Dunedin's Forsyth Barr Stadium. Photo / Otago Daily Times
The company running Dunedin's Forsyth Barr Stadium is poised to deliver its first profit on the back of tighter finances and a cash injection from ratepayers.
Dunedin Venues Management Ltd is forecasting a profit of $395,000 for 2015 16, rising to $440,000 and $500,000 in the following two years.
Dunedin Venues Management Ltd chief executive Terry Davies says he hopes, in time, to increase the surpluses to $600,000 a year.
The profits would help build up a cash reserve to reinvest in DVML's venues, including the stadium, and attract more events.
That would help expand the business and eventually allow the company to start paying a dividend to the Dunedin City Council, he told the Otago Daily Times.
It would also allow DVML to keep delivering on its core aim - attracting events that brought with them economic benefits for the city.
''We want to build up some cash so we can continue to reinvest in the business and deliver great events for the city.
''We're all about delivering economic benefits.''
The predictions of profit were outlined in DVML's latest statement of intent, outlining its financial forecasts for the next three years, which will be considered at today's full council meeting.
The forecasts are a dramatic turnaround from last year, when the company was anticipating losses totalling $3.34 million over the following three years.
The results reflected the anticipated impact of the council's stadium review, which recommended a raft of changes to stadium finances designed to help DVML turn annual losses into profits.
That included halving DVML's annual rent, paid to help service stadium debts, to $2 million, and transferring another $30 million of stadium debt to the council's books, and funding for future stadium renewals.
Together the changes would raise the ratepayers' stadium bill by $1.81 million a year, to $11.65 million a year.
The review is due to receive final sign off with the rest of the council's long term plan at today's meeting.
Mr Davies said the changes reflected the need to ensure DVML operated under a ''realistic business model'' without putting its hand out for council top ups in future.
''[DVML] can build up some cash and reinvest back in its business so it can continue to grow and continue to deliver.
''The stadium review ... has given DVML a chance to operate in a commercial way. It gives us a chance.''
The forecasts also reflected a better understanding of the business, and tighter control of staffing and budgets, he said.
Since Mr Davies' appointment, a lot of time had been spent overhauling DVML's staffing, reviewing its operations and business units, and encouraging staff to take ownership of budgets and results, he said.
There was also a greater focus on chasing new business and a commitment to making money, he said.
''They're real commitments. That's really what's underpinning how we're moving forward - and that's reflecting in the numbers.''
Recent successes in securing headline concerts were also reflected in the forecasts, he said.
But there remained uncertainty, as the number of big concerts could never be guaranteed a year out, and the international rugby programme was yet to be confirmed for next season.
DVML was facing other risks, too, as negotiations with the Otago Rugby Football Union and Highlanders were continuing over new venue hire agreements at the stadium, he said.
The majority of stadium memberships and sponsorships were also set to expire next year, and would have to be renewed, but Mr Davies remained confident the challenges could be addressed.
''We're confident with our relationships with rugby, so there's no reason for us to be concerned about that.
''There's always risk around member renewals ... but we're going to do a lot of work over the next 12 months to endeavour to cement a roll over of a lot of those memberships.''