The American Club 2023/2024 Annual Report

PAGE 39

In the face of ongoing global supply chain and inflationary pressures, Management has prioritized payroll management and stringent cost control measures 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 to manage price volatility; 5) Vigorous headcount and payroll management measures; 6) Talent acquisitions to support new F&B programming and service offerings; 7) Stringent contract renewal reviews with minimal price adjustments; 8) Regular cost management review to allow immediate response to cost escalation.

These efforts helped the Club to achieve an underlying a Gross Operating Profit (GOP) before utility costs of $0.12 million in FY2024.

To augment the lack of manpower across the Club, we explored alternative labor sources by bringing in casual labor to supplement the manpower shortage, specifically at food & beverage outlets. Management also commissioned a salary benchmarking exercise to ensure that we offer competitive salaries to retain Team Members and to attract new talent. This resulted in an increase in payroll costs by 10% over last fiscal year. In August 2024, the General Committee approved an aggregate bonus of $1.8 million, payable to all eligible Team Members of all levels, resulting in a GOP Loss after bonuses of $3.77 million, compared to a loss of $3.06 million in FY2023.

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

S$’000

FY2024

FY2023

Operating cash flow Gross Operating (Loss) after bonuses

(3,771) 6,402

(3,064)

Entrance fees - new joiners

6,573

Entrance fees - Non-transferrable Associate promotion

1,601

925

Capex Others

(2,871) (1,465)

(1,346) (1,538)

Total cash flow

(103)

1,550

Club reserves Cash Fixed deposits

3,838

3,983

15,000 15,320 34,158

14,000 13,910 31,893

Investments

Total club reserves

Entrance fee income from new joiners grew by 7%. After offsetting a CAPEX spend of S$2.87 million and operating loss of $3.77 million, the membership entrance fee generated an underlying cash flow of -$0.1 million for FY2024. This helped the Club improve its Total Reserves to $34.16 million at the end of FY2024 – a very healthy position this early in the building development cycle.

THE AMERICAN CLUB SINGAPORE ANNUAL REPORT 2023 / 2024