Chief Executive s Review. Scottish Golf Union Limited Annual Report 2012/13

Transcription

1 Chief Executive s Review Scottish Golf Union Limited Annual Report 2012/13 1

2 Contents Chairman s Statement... 3 Chief Executive s Review... 6 More Golfers... 7 More Members... 8 Stronger Clubs... 9 Winning Golfers Outstanding Championships National Championships Results Excellent Governance Strong Partnerships Financial Review Income and Expenditure Budget 2013/ SGUL 2012/13 Audited Accounts

3 Chairman s Statement The 2012/13 financial year has been a challenging but ultimately positive year for the Scottish Golf Union. We have continued to evolve the organisation, working across more areas of the golf industry than ever before to meet the demands of our clubs and deliver our agreed strategy, while maintaining a strong financial base from which to grow and develop. The SGU remains in good financial health through sound management of our finances. The importance of our sport within a national context was highlighted by recent independent research from KPMG which found that the golf industry contributed almost 1.2 billion to the Scottish economy during 2011, and that was in a year that Scotland did not stage an Open Championship. To bring this to life, 1m in every 250m generated within the Scottish economy is derived from golf and one in every 125 jobs is golf related. Further research is being undertaken into the social benefits of the game in our country, which, when combined with the economic study findings, will present a more complete picture of golf s significant value to Scotland. We hope this will provide a basis for government to consider additional investment in the industry. We are acutely aware of the trend of declining membership within golf clubs and the past year has seen this continue. This remains the most pressing issue facing golf in Scotland, and indeed across Europe. We have spent time analysing various macro environment factors contributing to this decline, recognising that a permanent change in consumer and social behaviour has had a significant impact. If golf is to maintain its significant position at the heart of Scotland s sporting and social life, it is incumbent upon the SGU to provide leadership to all parts of our Union, and especially to clubs, to respond to the challenges which our sport faces. Most importantly clubs must embrace change to attract more members and ensure the future growth of golf in Scotland. The Board has prioritised the goal of Stronger Clubs. This was the first full year of having our Development Officer team on the ground and we are encouraged by their progress and impact, with 60% of clubs having been engaged since March There have been two key themes of this additional support business planning and good governance; management development training and education for club managers, as well as the ongoing range of club services to support the day-to-day running of clubs. This ranges from environmental good practice, to health and safety, to handicapping and course rating, and much more. The support is designed to help clubs to help themselves to provide a better structure and foundation from which to build a more sustainable business. There is no one solution to the challenges of membership retention and growth, but we are undertaking further research among club managers, club members and nomadic golfers, looking at what the future golf consumer wants from a club. Looking ahead, we will be presenting clubs with a menu of options to consider moving away from the traditional membership model, as we believe a growing majority of golfers will continue to opt out of what is currently being offered. The SGU and the Scottish Ladies Golfing Association (SLGA), the governing body for ladies amateur golf in Scotland, continue to work very closely together, with much of our work now shared across both organisations. For the SGU and 3

4 Chairman s Statement SLGA a key focus throughout this year has been considering what will be an appropriate basis to merge the two bodies. The Amalgamation Working Group, independently chaired by Alastair Thornton, has made good progress. It is anticipated that a proposal for consultation will be available in I look forward to hearing views from everyone with an interest in Scottish golf and its future, on what I hope will be the governance structure for Scottish golf for the next 50 or more years. On the course, the 2013 season was undoubtedly a disappointing one for our leading amateur golfers. There were some positives. Scotland reached the final of the European Men s Team Championship before narrowly losing to England, while the highlight of the year was Bearsden s Ewen Ferguson (below) winning the British Boys Championship. Ewen was one of four Scottish representatives to play for a successful GB&I Boys team that defeated the Continent of Europe in the Jacques Leglise Trophy. All these young men have come through the Scottish Golf Academy. However, we were hugely disappointed not to have had any Scottish representation in September s Walker Cup team for the first time in 49 years. In the professional game, we saw notable victories for SGU graduates Scott Jamieson, Stephen Gallacher and Martin Laird, and we hope that this trio, along with the likes of Paul Lawrie, Marc Warren and Richie Ramsay, all of whom have featured in the world s top 100, can challenge for a place in Paul McGinley s European Ryder Cup team when the event comes to Gleneagles in September. The most significant legacy coming from the Ryder Cup is ClubGolf, the national junior golf programme, which saw a record 48,000 primary school children introduced to golf at school in This takes the total number of children involved in ClubGolf since its launch ten years ago to over 300,000, with a high proportion of new boys and girls members in clubs coming from the programme. Our challenge remains ensuring club membership continues to benefit from these numbers and that our ClubGolfers are welcomed into clubs in a warm and friendly manner which encourages them to stay in the game for life. We also hope this initiative will result in more parents taking up an interest in golf and becoming club members too. Modelled on the successful junior programme, a new adult beginner programme, Get into Golf, was launched at the end of the summer. Clubs are being encouraged to sign up to the programme to help them attract more newcomers into the game and a number of tools are available to help put the programme into place. We hope Get into Golf will grow and provide another option for addressing declining membership. Pleasing progress was made this year against the Scottish Golf Strategy. The governance and operations of our organisation continue to be strong, evidenced by the SGU achieving the highest rating possible when independently audited by KPMG on behalf of sportscotland during the year. I am very pleased that for every 1 contributed through member subscriptions we have managed to generate a further 1.38 from our partners to support the delivery of our strategy. We are extremely grateful to our sponsors, sportscotland as the government sport agency, The R&A and all our other partners. I would also like to record my thanks to the executive team at the SGU for their tireless work. They are ably supported by many, many volunteers across Scotland who contribute in many varying roles. 4

5 Chairman s Statement The SGU simply could not function without the volunteer support, which we conservatively estimate at a value of some 3.4m per annum. Thank you to you all for your ongoing support. It would be remiss of me not to mention the loss of one of the country s greatest amateur golfers, Charlie Green OBE, who passed away earlier in the year, aged 80. The legendary Green represented GB&I in five Walker Cup matches whilst captaining the team on two occasions. In addition to three Scottish Amateur Championship titles, he won the Silver Medal at the 1962 Open Championship as well as numerous other national honours. He will be missed by many across Scottish golf. Finally, I also thank the SGU Board for their efforts overseeing the strategic direction of the SGU. In particular, I would thank retiring Board member Bill Miller who has served for six years overseeing the increasingly important work undertaken in supporting clubs and growing participation. Iain Harvey concludes his term as President and therefore also as a Board member. Iain has been an excellent ambassador representing the Union throughout the past year, and I would also like to record my thanks to him. We look forward to continuing to work with all our golfers, golf clubs, Area associations and partner organisations in the year ahead. Tom Craig Chairman 5

6 Chief Executive s Review Chief Executive s Review Our Vision To lead our clubs, develop champions and provide the opportunity for everyone in Scotland to play golf. Introduction Our strategy identifies seven key goals as the pillars for realising our vision. Our annual performance targets are based on these seven goals. 1. More Golfers 2. More Members 3. Stronger Clubs 4. Talented Golfers 5. Outstanding Championships 6. Excellent Governance 7. Strong Partnerships This review is focused on the Scottish Golf Union s performance across these goals throughout the 2012/13 financial year. It highlights both our achievements and the challenges we face, and documents the actions we have taken to address them. Working with partners at all times our role is to develop and champion the game of golf in Scotland; ensuring we have a healthy and vibrant membership with a strong network of clubs; making the game more accessible than ever before; getting more people playing the game at all levels and producing talented players capable of performing on the world stage. On behalf of the executive team at the Scottish Golf Union, I would like to thank all our stakeholders for their continued support of our activities. Quite simply we could not achieve what we do without their support and commitment. Hamish Grey Chief Executive 6

7 1. More Golfers We have continued to play a lead role as a partner of ClubGolf, the national junior programme, alongside sportscotland, the Scottish Ladies Golfing Association, The PGA and the Golf Foundation. ClubGolf introduced the game to nearly 48,000 youngsters at primary schools during This comprises mainly P5 pupils but also a range of P4, P6 and P7 pupils where some schools choose to deliver beyond the P5 target. A further 1,900 children were introduced to golf at secondary school level. Collectively this represents the highest level since ClubGolf was launched in clubs and facilities are now delivering the programme. Boosted by increased support from the Scottish Government via sportscotland, the emphasis of ClubGolf has shifted towards increasing the transition rate from the introductory stages into junior membership of a club. This is proving a challenging task, but we have growing evidence to suggest an impact is being made. Research has shown that of all new junior members 50% of boys and 61% of girls were introduced to golf through ClubGolf. Significantly, 48% of the boys and girls selected into the Scottish Golf Academy Programme this year have participated in ClubGolf. The programme is clearly making a difference. However, more needs to be done to provide the appropriate welcoming environment for children to engage as members of clubs and enjoy golf for life. As part of ClubGolf s Summer Festival, 69 camps were held at clubs throughout Scotland in July. Helping to inspire more youngsters to take up the game, the festival culminated in hundreds of ClubGolfers attending the Aberdeen Asset Management Scottish Open at Castle Stuart Golf Links, including more than 350 children being involved in a mass coaching clinic on the Wednesday practice day alongside some of the world s leading golfers, which was a fantastic sight to see. Work with clubs and PGA professionals has been stepped up over the past year to help clubs provide an appropriate and welcoming environment for children, not only to undertake coaching but to join the club and hopefully start a lifetime involvement in golf. This is being provided through support for roving professionals at clubs where they do not have a professional to provide coaching beyond the work of the volunteer coaches, and coach development posts, designed to provide support to all coaches, professional and volunteer, delivering the programme. We are indebted to the European Tour and Ryder Cup Europe for funding to support these initiatives once again building on the legacy of Scotland hosting the Ryder Cup in In addition to the significant public sector investment, ClubGolf has also benefited from the second year of Royal Bank of Scotland s headline sponsorship and its partnership with The Gleneagles Hotel, host venue of the 2014 Ryder Cup. Gleneagles and the European Tour once again made a significant funding contribution through proceeds from ticket sales at the Johnnie Walker Championship s 5 Friday. While ClubGolf remains the main focus in this area of work, we have now also launched Get Into Golf a programme designed to help clubs to encourage participation among non-golfing adults. This initiative mirrors the successful programme principles in place with ClubGolf. The Get into Golf toolkit, providing clubs with a range of dedicated resources to help run their own programme, is now available. In the coming year this will be rolled out as widely as possible across Scotland. 7

8 2. More Members Put simply, declining membership and the future economic model for golf clubs, are the biggest issues facing Scottish golf. Membership (including social members) has declined by a total of 14.1% since Taking adult playing membership as a subset of this, there has been a decline of 37,193 or 16.5 % over this time. Adult male membership of our affiliated clubs fell by 2.81% in 2013 to 172,507, a slightly higher fall than the 1.76% reduction in Combining Scottish Ladies Golfing Association (SLGA) membership numbers, the total adult membership in Scotland is now 205,057. SGU/SLGA Affiliated Adult Club Membership * Category Numbers Change Numbers Change Numbers Change Numbers Change Adult Men 172, % 177, % 180, % 183, % Adult Women 32, % 33, % 34, % 34, % Total Adult 205, % 210, % 215, % 218, % Club Membership *Includes social membership. Against this backdrop of declining membership, our goal of having more members is a particularly challenging one. This is not a challenge we face alone. Other golfing bodies throughout Europe face the same challenges. While we believe the weather (before the excellent summer this year) and economy have contributed to this decline, we are now convinced that the single biggest contributing factor is changing consumer behaviour. It is now apparent that if we keep offering what we might call traditional membership as the only option to today s golfer as a take it or leave it proposition, then an increasing number of golfers will leave it. Encouragingly, as far as we can tell from available research the number of people playing golf regularly has not changed over recent times. However, the way those golfers are engaging in golf is increasingly as an itinerant golfer, rather than as a member of a club. This is a major issue when it is considered that in general golf clubs base their financial model on membership. We believe this model and the very nature of membership as we know it needs to be rethought and shaped in many clubs. We will continue to develop these ideas and share them with clubs as we look to the future. That said, 30% of SGU affiliated clubs bucked the national trend to record increases in their membership numbers and we can take heart from those clubs demonstrating success. Working alongside the SLGA and with financial support from The R&A, we again invested 40,000 in a national membership marketing campaign and the provision of marketing tools for clubs, aimed at raising awareness of membership vacancies and the benefits of membership. With few waiting lists, reduced joining fees, more flexible membership payments, new categories and a more customerfriendly environment, we remain of the view that there has never been a better time for the new generation of golfer to join a golf club. In order to gain and retain golfers in the game, you need to be able to communicate with them. We therefore aim to build a relationship with every golfer in Scotland and this year saw continued progress in doing this. Social media was to the fore and this, along with a revamped website and strong e-communications strategy saw the Union regularly communicating with over 30,000 golfers a month. Combined with more traditional means of communication such as the Scottish Club Golfer and media coverage, key messages continue to be promoted. The new Scottish Golf Club Card concept was launched with the support of our sponsors Scottish Hydro to add more benefits to being a golf club member, and the cards will be rolled out to clubs in the spring of

9 3. Stronger Clubs Viable healthy golf clubs are vital for the future of Scottish golf. The current challenges facing clubs make this area the biggest priority in Scottish golf. The Scottish Golf Union s commitment to supporting clubs is therefore stronger than ever. This is emphasised by the continued growth in the wide range of services provided to help clubs run their businesses more effectively. Central to this has been the appointment of three Club Development Officers. Using funds built up from our reserves, the Scottish Golf Union Board committed to a 3-year term for each Development Officer, with the overarching objective of increasing membership at our clubs. The support for golf clubs can be characterised into three categories Business Planning and Governance; Education; and Support Services Within this context the Development Officers are tasked with providing more face-to-face contact with club managers and committee members and giving more in-depth, direct advice on how to maximise the resources and tools at their disposal. Collectively, 60% of clubs have engaged with the Development Officers to date. In terms of business planning and governance, significantly 86 clubs have either completed or are in the process of completing the business planning process that is facilitated by the Development Officers. All feedback suggests that this process and support are of great assistance to those clubs who want to build the foundations to become stronger in the future. We invest a significant proportion of our budget and time in the area of club manager education as we believe in the long term benefits it will bring to our clubs. Launched in 2011, our Club Management Development Programme has become hugely popular and almost 100 clubs have been represented on the courses to date, developing new skills which will make them more effective in their roles. The highlight this year was staging the first Golf Management Programme in Europe. We have further developed the areas of support we offer clubs. We continue to assist clubs with our traditional core functions of handicapping, course rating and rules. We now offer specific guidance on wider issues such as legislation, HR, health and safety, environment, marketing, websites, on-line tee-time booking, child protection, to name but a few. The Centralised Database of Handicaps (CDH) operated for the first season this year. We have around 500 clubs now using the system and a priority is to get the remaining clubs on-line as soon as possible. Once in full operation the system will automate the flow of handicap information between clubs and ease the burden of away score reporting for club managers and secretaries. The CDH will also provide the SGU with valuable information on membership demographics and enable the monitoring of membership trends, which again will deliver many longer term benefits to Scottish golf. Communication to clubs is vital, with an informative monthly e-bulletin keeping managers and committee members up-to-date with the latest news affecting them and providing valuable information on the support services we offer. Social media is also becoming more important for the industry and we offered training in the use of social media for clubs during the year. The SGU s Club Seminar road shows visited 14 venues across Scotland attracting around 200 clubs with over 400 delegates attending. Hosted by the Development Officers and our Golf Club Development Manager, they provide the opportunity for us to gather feedback on what clubs need from us, while keeping clubs informed on the latest initiatives we are undertaking. 9

10 4. Winning Golfers This season was a challenging one for our Men s Squad, with overall performances disappointing. This was counter-balanced by some promising performances by a group of junior golfers that hopefully bodes well for the future. We again enjoyed fantastic in-kind sponsorship from Aberdeen Asset Management and The Alfred Dunhill Links Foundation. When combined with the ongoing investment from sportscotland, our men s players, and where possible around school commitments some boys players, were able to prepare for the year ahead at the SGU s training camp in Abu Dhabi. In January, the squad travelled to South Africa to add a competitive edge to their preparation, again assisted with in-kind support from The Alfred Dunhill Links Foundation and Johann Rupert. These initiatives could not have gone ahead without this sponsorship and we are indebted to all of our partners who made such a significant contribution. Given this support and the opportunities afforded to the players, it is disappointing to report a lack of success in the major GB&I and European amateur events during As part of our ongoing development of our support programmes, greater emphasis is now being placed on results and attitude to retain support going forward. On the team front, the season s highlight was undoubtedly when Scotland narrowly lost to England in the final of the European Men s Team Championship in Denmark. The final singles match was lost at the 19 th meaning a gold medal was just beyond our grasp. Unfortunately, our form did not transfer to the Home Internationals where we failed to defend the title won last year. At boys level, we witnessed some impressive performances on the bigger stage. Bradley Neil and Ewan Scott both stepped up to represent Scotland at men s level this year and acquitted themselves well. A major highlight was Ewen Ferguson winning the British Boys Championship at Royal Liverpool, the first Scottish win in this Championship since Special mention should be made of young left hander Robert MacIntyre from Glencruitten who won both the Scottish Youths and Boys Strokeplay titles during the season with some excellent golf. Ewen Ferguson, Bradley Neil and Robert MacIntyre were joined by Connor Syme (left) in being selected for the GB&I Boys team to play the Continent of Europe team where they enjoyed success. All of these players have come through the Scottish Golf Academy programme and we are delighted to report that 48% of this year s Academy in-take has been developed through the ClubGolf programme, highlighting the work being done at the grass roots level to produce young players capable of moving through the ranks. With the expansion of our Development Centre programme linking ClubGolf and the Academy, and the Am to Pro support at the top end, a robust Performance Pathway is now fully in place which we believe will continue to produce top class players in the future. 10

11 5. Outstanding Championships Staging national championships is a core operation for the Scottish Golf Union. Our portfolio of events remains a major platform to showcase our work. In 2013, we staged 18 national and international events across 31 different venues culminating in 62 days of events within the year, broken down as follows: 11 National Championships (34 days) 4 National Handicap Events (17 days) 2 Junior Tour Events (4 days) European Boys Team Championships (7 days) We are committed to offering a wide range of events for all age groups and abilities. This ranges from some of the world s leading amateur golfers participating in the Carrick Neill Scottish Stroke Play Championship to our youngsters taking their first steps on the ladder by playing junior events, to national handicap events. Our National Championships overall achieved 99% of full fields, with over 88% of participants rating our events as good or excellent in our players survey. The host clubs, to whom we remain hugely grateful, rated the experience with a near 92% satisfaction rating. Our events again benefitted from sponsors investment with a new sponsor, Fairstone Financial Management supporting the Scottish Amateur Championship and the Stephen Gallacher Foundation continuing to support The Scottish Boys Stroke Play Championship, while Belhaven Best extended their sponsorship of our two main national handicap championships. We hosted the European Boys Team Championship for the first time since 1998 at Murcur Links Golf Club. The event was hugely successful with excellent feedback from our European counterparts. Staging the event is a major undertaking and we thank all those involved at Murcur Links Golf Club and the volunteers without whom this, and any of our other events, simply could not happen. Funding support from the R&A was also gratefully received. Interest in all our events was very high once again, achieving a record number of website visitors for any one day, with in excess of 7,000 unique users following the news and score updates at the Fairstone Scottish Amateur Championship. Finally, our inaugural Scottish Hydro Highland Scramble proved a huge success, providing a national event opportunity for players of all levels, open to men, women and juniors, culminating in 12 golfers winning a place in the Scottish Hydro Challenge Pro-Am. 11

12 5. Outstanding Championships 5. Outstanding Championships NATIONAL CHAMPIONSHIPS RESULTS SUMMARY Championship Venue Winner(s) Scottish Boys Championship Golf Data Lab Scottish Youths Championship Monifieth Lanark GolfKings Scottish Area Team Championship Crail Golfing Society Fife Carrick Neill Scottish Stroke Play Championship Scottish Boys Area Team Championship Scottish Seniors Stroke Play Championship Scottish Boys Under 16s Championship Southerness Bradley Neil (Blairgowrie) Robert MacIntyre (Glencruitten) Prestwick St Cuthbert Glasgow Golf House Club Elie Portlethen Stephen Gallacher Scottish Boys Stroke Play Championship The Roxburghe Fairstone Scottish Amateur Championship Loretto School Scottish Boys & Girls Under 14s Championship Blairgowrie, Lansdowne Fortrose & Rosemarkie Garrick Porteous (Bamburgh Castle) Richard Latham (Woodhall Spa) Matthieu Caron (France) Robert MacIntyre (Glencruitten) Alexander Culverwell (Dunbar) Charles Strickland (Ham Manor) & Shannon McWilliam (Aboyne) TSG Scottish Club Championship Luffness New Glenbervie GC Scottish Junior Champion of Champions The Duke's Belhaven Best Captains & Secretaries Championship Downfield Caldwell GC Belhaven Best Club Handicap Championship The Torrance Edzell GC Scottish Hydro Senior Open Champion of Champions Blairgowrie, Lansdowne Postponed due to weather - rescheduled to March 2014 Elaine Allison (Stirling) European Boys Team Championship Murcar Links France NATIONAL ORDER OF MERIT WINNERS Scottish Hydro SGU Boys Order of Merit SGU Men s Order of Merit SGU Seniors Order of Merit Scottish Amateur Golfer of the Year Ewen Ferguson (Bearsden) Jack McDonald (Kilmarnock Barassie) Lindsay Blair (Grangemouth) James Ross (Royal Burgess) 12

13 6. Excellent Governance Good governance is critical to provide a strong platform from which to deliver against our strategy. It is an area we work hard on. We were therefore delighted during the year that a four yearly independent audit of the Scottish Golf Union undertaken by KPMG on behalf of sportscotland, gave us the highest rating possible for our governance and operations. We understand this is the first time any sporting body in Scotland has achieved such a rating. Our key goal in the area of governance remains the amalgamation of the Scottish Golf Union and the Scottish Ladies Golfing Association (SLGA), to create a unified governing body for amateur golf in Scotland. We are pleased to report positive progress, with an SGU-SLGA Joint Working Group established under the independent chairmanship of Alastair Thornton having undertaken a significant amount of work throughout the year. We anticipate the Joint Working Group will produce a proposal for wide consultation in 2014, after which we hope that a positive conclusion can be reached. In the interim the SGU and SLGA continue to work very closely in partnership. The two organisations have a joint strategy and there are several joint posts within our executive team with a wide range of our activities involving both bodies. We continue to operate sound financial management with a tight control on budgets. Budgets are aligned closely with our annual plans. We have once again operated within budget this year while achieving a clean audit with no control issues raised. This reflects the regular forecasts and checks implemented by the executive, Finance Committee and Board and the rigorous budgeting process followed. The executive team operates against a detailed annual plan with targets and objectives in each area, and success measured against our scorecard. In 2012/13, 67.5% of our targets were achieved. Our executive team continue to play a huge role in the day-to-day management of the Scottish Golf Union and they remain one of our biggest assets. This year we measured the level of club satisfaction with the SGU s performance and the feedback received from just over 100 clubs was very useful as we look to shape, refine and improve our services. The overall satisfaction rating was 80% with ratings on each of the specific service areas of golf services (rules, handicapping and course rating), Development Officers (governance, business planning and training), SGEG (environmental management advice) and ClubGolf (national junior programme) broken down as outlined in the following graph. Our challenge and commitment is to improve on these ratings year on year. CLUB SATISFACTION SURVEY 13

14 6. Excellent Governance In 2013, both the SGU and SLGA achieved the Preliminary level of the Equality Standard for Sport, demonstrating our commitment to the principles of equality and diversity. This work is important not only to demonstrate this commitment but also to ensure that as organisations and as an industry, we embrace people irrespective of age, gender and all other protected characteristics in the pursuit of our goals. Good communication with our various audiences is pivotal to the success of our governance. We continue to work hard to ensure that our key messages are reaching the right people. We generate good coverage for our events, players and wider activities, through the national media. Further, the SGU website plays a key role in our goal of engaging with every golf club member in Scotland. Our website was completely revamped this year and traffic now averages over 30,000 unique users per month tuning in to receive the latest news, results and updates. Communicating directly to golfers remains a key part of our strategy and more than 20,000 golfers now receive the monthly Golfers e-bulletin, while we are engaged on a daily basis with in excess of 7,000 followers on our Facebook and Twitter social media channels. This year has seen the SGU establish The Scottish Golf Charitable Trust. This charity has been established to raise funds to support public participation in golf, education for young players and golf club managers, and good environmental practice at golf clubs in Scotland. Three initial Trustees have been appointed Douglas Ross, Maurice Shields and Jim Christie, and the SGU will provide the administration of the charity. We hope its fundraising activities will contribute significantly over time to developing golf in Scotland. 14

15 7. Strong Partnerships The SGU could not deliver its strategy without the support and engagement of partners across all aspects of our work. Building and strengthening our relationships with these partners, whether private sector, public sector or golf industry organisations, through our growing portfolio is testament to the success we have enjoyed. We have proven to be an attractive partner ourselves, with many organisations associated with us on a long-term basis, which can only be beneficial for the game. We generated record levels of cash sponsorship during 2012/13, with over 350,000 of income raised. Relationships with long-term sponsors such as Aberdeen Asset Management, Belhaven, Carrick Neill, Loretto School and RBS continued, while significant new investment from SSE Scottish Hydro and GolfKings Travel was added. Our association with one of the world s leading golf companies, TaylorMade-adidas Golf, was extended until at least In-kind sponsorship support reached an estimated value of 250,000 through partnerships with the Golf Foundation, The Alfred Dunhill Links Foundation, TaylorMade-adidas Golf, TSG and Golf Data Lab, helping reduce our costs and adding value to various projects. The Scottish Golf Awards proved a huge success for our fundraising activities, with a record attendance of 570 guests helping to raise more than 25,000 for junior golf. We launched the SGU Patrons Club and the Scottish Golf Charitable Trust later in the year, both of which will enable us to access funding from different sources in the years ahead. Our biggest external contributor was the Scottish Government through sportscotland, who continued to recognise the important role golf plays in Scotland by maintaining their investment in our operations. ClubGolf, the national junior golf programme, is the biggest benefactor, with support also provided for developing talented golfers and development work. However, effective partnership working involves more than just financial support. sportscotland has excelled in this regard by providing the SGU with advice and support to improve our operations in what can only be described as true partnership working. Within the public sector we also work closely with EventScotland, VisitScotland and Scottish Enterprise with the same benefits accruing. Across the golf sector, The PGA and European Tour are increasingly close allies and we continue to work with them across many aspects of our business. We have developed key partnerships with various industry bodies, including the Club Managers Association of Europe and the British and International Golf Greenkeepers Association. In addition we are most grateful that The R&A continue to support many key projects, including the Scottish Golf Environment Group, coaching and membership marketing. We also remain indebted to our partnerships with some of Scotland s leading championship venues. Their provision of winter tee-times offered to affiliated club members at preferential rates generated in excess of 10,000. We thank the Honourable Company of Edinburgh Golfers, Prestwick and Royal Troon for their continued generosity which is used to benefit junior golf. Diversifying our income streams is critical for the SGU. We try to leverage all membership generated funds as much as possible to grow income from elsewhere, thereby enabling us to increase investment in developing Scottish golf. Based on the combined 2012/13 accounts of the SGU, ClubGolf and Scottish Golf Environment Group and including in-kind sponsorship, for every 1 derived from membership income we generated another 1.38 of income from other sources. We aim to improve this ratio year on year. 15

16 Financial Review Financial Highlights SGU turnover increased by 8% to 2.896m; Surplus before Special Projects of 1,400; Net Special Projects investment of 180,500 from reserves to support our clubs; Subscription income decreased 0.5% to 1.67m; Increase in cash sponsorship revenue of 23% to 367,000, the highest ever; Turnover, including in kind sponsorship, for the SGU group of companies totals 4.03m; and Across all the SGU group of companies, for every 1 invested by member clubs a further 1.38 has been generated to benefit the development of Scottish golf. 2012/13 Financial Results The 2012/13 audited accounts can be found in the next section. They show a deficit for the year of 179,100 compared with a budgeted deficit of 221,800. A surplus of 1,400 was achieved against a budgeted surplus of 7,200 before Special Projects are considered. Special Projects comprise actions agreed by the Board to assist and support clubs utilising available reserves over a fixed time (three years to 2015) for this purpose. The Union was successful in obtaining further unbudgeted grants and donations to support various activities. These are cost neutral and contribute significantly to our ability to deliver our strategy. Sponsorship revenues, sportscotland funding and other income held up well. At 30 September 2013 Reserves stand at a healthy 0.94m and total cash balances at 1.216m. The following graph illustrates the progression of the reserves since 2010, reflecting the Board s decision to release over 0.5m of reserves to support clubs in the period to SGUL SGUL Reserves Reserves The audit of the Union s finances found once again that the systems and procedures for managing our finances are robust and appropriate. 16

17 Income and Expenditure The Board constantly reviews the Union s expenditure, including expenditure in its two subsidiary companies. It endeavours to strike the correct balance of expenditure across the seven pillars of the Scottish Golf Strategy, namely More Golfers, More Members, Stronger Clubs, Winning Golfers, Outstanding Championships, Excellent Governance and Strong Partnerships. The following sections demonstrate the Union s sources of income and areas of expenditure across all activities for 2012/13 (actual) and 2013/14 (budgeted). The allocation shown within these pie charts is, and will be, reviewed regularly by the Board as we move forward. When reviewed against prior years it continues to demonstrate an increased focus by the Board on activities to support clubs. This is a deliberate strategy and will remain the focus in the foreseeable future. Year to 30 September Actual The SGU s group of companies comprises Scottish Golf Union Limited (SGU) and two subsidiary companies, ClubGolf Scotland Limited (CSL) and Scottish Golf Environment Group (SGEG). The SGU is a shareholder along with the Scottish Ladies Golfing Association (SLGA) and Professional Golfers Association (PGA) in CSL. SGEG is a wholly owned subsidiary. Both companies enjoyed successful years contributing significantly to growing the game by introducing children to golf and providing clubs with advice on the sustainable management of their golf courses. In order to best understand the full extent of the Union s activities and how funding was generated and spent in the financial year, the following figures aggregate the three sets of accounts. The Companies also receive significant non-financial support in terms of in-kind sponsorship, which is included in the analysis. In this respect the figures outlined below and in the related pie charts represent the SGU group of companies and the full breadth of its operations. Actual Income Year to 30 September

18 Income and Expenditure Subscriptions The revenue derived from the per capita subscription charge of per adult male playing member generated 42% of total income. This means that for every 1 generated through membership, the SGU has managed to leverage another 1.38 to benefit Scottish golf. sportscotland Golf receives excellent support from sportscotland to fund coaching and provide competitive playing opportunities for our squads. The national junior programme, ClubGolf, is also funded by sportscotland. Other Government Funding During the year the Scottish Government provided additional support for ClubGolf activities relating to a number of coaching camps throughout the country for junior golfers, promotion of junior golf at the Scottish Open and a focus on junior membership. This additional support was agreed for three years and continues until March Funds were also sourced to support research and club development. Sponsorship and In-Kind Sponsorship The SGU works with a strong portfolio of sponsors and partners providing cash sponsorship to enhance our activities. This cash sponsorship has continued to grow to record levels. In addition, we received considerable non-financial support from several organisations such as Aberdeen Asset Management, The Alfred Dunhill Links Foundation, TaylorMade-adidas Golf, The Golf Foundation, Highland Spring and Ransomes Jacobsen. Collectively this additional support assists significantly with the delivery of the Scottish Golf Strategy. The R&A The R&A is the world governing body for golf and supports the SGU in many ways. Grants from The R&A support initiatives to attract new members, junior coaching and the environmental work of SGEG. In 2013 support was also provided to assist in staging the European Boys Team Championship. Event Entry Fees Event entry fees relate to the entry fees charged to participants in national championships and other SGU events. Other Income Further income is derived from bank interest and other commercial revenue streams. We also continued to receive funding through the support of three of Scotland s leading golf clubs through the proceeds from sales of tee-times to SGU club members. 18

19 Income and Expenditure Actual Expenditure Year to 30 September 2013 Expenditure for the year has been split into the 7 pillars of the Scottish Golf Strategy:- More Golfers initiatives to increase participation in golf throughout Scotland, including the national junior programme, ClubGolf, and our new adult beginner programme, Get into Golf; More Members initiatives to increase membership of golf clubs, add value to existing members and increase our engagement with members; Supporting Clubs to assist and develop golf clubs in Scotland through advice, training courses and various research and development activities; Winning Golfers activities across our performance programmes support and develop talented golfers of all ages to participate in key national and international events; Outstanding Championships staging of all national and international events held in Scotland for golfers of all abilities and age groups; Excellent Governance development of the staff and performance of all statutory and administrative duties including VAT and Corporation Tax; Strong Partnerships activities to support, build and manage relationships with existing sponsors, strategic partners and the targeting of prospective sponsors and partners. 19

20 Budget 2013/14 Turning to the new financial year the Scottish Golf Union budget for 2013/14 anticipates a small deficit of 10,000 at the year end. The reason for the budgeted deficit is the unusual timing of the World Amateur Team Championships in 2014, which will result in all expenses being incurred in the current financial year. This is before the impact of Special Projects totalling 195,300. Overall the SGU has budgeted for a deficit of 205,300 in the financial year. The pie charts below show the expected sources of income and areas of expenditure for the SGU Group of Companies in the year to 30 September Budgeted Income 2013/14 As can be seen, subscriptions are budgeted to be a smaller percentage of total income (40%) than 2012/13 (42%), with a corresponding increase in other funding sources. 20

21 Budget 2013/14 Budgeted Expenditure 2013/14 This year s budget once again anticipates a greater proportion of spending on More Golfers, More Members and Supporting Clubs (25% in 2013/14 versus 22% in 2012/13). This reflects the commitment of the Board to assist clubs to generate growth through the use of available funds, including reserves. The budgeted reserves at the end of 2013/14 will be 735,000. Cash balances are budgeted to be circa 1m. 21

22 Scottish Golf Union Limited The Duke s St Andrews KY16 8NX T: E: sgu@scottishgolf.org W: scottishgolf.org Scottish Golf Union Limited The Duke s St Andrews KY16 8NX T: E: sgu@scottishgolf.org W: scottishgolf.org 22