Finance boost for stadium operating firm

Dave Davies
Dave Davies
The finances of the company running Dunedin's Forsyth Barr Stadium look set to improve after cost-cutting and a cash injection from the Dunedin City Council.

Dunedin Venues Management Ltd's revised statement of intent - setting the company's objectives for three years to June 2015 - were presented to councillors at yesterday's finance, strategy and development committee meeting.

The document showed the company was still expecting to make annual losses throughout the period, but of much smaller amounts than forecast earlier this year.

In May, when DVML revealed a $1.9 million loss for the first six months of the 2011-12 year, the company also projected losses totalling $3.3 million for the period.

The revised document, accepted by councillors yesterday, now forecast losses in those years totalling $873,000.

In part, that was due to a review of operating costs carried out by the company in recent weeks, as well as expectations of growing revenue, DVML chief executive David Davies said.

However, the improvement also largely reflected the decision by councillors to contribute another $750,000 a year to the DVML budget, council finance and resources general manager Athol Stephens told yesterday's meeting.

That decision came during the council's budget deliberations earlier this year, after details of DVML's financial position were revealed, and DVML had also been reviewing its own budget, Mr Stephens said.

The decision to revise DVML's original statement of intent was made after revelations of the company's losses, future forecasts, and the need to increase council funding to offset the company's deficits earlier this year.

Statements of intent were supposed to be approved by June 30, but Audit New Zealand had supported an extended timeframe for DVML - together with Dunedin Venues Ltd, which held the stadium assets and debt - to allow revised documents to be prepared.

However, the new documents could be short-lived, with another revision needed once a review of DVML and the stadium operation was completed by Dunedin City Holdings Ltd later this year.

Committee chairman Cr Syd Brown said the review was expected to lead to a "new model", requiring new statements of intent.

Cr Lee Vandervis asked Mr Davies whether it was likely large losses would continue under the new model.

Mr Davies said it was difficult to preempt the results of the DCHL review, and it would be more appropriate to answer that question once the review was completed.

"I don't know what they [DCHL] have in mind at the moment," he told the meeting.

However, use of the stadium would change as DVML staff became more familiar with it and were in a better position to tailor its operation to the needs of its users, he said.

Councillors, with the exception of Cr Vandervis, voted to accept the revised statements of intent, following the discussion.

- chris.morris@odt.co.nz

 

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