THE EDEN PARK TRUST. BledisloeCup, August 2014 ANNUAL REPORT

Transcription

1 THE EDEN PARK TRUST BledisloeCup, August 2014 ANNUAL REPORT 31 OCTOBER 2014

2 CONTENTS Report from the Chairman 3 Key Events 8 Financial Statements 11 Audit Report 36 Directory of Board Members and Executives 39 Board Member Biographies 39 Private Bag 56906, Dominion Road, Auckland

3 REPORT FROM THE CHAIRMAN Introduction It is my pleasure to present my final Annual Report of The Eden Park Trust (EPT) for the year ended 31 October The comparative prior period is the 12 months to 31 October The 2014 financial year was satisfactory, from both an operational and financial perspective. Key milestones in the year included the following: Events A strong programme of international cricket was played at Eden Park over the summer. The Black Caps faced the West Indies team in a T20 and an ODI, followed by a thrilling tied ODI match and a test match against India; The inaugural Dick Smith NRL Nines rugby league tournament was played over two days in February Pitched as a family friendly event, capacity crowds were treated to a wonderful event which is now becoming a major annual event for Auckland; The Blues completed a successful schedule of seven matches at Eden Park, losing only their final match; The All Blacks continued their unbeaten streak (since 1994) at Eden Park, resisting a strong challenge from the England team in June before delivering a comprehensive performance against the Wallabies in August, to retain the Bledisloe Cup; Three finals matches of the IRB Junior World Championship were played at Eden Park in June, with England victorious over South Africa in the grand final; The annual club rugby finals were played before good crowds in August 2014; Auckland s ITM Cup rugby team completed an unbeaten five-match home season on Eden Park; The Wellington based Phoenix Football Club played twice at Eden Park an A-league match against Adelaide in February and an historic victory over the English Premier League side West Ham in July; The Vodafone NZ Warriors rugby league team played three NRL matches at Eden Park during the year; Eden Park hosted community events including the Muslim community s Eid Festival, celebrating the end of Ramadan; Eden Park Catering hosted over 1,000 functions, ranging from three-day business conferences and corporate Annual General Meetings to school balls and weddings. Governance and Management During the year Mr Derek Dallow retired from the Board and was replaced by Mr Doug McKay. I would like to thank Derek for his significant contribution to the Eden Park Trust during his tenure as a Trustee. The board currently comprises four Crown appointees (one position remains vacant) and two appointees each from Auckland Rugby Union (ARU) and Auckland Cricket Association (ACA). The Crown is continuing to work with Auckland Council regarding the right to appoint the Trustees currently appointed by the Crown. There were no changes to the Executive Management Team during the year. 3

4 Operations The Eden Park turf, facilities and game day operations personnel have once again delivered a fixture schedule of the highest quality in the year under review. This would not have been possible without the involvement of subcontractors (including caterers, security and cleaners) and external parties, including venue hirers, Auckland Council, Auckland Transport, the Police, the Fire Service and all other services, all of whom are essential to Eden Park s high standard of event delivery. The inaugural Dick Smith NRL Nines rugby league tournament in February, promoted by Duco Events, was a significant addition to Eden Park s event calendar. Every aspect of this event has been heralded as a success, from the weather, the crowd participation and engagement, to the on-field team performances and entertainment. The tournament was promoted as a family and fan-friendly event, which was borne out by the excellent feedback from within the stadium and the local community. This event is set to become an annual iconic draw card for locals and visitors to Auckland. There were no rugby league international matches at Eden Park during the year. However, Eden Park remains committed to hosting the Warriors, other NRL clubs and international rugby league matches whenever possible. Eden Park was host to All Blacks test victories against England and Australia. Both matches were played before full-capacity crowds. These victories increased the All Blacks unbeaten record at Eden Park to 33 matches, stretching back twenty years, to Eden Park Catering, from which the Trust earns a commission, has had a strong year thanks to the increased number of events held in the year. A summary of major sporting events held at Eden Park in the year is as follows: Type Number 2014 Crowd 2014 Number 2013 Crowd 2013 No.1 Ground Events: International Rugby 2 95, ,400 Super Rugby 7 122, ,600 ITM Cup Rugby 5 17, ,500 Other Rugby 2 7, ,000 International Cricket 4 80, ,700 HRV Cup Cricket 3 12, ,500 Football 2 36, ,600 Rugby League 4 141, ,300 Total , ,600 4

5 Finance The Trust had a satisfactory financial year, posting a net operating profit before interest, depreciation and other comprehensive income of $2.836m (2013: $2.203m). The financial results attached are briefly summarised as follows: $ Total operating income 14,115 12,731 Total operating expenses (11,279) (10,528) Net operating profit/(loss) 2,836 2,203 Interest (net) (2,224) (1,913) Other comprehensive income Profit before depreciation 997 1,181 Depreciation (8,396) (8,395) Total comprehensive income (7,399) (7,214) Eden Park s improved operating performance in 2014 over 2013 was driven by additional events, particularly the NRL Nines, but also the Phoenix v West Ham match and the IRB Junior World Cup finals matches. The resulting net operating profit of $2.836m (2013: $2.203m) was above budget. An increase in net interest costs and a reduction in other comprehensive income compared to the prior year left an overall profit before depreciation of $997k (2013: $1,181k). After depreciation of $8.396m (2013: $8.395m), EPT recorded a loss of ($7.399m) for the year (2013: ($7.214m)). Revenue from the sale of memberships and corporate boxes was slightly ahead of last year, as was venue hire revenue and related food and beverage revenue. Function revenue from non-game day activities fell slightly below the prior year revenue. Interest costs have increased over the year due to an upward movement in interest rates. EPT has taken the precautionary step of hedging $10m of debt through a fixed rate interest swap contract, for a twoyear period. This provides some certainty around future costs of borrowing, while future interest rate rises remain difficult to predict. Other comprehensive income in the year includes the annual revaluation of investment properties. No increase in the stadium land valuation of $19,750,000 (which was revalued up by $750k last year) was made in this financial year. EPT recently completed the extension of its $40m Committed Cash Advance Facility (CCAF) with the ASB Bank, through to 30 November This facility is supported by a guarantee from Auckland Council. We are grateful to both the ASB and the Council for their ongoing support of this facility, which was established to complete the funding of the redevelopment of Eden Park, in EPT s asset base remains strong. The balance sheet at year end indicates net equity of $227million. This has decreased by $7.4m compared to the prior year, due to the depreciation charge of $8.4m for the year. The Trust is carrying approximately $50m of debt following the extensive World Cup redevelopment. The cost of servicing this debt is significant and does not allow sufficient free cash flow to reduce debt or invest in major capital expenditure to continually upgrade the stadium and maintain it 5

6 as a world class facility and asset. This is one of the key issues on which the Trust is focussing in terms of its future structure and governance. With one fewer All Blacks test scheduled for next year and the clean stadium obligations of Cricket World Cup (CWC) in February 2015, the Trust is budgeting a lower operating income and net operating profit next year. The following year both of these items should increase with a greater number of scheduled events. Sponsors The ongoing generous support of sponsors and other key partners is critical to the success of Eden Park. We appreciate and thank our family of sponsors including ASB Bank, Lion Breweries, Panasonic, Pernod Ricard, Philips, Spark and Vector. I would like to particularly thank the ASB Bank for their long term sponsorship and support of Eden Park, which runs to We also greatly appreciate the charitable donations received in the year from Four Winds Foundation, Infinity Foundation, North and South Trust, NZ Community Trust, Southern Trust and Trillian Trust. These contributions are essential to the successful operation of the Park. Memberships During the year we have completed a comprehensive review of the Trust s membership programmes. This has included surveys of current and past members to find out what is important to them and how we can enhance the members experience at the Park. As a result we have a number of new initiatives and members events planned, which are being rolled out for the FY2015 season. We are grateful to the sporting codes for providing support for these new initiatives. We are also working closely with our catering partners to introduce enhancements to food and beverage options. The Trust looks forward to welcoming existing and new members to Eden Park for a range of exciting events in I would like to thank Eden Park s members for their support and contribution to Eden Park. Our suite holders, corporate members and ground members are the foundation of our customer base. Not only are they significant supporters on game days, many are frequent users of the facilities for other events as well. Local Community EPT would like to thank the local community for their ongoing input into Eden Park s operations. EPT s relationship with the local community is managed through regular meetings and communication with the Community Liaison Group. EPT has a strong relationship with the people of Ngati Whatua o Orakei. I would like to thank Ngati Whatua for their ongoing relationship with Eden Park. EPT recently hosted a Christmas barbecue to thank our neighbours for their support during the year. Eden Park s meeting and function rooms have also been made available to a wide range of community groups throughout the year. 6

7 Future of Eden Park To cement and ensure Eden Park s future success, the Trust has lodged submissions to the Proposed Auckland Unitary Plan (PAUP). The submissions cover two important areas for the Park. Firstly, detailed submissions have been prepared covering the operating parameters and consents for events at Eden Park. The objectives are to improve the economics of events for venue hirers and also to allow the Park to host a wider range of events at different times. The second component of the submissions seeks an underlying mixed use zone for the No. 2 field, facing Sandringham Road. This will provide longer term flexibility for the Trust, in the event that Auckland Cricket ever decides to relocate from this area. All of the submissions are designed to provide increased flexibility in operating conditions and help secure the long term viability of the Park, in line with the objects of the Trust Deed. Conclusion I would like to extend my sincere thanks to the staff and the Board for making 2014 another successful year for Eden Park. I am confident that the Eden Park Management and Trustees will continue to constructively work with all of its stakeholders to ensure Eden Park's long term sustainable position and maintain its reputation as New Zealand's premier stadium. John Waller Chairman, The Eden Park Trust 7

8 KEY EVENTS SPORTING FIXTURES A summary of the major fixtures played on the Eden Park no. 1 ground during the year, the results and the estimated attendances are detailed as follows: DATE EVENT RESULT CROWD Rugby Fixtures 2014 International 7 June 2014 (Sat) All Blacks v England All Blacks , August 2014 (Sat) All Blacks v Australia All Blacks ,500 Super Rugby 28 February 2014 (Fri) Blues v Crusaders Blues , March 2014 (Sat) Blues v Cheetahs Blues , March 2014 (Sat) Blues v Highlanders Blues , April 2014 (Fri) Blues v Waratahs Blues ,100 2 May 2014 (Fri) Blues v Reds Blues , May 2014 (Sat) Blues v Hurricanes Blues , July 2014 (Fri) Blues v Chiefs Chiefs ,100 ITM Cup 31 August 2014 (Sun) Auckland v Tasman Draw ,700 6 September 2014 (Sat) Auckland v Wellington Auckland , September 2014 (Sat) Auckland v North Harbour Auckland ,200 2 October 2014 (Thurs) Auckland v Waikato Auckland , October 2014 (Sat) Auckland v Northland Auckland ,900 Other Rugby 20 June 2014 (Fri) 26 July 2014 (Sat) IRB Junior World Championship Finals England v South Africa Auckland Rugby Club Finals University v Grammar TEC England ,600 University ,200 Total Attendance for Rugby Fixtures 242,600 Cricket Fixtures 2013/14 International 26 December 2013 (Thu) Blackcaps v West Indies ODI WI 2 wickets 8, January 2014 (Sat) Blackcaps v West Indies Twenty20 Blackcaps 81 runs 11, January 2014 (Sat) Blackcaps v India ODI Tie Tie 28, February 2014 (Thu Mon) Blackcaps v India Test match Blackcaps 40 runs 32,400 HRV Cup 29 November 2013 (Fri) HRV Aces v Wellington Firebirds Firebirds 6 wickets 4, November 2014 (Sat) HRV Aces v Canterbury Wizards Aces 7 wickets 3,100 3 January 2014 (Fri) HRV Aces v Otago Volts Aces 74 runs 4,900 Total Attendance for Cricket Fixtures 93,000 (Continued on page 9). 8

9 (Continued from page 8) Football Fixtures for 2013/14 Season 1 February 2014 (Sat) Wellington Phoenix v Adelaide Phoenix , July 2014 (Wed) Wellington Phoenix v West Ham United Phoenix ,200 Total Attendance for Football Fixtures 36,900 Rugby League Fixtures for 2014 Season February 2014 (Sat - Sun) Dick Smith NRL Nines Cowboys (Final) , March 2014 (Sat) Warriors v Dragons Dragons , April 2014 (Sun) Warriors v Bulldogs Bulldogs , May 2014 (Sat) Warriors v Raiders Warriors ,000 Total Attendance for Rugby League Fixtures 141,400 Total Attendance for All Fixtures 513,900 FUNCTIONS Eden Park hosts over 1,000 events and functions annually, ranging from small business meetings to school balls, conferences, AGMs, gala dinners, award ceremonies, business exhibitions, sports related events, weddings and other private functions. Eden Park has high quality function spaces, excellent catering and technical support on site, together with the unique nature of the stadium itself, available all year round. 9

10 FINANCIAL STATEMENTS The audited financial statements for The Eden Park Trust for the twelve months ended 31 October 2014 are presented on pages 11 to 35. NRL Nines, February

11 DIRECTORY OF BOARD MEMBERS Eden Park Trust Board Members Mr John Waller (Chairman) Ms Michelle Boag Mr Doug McKay Mr Morris Pita Mr Grant Carruthers Mr Ken Baguley Mr Rex Smith Mr Paul Lucas Appointed By New Zealand Government New Zealand Government New Zealand Government New Zealand Government Auckland Rugby Football Union Auckland Rugby Football Union Auckland Cricket Association Auckland Cricket Association Finance and Audit Committee Mr Morris C Pita (Chairman) Mr Ken Baguley Mr Paul Lucas BOARD MEMBER BIOGRAPHIES John Waller John Waller is Chairman of The Eden Park Trust. He was originally appointed in 2007 to the Eden Park Redevelopment Board to oversee the redevelopment project for Rugby World Cup Mr Waller is Chairman of the Bank of New Zealand and an independent director of a number of large companies, including Fonterra Co-operative Group, National Australia Bank and Sky Television Network. Ken Baguley Ken Baguley is a qualified Chartered Accountant with 40 years experience in Chartered Accountancy, specialising in IT services. Ken was elected a Life Member of the Auckland Rugby Union in December 2014 and was Chairman of Auckland Rugby from 2001 to He was an Auckland City Councillor and Chairman of Transport Committee from 2007 to He is currently an Orakei Local Board Member Auckland Council. He is also a Life Trustee of The Halberg Trust and is a Trustee of the Auckland Rescue Helicopter Trust. Ken holds RMA Making Good Decisions certification, valid until June Michelle Boag Michelle Boag has 30 years experience in government, consultancy and corporate public relations and is currently a principal of Boag Allan SvG, a Strategic Communications Consultancy. She has an extensive background in the not-for-profit sector, including as a current Trustee of the Auckland Rescue Helicopter Trust and as a former President of Variety Club New Zealand. She has previously served on the boards of the Auckland Cricket Association, Manu Samoa Rugby Limited, the Mt Smart Advisory Board, Television New Zealand and the Auckland Surf Lifesaving Association. 39

12 Grant Carruthers Grant Carruthers has been self employed as a company director since 2005 and is currently a director of a number of private companies. He was previously employed in the forest industry for many years, both within his own company and in senior roles with major companies, Carter Holt Harvey and NZ Forest Products. He was also a Director of Auckland Rugby from 2001 to 2012 and was previously on the Eden Park Board of Control. Paul Lucas From an initial accounting background, Paul Lucas has accumulated in excess of 35 years business experience. He was the founder of the EDL Group of Companies, comprising a branch network throughout Australia and NZ. Having sold the businesses, Mr Lucas has for the last nine years been a company director, business consultant and investor in a range of private companies. Mr Lucas has previously served on the board of the Auckland Cricket Association, and in 2008 was coopted back to the board, serving as Deputy Chairman and a member of the finance committee until standing down from the ACA board in Doug McKay Doug McKay brings considerable commercial experience to the board with previous roles as either CEO or Managing Director at Procter and Gamble, Lion Nathan, Carter Holt Harvey, Goodman Fielder, Sealord and was the inaugural CEO of Auckland Council. He is now a full time professional director on the boards of Chartered Accountants Australia and New Zealand, Bank of New Zealand, IAG Insurance, Genesis Energy, Ryman Healthcare, and is a member of the Institute of Directors in New Zealand. Morris Pita Morris Pita has worked in New Zealand and in the United Kingdom in a range of commercial, strategic and project management roles for Mighty River Power, BG Group and Ernst & Young. Mr Pita has an MBA from the University of Oxford, in addition to a Master of Laws and a Bachelor of Arts from the University of Auckland. He operates a boutique consultancy business, Shea Pita & Associates, advising organisations working in Maori economic development, particularly in the energy sector. He is also a member of the Auckland and Waitemata District Health Boards. Rex Smith Rex Smith has more than 40 years experience in property negotiation specialising in the central and local government sectors. He currently operates his own property consultancy business. Mr Smith holds a post graduate degree in Political Studies from the University of Auckland. A former member of the Eden Park Board of Control, he is the current Chairman of the Auckland Cricket Association. SENIOR EXECUTIVES Senior executives of the Trust are: David Kennedy (Chief Executive Officer) Steve Donaghy (General Manager, Operations and Infrastructure) Adrienne Bonell (General Manager, Sales and Marketing) Brett Winstanley (Chief Financial Officer) 40