Hi Everyone,
Having now passed the shortest day (with some record warm
temperatures) and the end of our financial year we are now charging
on our way to the summer of 2016/17 - it's a bit scary thinking
there is just 14 weeks left until patrols begin again!!
The June Board meeting was held in Wellington on Sunday
26th June and was our last meeting for the 2015/16
financial year.
From a financial perspective the results for the eleven months
to 31st May are a Net Operating Surplus of $1.058
million, which is $68,000 ahead of budget. This small
positive variance is all due to timing variations. A
explanation of these variances is in the attached Financial Summary
Dashboard.
More importantly the latest forecast the full year Net Operating
Surplus will be around $87,000. The reason for the big drop
in June is that this is when the depreciation costs are charged
(around $0.5m) plus there is very little income in June so there is
traditionally a big deficit in the month.
Our small forecast profit is a positive, and follows two strong
years of turnaround. We continue to be challenged by the ever
changing Grants and Sponsorship environment. It is pleasing
to have the team constantly looking to keep tight control of costs
to fit the world we live in. The forecast Net Operating Surplus is
however $264,000 less than budget, this downside resulting from our
NZLGB grant being $200,000 less than budget, a short term
sponsorship of $100,000 not being renewed, and two gaming trust
grants being a combined $160,000 less than budget.
Fortunately we did achieve a few wins along the way to offset this
and after Capex and depreciation we still add a good level of
positive cash-flow to continue rebuilding our reserves.
As I noted previously, the targets set for this year were
deliberately very aggressive, knowing that we would be starting to
see the reduction in State Insurance sponsorship income. Both
I and the Board are comfortable with the forecast outcome for the
year.
Significant items of note from the meeting are:
- The Board reviewed the 'detailed' version of the SLSNZ 2016/17
Strategic Plan. The 'summary' version was circulated to clubs
a couple of months ago and is also available on the SLSNZ
website. The detailed version goes down into depth on
individual actions, timings and responsibilities for the management
team - and is the document that is reported on back to the Board as
the year progresses. The Board was happy with how the plan
has come together and we are looking forward to seeing it put into
action.
- We are lucky to have the Chair and CEO of SLS Northern Region
join us for a productive few hours. The discussion
covered many topics and highlighted some good initiatives to ensure
we remain closely aligned, and continue to help each other in the
areas where we have mutual interests. We will be
re-establishing a regular board-to-board dialogue, which will allow
us to continue to drive our key message to key stakeholders and
partners.
- One of the areas we discussed was the new Accounting Standards
Framework (PBE IPSAS 6) for Public Benefit Entities such as
ourselves. This is the first year these new standards are
being implemented and a major question for SLSNZ is whether we
should consolidate all 74 Clubs into a single national "Group".
This consolidation would just be for financial reporting
purposes, and would not change how SLSNZ and Clubs operate today.
After a lot of discussion with Management and our advisors,
the Board has decided we will not consolidate member
Clubs (and their associated trusts) into a single national
Group. The Board believes SLSNZ does not cross the threshold
of power and
benefit, i.e. that it has the power to effect operational
and financial policies of Clubs to the point where it derives a
financial benefit from that power. Consolidation is not
favoured because it is likely to suggest that surf life saving
collectively has substantial resources and result in challenges for
maintaining grants and sponsorships, and is likely to drive
significantly higher operational and audit costs. If Clubs
have any questions about these new reporting standards you should
discuss your specific circumstances with your
accountant.
- Sustainability was another major theme for the meeting - with
the Board doing a final check of the 2016/17 budget before it gets
loaded. We also had a good discussion on the importance of
diversification of revenues. The establishment of the SLSNZ
Foundation and growth in the fundraising area were given particular
attention. To the Board, revenue sustainability means
reducing our reliance on gambling related revenues, and this has
been highlighted with the volatility in NZ Lotteries Grant Board
funding this year, and is forecast to continue next year as
well. Combined with increased competition for reducing levels
of funding from gaming trusts we are working on revenue diversify
as fast as possible. On that note I hope you have been buying
your lotto tickets recently - large jackpots help maintain all our
funding from NZ Lotteries Grant Board. Progress on replacing State
Insurance as a sponsor was also given close scrutiny. The
Board noted that the SLSNZ Foundation Trust Deed was in the final
stage of execution and would shortly move on to being officially
registered, which is an important milestone with this
initiative.
- Also of real importance to the movement was the discussion on
Board appointments, with applications now open for four Board
positions that have come up for rotation this year.
Applications close on the 25th July and then the Board
Appointments Panel (which I chair) will begin their work. As
a panel we enjoy having lots of choice of quality candidates, so I
encourage people who want to contribute at a governance level to
give it some serious thought.
- In looking at Health & Safety, the reduction we saw
in the total number of injuries to members through the year does
seem to be real now. Excluding National Sports events and
SLSNZ employees there were 32% fewer incidents than last year where
members needed first aid treatment (dropping from 392 to
265). At the serious injury end of the spectrum there were
similar improvements with 21% fewer needing doctors treatment (48
down to 38) and 48% fewer needing hospital treatment (21 down to
11). More information will come out to clubs on those serious
incidents so you can see the kinds of incidents that are occurring
and test your own systems to make sure you have the root causes
covered in your club.
- In terms of decisions the Board endorsed the selection of
nominees for roles on the International Lifesaving Federation
Commissions, for which elections will take place at the General
Assembly being held in September in the Netherlands. There were
four nominees endorsed - Wayne Franich for the Sport Commission,
Graeme Cullen for the Business Commission, Michael Bassett-Foss for
the Drowning Prevention Commission and Nick Mulcahy for the Rescue
Commission. The Board also approved the application for the
new Governor General to remain as the patron of SLSNZ. Vice
Regal patronage does not automatically continue when there is a new
Governor General so an application process is required.
And that's it from the meeting. In terms of other topics I
would encourage clubs to register your delegates for the SLSNZ AGM,
as there are only 6 weeks left to do that. We had a great
turnout last year and look forward to at least as many this
year. Make sure you also send our CEO any topics you would
like to discuss at the Club Chairs Workshop earlier in the day.
The next Board meeting will be held in Wellington on Friday
18th August. So until my next update……
Yours in surf,
Geoff Hamilton
Chairman
Surf Life Saving New
Zealand
