David Davies
A forecast financial surplus of more than $3 million for
the company set up to run the Forsyth Barr Stadium has come
with extensive warnings of the risks the company faces in "an
uncertain future commercial environment".
Dunedin Venues Management Ltd (DVML) has a budgeted financial
target of a surplus of more than $3 million in each of the
2011-12 and 2012-13 financial years, after money from seating
packages and sponsorship has been raised, but before the
servicing or repayment of any debt.
But the company's statement of intent, a draft version of
which was presented to the Dunedin City Council this week,
makes clear there are risks with financial forecasts for
companies yet to enter the marketplace.
The statement's financial targets for the next three years
included a surplus of $3.3 million to June 2012, and $3.1
million to June 2013.
The targets were based on financial information from the
Carisbrook Stadium Trust based on Horwath HTL reports,
peer-reviewed by Price WaterhouseCoopers, sales forecasts and
advice from the council and its financial advisers.
"Of necessity, forecasting the results of a business that has
yet to start operating entails a number of risks, and the
results should be seen in that light," the statement said.
The financial projections had been prepared "using a number
of realistic assumptions about the future, and relate to
events and actions which have not yet occurred and may not
occur".
DVML chief executive David Davies said the council wanted a
return from the company, "which for us, is really critical".
Asked if he was comfortable the surplus could be achieved, he
said he was, "within reason".
"If all the projections hold, I'm very comfortable with it."
But as the stadium was built, he had no doubt "things will
come out of the woodwork".
After the September 11, 2001, attacks on the World Trade
Centre, for instance, bands stopped travelling to perform.
"What I would say to residents of the city is the stadium is
on target to finish on time and on budget.
"But let's be clear.
"The world will be a different place in two years' time."
As well as the financial aspects of the company, the
statement covers the first three years of its operations.
Its principal role was to operate as a successful business,
but with the direct influence it had in community affairs,
the company was "aware of and sensitive to the community's
needs", and would act in a "caring and responsible" way.
Among the measures the company would take to develop its
community responsibility would be to make its facilities
available to community groups at affordable rates, seek out
and encourage groups who were at present unable to use its
venues, and establish a community scheme at the stadium.
david.loughrey@odt.co.nz
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