Ratepayers will not be hit in the pocket again despite
the company running Dunedin's Forsyth Barr Stadium missing its
mark by nearly $700,000.
Dunedin Venues Management Ltd on Monday revealed a $986,000
loss for the 2012-13 year, which chief executive Darren
Burden said represented progress after a $3.21 million loss
the previous year.
However, the company had been forecasting an even better
turnaround, with a $298,000 loss predicted for 2012-13 in a
statement of intent published in July last year.
In the end, the $986,000 loss was $688,000 worse than
expected, the company's annual report confirmed.
Mr Burden said the forecasts for 2012-13 were actually
completed in early 2012, about 18 months before this week's
results were released.
Because of that, they were also based on only about six
months of trading by DVML, he said.
For those reasons, there was always going to be ''a level of
uncertainty'', but the accuracy of future forecasts should
improve, he said.
However, Mr Burden said the loss could be covered internally
using income from other sources, such as ground memberships
and other private sector sponsorship arrangements.
That meant there was no need for a fresh call for more
funding from the Dunedin City Council, he said.
''That covers the overall loss.''
He also remained upbeat about the DVML's turnaround since
last year, saying the company had turned a $302,000 loss,
before rent and other payment obligations, into a profit of
However, the company was still required to pay $4 million in
rent each year to Dunedin Venues Ltd, to cover stadium debt
servicing costs, which turned the operating profit into a
loss, he said.
''That's a really, really positive thing for us . . . [but]
we recognise there's still quite a bit of work to be done.
''Things are heading in the right direction.''
Dunedin City Council financial planner Carolyn Howard
confirmed the council also expected the loss to be covered
internally by DVML.
''They've got it covered themselves. We're not going to have
to write out a cheque to balance up that $900,000 loss.''
Dunedin Mayor Dave Cull said when contacted the company's
target might have been ambitious, but he was encouraged it
was ''heading in the right direction''.
''They both increased their revenues and decreased their
costs, so in both areas where they can do anything, they've
got a good result.
''I would be hoping that their forecasting would improve
along with their results next time.''
His comments came after Dunedin City Holdings Ltd on Monday
unveiled a much improved result for the council's group of
companies, by turning a $5.1 million loss in 2011-12 into a
$20.5 million surplus for 2012-13.
DVML's result had also improved on the back of a 23% increase
in revenue, while costs were down by 10%.
The result also came after councillors in June increased
funding for DVML by agreeing to a new $400,000-a-year events
attraction fund, as well as $1.75 million a year - spread
across DVML and DVL - to accelerate stadium loan repayments.
That brought the total cost of the stadium for the council to
$9.125 million a year, also including reduced dividends and
the council's service level agreement with DVML.
However, Mr Burden said the funding increases agreed in June
were not reflected in the latest results, and would only
begin to make a difference in the 2013-14 year. DVML's latest
statement of intent predicted a loss of $98,000 in 2013-14,
followed by profits of $10,000 in 2014-15 and $88,000 in
Mr Burden said prospects for better results were looking
''reasonably good'' after a good start to the 2013-14 year.
''It would be foolhardy of me to paint the ultimate positive
picture, but what I can say is we've got some confidence now
that everything is heading in the right direction.
''The aim for us is to get to a stage where we can at least
cover the rent that we have to pay, and we're certainly
heading in that direction.''