APSC Treasurer Q2- Full year projection, BLUE SKIES!
Hi APSC members I would like to provide a second quarter (Q2) full year update. This builds onto the positive outlook I provided in my first 90 days as your Treasurer. Below is the revised plan I presented to our board at our past meeting.
Executive summary of Q2 APSC full year financial projection
Significant 25% improvement in APSC’s financial health. Operating Reserve Ratio improved from 1.2x to 1.5x. APSC is financially strong achieved through
- +45% projected increase of revenue compared to 2019
- -50% reduction of variable annual expenses (11% of fixed + variable expenses)
- Improved financial health despite significant Club house renovations costs
Treasurer’s 2020 top 3 Objectives- Michael’s promise
- Develop new top line revenue growth
- Expense control
- Improve financial health reserve and make significant club improvements
Here are the details behind the Q2 update. These are the strategies contained in the ‘Ready About’ plan underpinning the Top 3 Objectives.
First starting with ‘Developing new top line revenue growth’. The Q1 financial plan doubled the marketing budget vs. past years to fire up new member acquisition. The funds are enabling paid advertising and purchasing of other physical marketing materials. Customized targeting marketing campaigns are working and have helped bring in 10 new members so far. This is a significant achievement in any year and even more impressive during challenging times. I want to take this opportunity to recognize Greg Graham for his exceptional hard work and to welcome our new APSC family members. Thank you Greg and welcome to:
|Jaime Restrepo||Jeff James & Kate McCormick|
|Vincent Grossi||Michelle Robidoux & Christine Beckermann|
|Graham Reid||Peter Wenniger & Preema|
|John Haig||Mike Chmura & Beata Szwoger-Lettecki|
|Jack Willoughby||Julia & Miomir Koledin|
Our full year financial plan is forecasting a total of 15 new members for 2020. A new acquisition marketing campaign will be starting this month to support this forecast. Due to Covid 19 our plans for the fleet program, a new revenue source, is on hold until 2021. Strategically our fleet program will position APSC as the only sailing club helping land lubbers to become skippers. The fleet program will also be positioned to honor our most senior members by helping to extend their sailing journey by removing vessel upkeep.
Second item ‘Expense Control’– Very little to add here since it is complete. Full details can be found from my first 90-day report. We have reduced variable expenses by 50% with no lost in membership value. We will continue to gain future yearly savings to reinvest back into the membership value. We are getting the same or better service levels at a significant reduced negotiated cost. Our Social expenses has come down this year due to Covid 19, however the savings were offset by a much larger loss of work hour revenues.
Lastly ‘Improve financial health reserve …’– I am very proud to say we have achieved financial strength! The benchmark used to gauge APSC financial health is an Expense Operating ratio of 1.5 times. In plain English 1.5x is the number of seasons APSC can operate under catastrophic failure of zero revenues. The 25% improvement was achieved by eliminating non value add expenses and investing to aggressively growing revenue. If the one time kitchen renovation was amortized over multiple years our Expense Operating ratio will improve to approximately 1.8x. This gives the treasurer something to look forward to in 2021!
‘…make significant club improvements’. I will start by thanking John Morra our House and Grounds executive for leading the enormous renovation of our club house and Brian Burchell Harbor Master for making our mooring fields safe. From our membership I want to personally recognize Marc Davies and Barna Moricz for all the extra hours and passion dedicated to help with significant club improvements. I sincerely thank you.
At the Q1 general meeting our membership approved a significant capital investment out of our reserve fund to undertake club improvements. I am proud to say our revised financial forecast will not only cover the entire club renovations this fiscal but will even grow our reserve fund. Our strong financial performance will provide new options and I will continue to listen to each and every member to share your ideas with our board.
As many of you are aware, I immensely enjoy our many conversations. I wanted to share a recent ‘dock talk’ that will help guide my work and vision with the board in the remaining term. A member shared, “keep up with the many needed improvements, but please don’t change what makes APSC unique”. These are wise words with a deep meaning.
I look forward to seeing everyone on the water and sharing our progress in my Q3 report. APSC, blues skies ahead!