Where do we get our income from?
Our total statutory income in 2023 was £34.5m, which included: subscription income of £15.5m; gross income from our trading businesses (essentially Food & Beverage, which includes that from both member and non-member events, and Sports) of £12.2m; and exceptional entrance fees (from Off-Peak conversions) of £5.6m.

However, our statutory Profit and Loss can be a little confusing to decipher, so I think it may be easier to consider our underlying, pre-exceptional income as coming from three main sources:

• Subscription income;
• Regular entrance fees; and
• The net contribution from our trading businesses (F&B and Sports).

On this basis our underlying income in 2023 was £18.1m, split as follows:

In addition, because of our currently substantial cash and investments position, last year we benefited from investment income and gains of £1m.

Very clear, thank you – and how was that spent in 2023?
Operational expenditure including depreciation was £18m. So, we generated a small operating surplus on a pre-exceptional basis.

Staff costs formed the largest category of operating spend at £9.2m (51%), followed by utilities (£1.5m) and buildings maintenance (£1m).

A full breakdown is below:

So, staff costs are clearly very important. How many staff do we employ and what are their functions?
Yes indeed – our Executive team is clearly alert to this, and both the number of staff and overall compensation costs are central to the annual budgeting process.

Excluding F&B staff of around 85, our average number of full-time equivalent employees in 2023
was 153. They can be categorised by role as follows:

You mentioned depreciation. Does our expenditure look very different on a cashflow basis?
The main difference is capital expenditure, which was £4.8m in 2023 compared to £2.8m of depreciation. Our spend in 2023 included £2.4m on Estates projects including the Heritage rooms, flood defences and works to the Clubhouse.

Whilst ‘regular’ capital expenditure should normalise down toward the level of depreciation, clearly there are very significant amounts attached to the Masterplan for the next few years.

How are we going to pay for the Masterplan? Are subscriptions going to go up?
We ended 2023 with £18.8m in cash and investments, which puts us in a strong position. These funds will comfortably cover the nearer-term projects such as the East Wing, the Broomhouse Gate redevelopment and the cricket pavilion.

Further phases for the Masterplan are under more detailed development now, and close attention is being paid to potential costings – and the implications for our longer-term financing position.

Under Club rules, subscriptions can increase by up to RPI – which looks set to be considerably less in 2024 than in recent years. We have begun to consider alternatives and additions to this, not because of the Masterplan, but because our subscription fees at current levels do not cover our everyday costs. Options may include some combination of higher subscriptions, reducing costs (potentially impacting services to members) and/or a modest increase in the number of new members. Nothing has been decided, and any proposed changes will be carefully reviewed by Main, before seeking any necessary approvals by the Membership.

CHRIS NICHOLLS, CHAIR, FINANCE