Only half of Central Coast and Hunter clubs profitable

“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, 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.

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