Chairman’s Message
Dear fellow Members,
I am writing to you as we endure the third lockdown since Covid 19 began and I know how frustrating this has been for all of us not to be able to enjoy our Club’s facilities. Sadly, the necessity for the closure becomes clearer as we have learned of more and more people becoming infected. These include fellow Members and staff and we wish them all a swift and complete recovery.
The Board understands that times are hard for many Members whose businesses have been severely affected by the repeated lockdowns and associated restrictions. We have received some enquiries from Members about the possibility of refunds of subscriptions or similar measures. Such requests have been small in number, but they raise an important issue which the Board considered at its meeting last week.
As a reminder, the Board considered very carefully at the end of last year what it could offer Members as compensation in 2021 for the enforced closures within the fiduciary duties its Directors are entrusted with. Ensuring the Club preserves its short and long term future was an absolute priority. I indicated in my three letters to Members in August, October, November and again two weeks ago that the Club doesn’t have a pot of reserves to delve into to compensate Members financially for every closure or lockdown we experience. As an example, if we just compensated for just three months non-use of the Health Club for every adult Member as a starting point that would cost the Club £1.5m. The Club doesn’t have the monies to do that for last year, in 2021 or for the foreseeable future. It would be irresponsible of the Board to put the Club in such financial jeopardy.
Instead, we offered a freeze on subscriptions, a carryover of unspent 2020 annual levy and no charge for the 2021 levy – all helping to reduce the outlay for the 2021 subscriptions. The effect of these measures was to reduce the Club’s 2021 EBITDA by nearly £300k compared to what it would have been had we raised subscriptions in line with inflation and required payment of the levy in the normal way. As the base for future increases in subscriptions is also thereby lower, the loss of income to the Club in future years is compounded.
We received £660k back from the furlough scheme against a £3.3m annual wage bill and saved £260k on our annual rates bill. These funds have been partly used to invest in new outdoor catering facilities which have proven to be extremely popular, erect safety fencing on the golf course to prevent its potential part closure for safety reasons and to install padel tennis courts for all ages to enjoy in the spring. We have also incurred significant Covid-19 related costs, topped up staff’s wages while on furlough, and paid for our extensive online tuition programme plus essential repairs to the Health Club roof and plant room. We want to continue to maintain, and where appropriate to improve, the Club for the Members that own and use it.
The large projects listed in the Masterplan 2035 have been deferred for the time being. We spent little on capital development in 2020 and moved the padel tennis project into 2021. Our only plan this year, apart from the padel tennis project, is to replace the seasonal Tennis Airhall on courts 12 to 14 that again we moved forward a year to save monies. That Airhall is now beyond further use.
Cost savings have been made whenever appropriate to do so; vacancies have not been filled and as I reported last year, we regrettably had to make a small number of redundancies. This is an ongoing process which management and the Board regularly review.
In summary, the Board thinks that now is not right time to decide on measures of compensation as the outlook and the duration of the lockdown remains very uncertain. Although the Club receives a large amount of income in January from the payment of subscriptions, that must last the whole year. In normal times, that income is supplemented by secondary income from food and beverage, events and tuition fees. That income will only be forthcoming at very much lower levels than usual.
The Board will consider the position again at its March meeting. By then we all hope that the vaccination programme will have gone well; that there will be a plan announced by the Government for the lifting of the lockdown and we can see what use of the Club will be permitted from March. We will have gained by then a better idea of our financial position to be able to announce what we can do to compensate Members for the loss of use of the Club in the early months of 2021.
Meanwhile, the following is being done to prepare the Club for reopening:
◊ Glass for new Piazza Pavilion and Bar Terrace Canopy has been installed (images below)
◊ Padel Court construction has begun click here
◊ The new Piazza Coffee Shop has been delivered and is being commissioned.
◊ 18th Tee safety Project – tee turfed, fencing posts in place click here
◊ 10th Tee safety Project – Planning application to be submitted for 30m high fencing
◊ New kitchen induction hobs to replace old and energy inefficient ovens
◊ New channels between croquet lawns 2 and 3 to improve drainage
◊ Weatherproofing of the bandstand in the gardens for family use
At present most of the staff have been furloughed and the Board has approved the top up of wages for all such staff to 100% above the 80% received from the Government. This will cost the Club about £30,000 per month but we feel that the staff are the greatest asset of the Club. The Board believes that we have a practical and moral interest in their health and wellbeing especially as this is the toughest time of the year for many. We will also review this policy in March. There is no commitment to continuing this beyond then.
I know that there are a range of views amongst us Members. Marc Newey and I have received emails urging various courses of action, often diametrically opposed. The Board welcomes such expression of views, courteously and respectfully couched. It is not possible to agree with everyone. I trust however that we can all agree on the need to focus on the long-term stability of our great Club and the health and welfare of all members and staff.
I wish us all good health and please stay safe.
Best wishes
Alan