Club could merge or sell land

Club Umina could amalgamate with another registered club or may sell part of its land if possibilities being pursued by its administrator come to fruition.

The Umina Beach Bowling Club Ltd (Club Umina) was recently placed under administration following a period of poor trading.

Club president Mr Ken Harrison said that the administrator currently favours amalgamation with another club and is exploring all avenues.

The current problem originated with the major renovations undertaken by the club in 2000, he said.

"They cost $3.1 million for construction and a further $1.5 million in fit-out, extra parking and related costs," Mr Harrison said.

At the time, the club was earning a profit of $400,000 each year and because it was badly in need of renovation, the decision was made to proceed with the renovation.

"It was a reasonable expectation that their income was sufficient to service the debt and that the new-look club would continue to increase its annual profits, further decreasing any risk to the club.

"Unfortunately, other factors came into play such as severe noise restrictions, changed drink driving habits, less disposable income available to Umina Beach caravan park residents, competition from other clubs and generally less support of the club by members and their guests.

"This resulted in a profit of only $70,000 in 2003 and a loss of $285,000 in 2004."

Mr Harrison and his new committee took over in September last year with an overdraft of $300,000 which they managed to reduce to $200,000.

However, they were unable to meet the six-monthly commitment to the bank of $120,000, which resulted eventually in the club being placed under administration.

The administrator is not looking to liquidate but is investigating selling off part of the club's land, either as is or developed.

This is however fraught with difficulties as the land would need to be rezoned from its present private recreation zoning and to be separated from its present title.

Doing all of this and then developing the land is unlikely to be a sufficiently quick solution.

In the meantime the administrator's costs would be rising, further exacerbating the club's financial situation.

The administrator's preferred solution is to amalgamate with another club.

Club Umina owns its own land and could therefore be an asset to another club if it can run profitably.

One Peninsula club has shown an interest in this proposal.

The next step is for the administrator to advertise for expressions of interest from other clubs and then to put the outcome to a meeting of members.

"The club has approximately 4000 members and even support from them at an average of $50 each could save the day, giving the club some time to arrange revenue raising activities and renewing earlier member support," Mr Harrison said.

Cec Bucello, April 15