Dawson upbeat about merger challenge

DRIVEN: Chief executive Gary Dawson aims to make Bay Leisure and Events sustainable.

Six months into his new job, Bay Leisure and Events Ltd CEO Gary Dawson is optimistic about the eventual outcome of the challenging merger of Tauranga's key leisure assets, several of which run at a loss or barely break even.

He is forecasting that BLEL will increase operational revenues by 10.5 per cent to around $14.87 million, which with total operating expenditures of $14.61 million, will leave a net operating profit of around $260,000 for the next financial year, which starts in July.

BLEL was formed from the merger last July of the loss-making TCC-controlled Tauranga City Aquatics Ltd and Tauranga City Venues Ltd, as well as several TCC sports and community facilities.

The new entity manages some $150 million of assets throughout Tauranga, including the aquatic facilities, indoor sports facilities, ASB Arena, community halls and centres and the Baypark Stadium.

"We've got a lot to do," said Mr Dawson. "The aim is for us to be sustainable and be more self-reliant and not rely so much on the ratepayer. The TCC grant of around $2.4 million is to pay for the community-based activities, which we have to carry out as part of the service level agreement, so it's not just a straight grant." Mr Dawson said no increase would be needed in the TCC grant for the coming financial year.

Mr Dawson noted that BLEL managed 22 facilities with 250 staff and had some 1.4m people coming through its facilities each year.

The key priorities post-merger had been amalgamating basic information management systems, IT and human resources process for the core organisations, and developing a strategic plan for the next three to four years, he said.

"That's been a major piece of work, then dropping out of that, the business plan for the next year as well, which prioritises all the things we've got to get done," Mr Dawson said.

"Because we've amalgamated, we're looking all the time for efficiencies and where we can streamline the business. And overriding all of that, is looking to see where we can add value to our customers, whether it's for TCC or our ratepayers who come and use the facilities, or corporates or whatever."

In its presentation to the TCC last week, BLEL stressed that revenue growth would be driven by commercial initiatives, predicting that the catering business run out of the ASB Arena would contribute 53 per cent to the estimated increase in revenues, with the speedway, technical services, stadium and aquatics to deliver the balance. BLEL is forecasting savings from reductions and efficiencies of $730,000.

Mr Dawson said that part of the ongoing discussion with TCC was about how the assets for the merged entity would ultimately be held. Currently BLEL manages the various assets of the merged entity, but they remain on the TCC's balance sheet.

"Do they come onto our balance sheet or do they remain on TCC's? That's a piece of work that needs to be done in the future as well."

BLEL sees its core activities as being venue ownership and management, and operation of venue-based businesses, programmes and services, with a secondary focus of securing, hosting and operating events in its venues.

"With programmes and services, they're not necessarily profit-focused, but we're there to deliver value and make sure we're at least at a break even," said Mr Dawson. "Whereas the commercial part of the business is very much about the bottom line, but also about delivering value to Tauranga."

He cited the recent V8 Jetsprints racing, which saw the speedway track dug up to create a new flood water course, as an example of BLEL venues' commercial potential. "If you promote it correctly, present the right product, get a good crowd, then you get a good return," he said. "It's also great for the city and a whole bunch of other things."

Mr Dawson said that it was the first time in the world that a stadium had been dug up and flooded for a jet sprints event. "It's part of us being innovative and a bit unique," he said.