Forsyth Barr Stadium looks for first annual profit

The CCO (council controlled organisation) running Dunedin's Forsyth Barr Stadium is poised to deliver its first profit on the back of tighter finances and a cash injection from ratepayers.

Dunedin Venues Management Ltd (DVML) is forecasting a profit of $395,000 for 2015/16, rising to $440,000 and $500,000 in the following two years.

DVML Chief Executive Terry Davies says he hopes, in time, to increase the surpluses to $600,000 a year.

The profits would help build up a cash reserve to reinvest in DVML's venues, including the stadium, and attract more events.

That would help expand the business and eventually allow the company to start paying a dividend to the Dunedin City Council, he told the Otago Daily Times.

It would also allow DVML to keep delivering on its core aim - attracting events that brought with them economic benefits for the city.

Davies explained “we want to build up some cash so we can continue to reinvest in the business and deliver great events for the city.”

The predictions of profit were outlined in DVML's latest statement of intent, outlining its financial forecasts for the next three years, as presented to the Dunedin City Council.

The forecasts are a dramatic turnaround from last year, when the company was anticipating losses totalling $3.34 million over the following three years.

The results reflected the anticipated impact of the Council's stadium review, which recommended a raft of changes to stadium finances designed to help DVML turn annual losses into profits.

That included halving DVML's annual rent, paid to help service stadium debts, to $2 million, and transferring another $30 million of stadium debt to the council's books, and funding for future stadium renewals.

Together the changes would raise the ratepayers' stadium bill by $1.81 million a year, to $11.65 million a year.

Davies said the changes reflected the need to ensure DVML operated under a "realistic business model" without putting its hand out for Council top ups in future.

He added “(DVML) can build up some cash and reinvest back in its business so it can continue to grow and continue to deliver.”

Davies added that the forecasts also reflected a better understanding of the business, and tighter control of staffing and budgets.

Forsyth Barr Stadium is owned by Dunedin Venues Limited (DVL) and managed by DVML, both owned directly by the Council,

Image shows Terry Davies at Forsyth Barr Stadium.

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