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Media Release ~ 23th November 2009
Just over half of the Hunter and Central Coast Clubs are profitable!
Newcastle business services firm, Forsythes, has released results from their inaugural 2008/2009 Hunter & Central Coast Clubs Index reflecting a difficult operating environment for clubs in the region, with just over half of all clubs profitable. The Index shows that only 55% of Clubs in the Hunter and Central Coast region made money, which was down from 60% from the previous year.
“The results of the Index prove that many Clubs are facing an uphill battle to survive with the deterioration in financial performance leading to increasing mergers and closures,” said Forsythes Assurance & Risk Partner, Mr Martin Matthews.
“Interestingly, club revenues rose an average of 7% across the Hunter and Central Coast Clubs region in 2008/09. This however has not translated to the bottom line with greater expenditure in the areas of member promotions, advertising, marketing and higher poker machine payouts eroding these increased revenues. It is clear that Clubs are fighting hard to capture market share and this has had an adverse effect on profitability,” Mr Matthews said.
The Index shows Clubs over the past twelve months have met many challenges including increases in poker machine duties and alcohol excise, as well as the broader effects of the global financial crisis and its impact on unemployment and consumer confidence.
Mr Matthews went further to say “Clubs are certainly not the gold mines they used to be and many Clubs are finding it difficult to generate cash from their operations. This shortfall in cash from operations is not easily replaced by debt due to the credit crunch. The tighter lending restrictions have also made it difficult for clubs to undertake significant capital expenditure that would attract more members and patrons. Despite this, I think it is fair to say the results would have been far worse for the local Clubs industry if it wasn’t for the relative strength of the Hunter economy and the effect of the Federal Government stimulus packages”.
The Forsythes 2008/2009 Hunter & Central Coast Clubs Index sets out to benchmark the financial performance and position of the local Clubs industry based on audited financial information.
Forsythes is a local firm with an established record of over 50 years of service to clients throughout Australia. The firm has over 100 staff and is a significant corporate identity within the Hunter region and beyond. It boasts a progressive and supportive internal environment and a customer-focused business culture providing services in Accounting, Assurance & Risk, Corporate Advisory, Financial Planning, Forensic Accounting, Recruitment, IT and Training.
For further information about please contact Forsythes Assurance & Risk Partner, Mr Martin Matthews on 02 4926 2699.
RELEASE ENDS
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