Today is an opportune time to give a “longer view” and more comprehensive update, together with the decisions from recent MC meetings. Opportune for 2 reasons:
- This week marked the second anniversary of our AGM following the first difficult Covid period (November 2020)
- We now have visibility into approximately where we will land as a Club (Members, spend) by the end of 2022, and are able to begin prioritising for 2023. Hence the fact-base that allowed us to take some decisions at this week’s MC (of which more below).
This note is therefore a little longer than usual, but I hope is short enough and comprehensive enough to give transparency into all the good things that are happening.
First, a little history. In the run-up to 2022, the Club faced a set of pressures, including the need for a substantial Clubhouse renovation (over €1 million spent to comply with asbestos rules, access, rules, etc.) and then with the impact of Covid on membership and events revenues. If we think of “paradise” for the Club as being:
- No debt
- No “off-balance sheet” liabilities, such as labour litigation
- No urgent deferred maintenance
- Enough cash in the bank to run the day-to-day
… then the Club was about €1.35 million “away from paradise” in November 2020. Moreover, this number was growing every day we lost Members in August/September 2020. We, therefore, had a deep and growing hole.
Actions taken since November 2020 have been around maintaining and strengthening everything that is so wonderful about our Club …
- History
- Incredible setting
- Paris’s only truly international Club
- Inform, “shared second home”
… while stopping digging the hole and indeed filling it in as fast as possible. Moreover, this “hole” would have been far larger but for the cost reduction actions taken by Roger Porsolt and the MC at the beginning of the lockdown.
So what has been achieved, and what remains to be done. The €1.35 million hole is now just over half that size (€750K). In essence, the Club has been reconfigured to attract more Members, and to target our spending on addressing “the hole”. For the finance folks among us, we have been generating “Free Cash Flow From Operations” (an average of around €300K a year) and using it to pay off the old debts (bank, and others), and to complete the “deferred maintenance” in the Club. The results to date:
- Mortgage debt is down from €1 million to €700K. These will all be paid off by 2027
- 2 out of 3 labour issues have been definitively settled, with very low remaining risk for the Club
- The Club has invested in an unprecedented way (over €250K) in our facilities (Clubhouse interior renovation, Courts 3, 1 and 2, with 4 and 5 scheduled for this winter, new ground care equipment, over 20 skips of debris removed from our grounds, new balcony blind, new pool heating system, old (cricket) pavilion exterior renovation, meeting legacy compliance issues, electrical work, etc.
- While less visible, our volunteer team has also led the deployment of a new software system, which will progressively give us all a better experience as Members, and Management the visibility we need to manage. We realise some of this change has been painful. As they say, “no pain, no gain”.
So what is next:
- Membership is up on 2020, though still not quite where we want or hoped to be. We expect to be 800 Members at the end of this year, versus 745 in 2020. Bringing in another 200 Members remains the priority
- Looking out a couple of years we aim for 1000 Members, the debts repaid, and all our facilities fixed. As we get nearer to completing addressing the challenges from 2020, the Club will move resources to give us all more services. The money that was used for a “once in 40-year” rebuild of Courts 1 and 2 this year can in the future give us more bar staff, for example.
- Based on the numbers for 2023, we will generate over €250K Free Cash Flow from operations in 2023. So the €750K “hole” will be reduced to under €500K a year from now, and well on the way to being gone. We will see that in a couple of ways
- We continue to pay down the debt from the 2015 renovation works, and the government Covid loan. We are paying these debts down at the rate of around €15K a month at the moment. In May, this will drop to around €11K as one of the mortgages is paid off. “Peak debt repayment” is almost done, freeing up €4K a month for other things.
- We will invest the rest, and some of our cash cushion, in the Club
- Courts 4 and 5 will be completely excavated and rebuilt in January-March 2023 (€47K)
- We have engaged a project management company, for a management fee of €7K, to plan the next phase of our €150-200K pool renovation
- And, at this Tuesday’s MC, we approved a further set of investments in the Club for this year
- €16K for the total renovation of the Children’s Playground (new major climbing frame, new sandpit, removal of structures past their best, repair of others (new wood, etc.)
- €7K for individual regulators on our 20+ radiators. We expect this investment to pay for itself within 1-2 years via lower energy bills
- €5K to repair the downspout and roof issues which are affecting the squash courts
There are, of course, additional needs to be addressed … and they will be.
- Upgrading our 1960s pool for the 2020s and beyond (see above)
- The access road to the Club, in cooperation with the ONF and the Mairie – as the numbers for 2023 come in we hope to be able to address this
- Renovation of the basketball court
- Court 6
Thanks for your loyalty to the Club. On an individual level, as President, may I also take this opportunity to express my thanks to the elected Management Committees since 2020 (Emile, Gerald, Raphael, Roland T, Georgina, Roxane, Tarja, Gigi, Didrik, Vincent, Victor, Roland D) who have done so much, the other volunteers (particularly Astrid, Andrew J (our carpenter supreme), the entire Clubhouse renovation team (James and Naomi M, Dee Dee, James S, David F, Francois |G) , Elisabeth, David S, Philippe A-J, Caroline R, the Sections Heads, …) and our staff, without whom none of the above would have been possible.
Rich, for the Management Team