The American Club 2022/2023 Annual Report

PAGE 38

While disruptions in the global supply chain and inflationary pressure pushed operating cost higher, Management took various steps to manage cost, with encouraging results:

1) Alternative source of supplies to better manage price increases; 2) Tender exercises to ensure competitive prices and cost stability; 3) Consolidation of vendors to derive economies of scale; 4) Fixed 12 months’ contract for energy supply; 5) Vigorous headcount and payroll management measures; 6) Stringent contract renewal reviews with minimal price adjustments; 7) More regular cost management review to allow immediate response to cost escalation.

These efforts helped the Club to achieve an underlying Gross Operating Profit (GOP) before utility costs of $1.64 million in FY2023.

Amid manpower shortages across the service industry, the Club faced tremendous challenges in the hiring of service staff to support our operations across all areas of the Club. We explored alternative labor sources by bringing in casual labor to supplement the manpower shortage at food & beverage outlets. In August 2023, the General Committee approved an aggregate bonus of $2.0 million, payable to all eligible Team Members of all levels, resulting in a GOP Loss after bonuses of $3.06 million, compared to a loss of $0.73 million in FY2022.

The underlying cash flow (net of working capital movements) are as follows:

S$’000

FY2023

FY2022

Operating cash flow Gross Operating Loss after bonuses

(3,064)

(731) 5,746 1,699

Entrance fees - New joiners

6,573

Entrance fees - Non-transferrable Associate promotion

925

Capex Others

(1,346) (1,538)

(1,643) (1,915)

Total cash flow

1,550

3,156

Club reserves Cash Fixed deposits

3,983

5,456

14,000 13,910 31,893

12,000 13,228 30,685

Investments

Total club reserves

Entrance fee income from new joiners grew by 14%. After offsetting a capex spend of S$1.35 million and operating loss of $3.06 million, the membership entrance fee generated an underlying cash flow of $1.55 million for FY2023. This helped the Club improve its Total Reserves to $31.89 million at the end of FY2023 – a very healthy position this early in the building development cycle.

THE AMERICAN CLUB SINGAPORE ANNUAL REPORT 2022 / 2023