detrimental effect on finances.
“We were on budget. The floods were a in kick in the pants,” he said.
“We engaged BDO Australia Ltd to undertake a review of our strategy, an audit of our financial and operating performance overall and for each major trading area – a business health check – and how it contrasts to other clubs.
“They will deliver their report to the board in November (this month). But knowing we were having the AGM tonight, they corresponded with us earlier in the week indicating satisfaction with a lot we were doing.”
Mr Hogg outlined the club’s Capital Plan for 2017/18 which included the nearly completed $680,000 bistro refurbishment.
For members’ information, Mr Hogg said October 2017 was going particularly well. “We haven’t got enough carparks – that’s a good position to be in - accommodation is full, the courses are full, the gaming’s going sound, catering is going well and hopefully there are good times ahead.”
Unless something unforeseen happens, such as sustained adverse weather conditions, the Board of Directors is confident of a profitable 2017/18. All present at the AGM are hoping for that too.
In General Business, two questions were raised. Lorraine Christie believed the club should purchase a defibrillator. Mr Prighel said there are two - one in the Pro Shop and one at club reception, and a third, for location in the on-course drinks cart, is being donated by Mrs Pat Cook.
Club Life Member Alex MacKenzie believed “a change of culture” with women standing for the board, should occur. “Look what Peggy O’Neill (football president) did at Richmond!” ‘Macca’ said.
Mr Prighel said that four women have served on the board in his time and while women are less nominated than men for director positions, the outgoing president said he’d like to see at least two women on the board.

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