Outline Business Plan

Transcription

Outline Business Plan
Outline Business Plan
Introduction
Hastings Pier was closed in 2006. Subsequent local campaigning for its re-opening led to the
conclusion that the only viable option was for Hastings Borough Council to purchase the Grade II
Listed Pier from its offshore owner through a compulsory purchase order (CPO) and then to transfer
ownership to a Charity that could restore and run the Pier for the benefit of the People of Hastings
and St Leonards and the wider community.
The community’s efforts to save the Pier were disrupted by the major fire in 2010 that destroyed
virtually all of the Pier’s superstructure. Nonetheless a development plan was put forward to the
Heritage Lottery Fund who grant-funded the project feasibility work in 2011.
Hastings Pier Charity (HPC) was set up in 2011 as the organisation to take ownership of the Pier, to
drive its restoration and manage its future through a sound commercial plan.
The Organisation
HPC is shortly to convert to a Community Benefit Society (Bencom) with exempt charity status. This
Charity will hold the freehold ownership of the Pier and will retain a statutory asset lock that will
protect the ownership of the Pier for the benefit of the community over the long term.
The Bencom has been created to ensure the development of an active membership committed to
continuing the charitable aims of HPC. The rules state that the purpose of the Charity is the
preservation, protection, restoration and improvement of buildings and structures of historic or
architectural merit for the public benefit in the White Rock area of Hastings and in particular
Hastings Pier.
In line with these objectives, the Charity will have direct responsibility to the Heritage Lottery Fund,
which is providing £11.4m of the funding needed, for the £14m project to restore the Pier. HPC
currently has 8 Trustees including the Chair and employs 7 full time staff. The chart at appendix one
illustrates the structure of the organisation for the two year project delivery phase.
The Charity has two wholly owned subsidiaries that are intended to support commercial activities
once the restoration project has been delivered. The first is the Pier Works Company Limited which
will be used to supply our proven restoration expertise to other interested parties. There is no
income assumed from this activity in the current business plan forecast.
The second subsidiary is the People’s Pier (Hastings) Limited which will be responsible to the Charity
for the commercial operations on the Pier. The planned structure of the organisation in its
operational phase is shown at appendix two.
Development Activity
There are two proposed phases for the regeneration of the Pier and this Business Plan assumes only
the first phase is delivered.
The scope of the £14m project is primarily determined by the need to address 30 years of neglect.
The substructure restoration will include the replacement of corroded metal trusses and beams,
missing bracing, damaged columns and missing deck sections. There will also be a new steel
structure put in to support the Visitor Centre building above. It is proposed to retain and repair the
Edwardian balustrade at the Parade Extension, but the remainder will be replaced with a new
contemporary design.
The Western Pavilion is the only building to survive the 2010 fire and this will be restored and
extended to create a profitable restaurant and bar facility which will also provide structured training
opportunities and a good quality offer utilising local, ethically produced ingredients.
The Charity will develop the new visitor centre - a 450m2, two-storey building in the centre of the
Pier. This will provide flexible spaces for education, events and heritage interpretation which will
include a digital archive celebrating the significant history of the Pier. It will also include a second
café area, some retail space and toilet facilities. The roof terrace will give views to the sea and back
to Hastings and St Leonards.
This diagram shows the timeline for the restoration and the phase one development work.
Business Plan
The following grant agreements and loan facilities have been secured to fund the capital works and
to support the project cashflow:
Heritage Lottery Fund Grant
Coastal Communities Grant
Hastings Borough Council Grant
COMA Grant via Social Investment Business
Community Builders
AHF Loan
CAF Venturesome Loan
As part of the development process the HPC has recruited a specialist professional team including
dRMM Architects, Ramboll Structural Engineers and PT Projects Quantity Surveyors. This team
designed and costed the restoration scheme which was then thoroughly appraised by the Heritage
Lottery Fund as part of their process for assessing major capital funding applications. The spending
of this capital grant will be monitored by both the professional team and the Heritage Lottery Fund.
The Charity has also employed specialist leisure consultants, Leisure Development Partners (LDP), to
develop the commercial operation of the business. Their research for the project has been far
reaching and goes beyond Piers to look at successful visitor and education centres, music festivals,
outdoor cinema events, fishing and diving activities. They have identified examples of destinations
which have created a high profile through a strong strategic vision.
LDP has used established leisure industry methodology to estimate resident and tourist market sizes.
They have reviewed the current market context in terms of competition and potential uses including
food and beverage, together with a review of comparable Pier case studies.
On completion of the HLF-sponsored project the Charity will operate the Pier for use as a public
amenity, leisure and events venue. The restaurant and visitor centre will also be a focus for training,
education and learning, volunteering and community use.
The HLF-sponsored project provides the funding for only the initial development work and the
Charity will operate the Pier as a start-up enterprise. It is therefore critical for the Charity to secure
financial resilience through additional capital investment.
The underlying basis of the business plan is that the Pier should attract 325,000 visitors annually,
each spending an average of £4 on the Pier. The current assumption is that 68% of revenues will
come from food and beverage sales, 17% from entertainment and events income and 15% from
other visitor centre operations such as venue hire and merchandise sales.
The capital resulting from the sale of Community Shares will be used for three distinct purposes: To
provide the last component of the £14m capital project funding, to support additional development
work that will enhance the Pier’s commercial performance and to provide additional working capital
to the business.
To that end, once £200,000 has been raised as the final element of the capital project funding, the
goal is to raise an additional £300,000 the majority of which will be invested in further revenue
generating opportunities to build financial resilience.
The following options are being considered for investment:
Merchandising Operation – The current business plan assumes total annual revenues from
memorabilia to be approximately £15,000 which represents a visitor spend per head of just less than
5 pence. With a well designed and executed product range we could substantially improve this
performance and so we are planning an investment of circa £75,000 towards merchandise
development and execution. This could potentially improve forecast annual revenues by at least a
factor of 5.
Food and Beverage - Our consultants have identified a potential 15% improvement in food and
beverage revenues if we create a substantial unique selling point around the offer, including a
proposed Microbrewery. We have allocated approximately £50,000 to this investment option.
Children’s Play Area – Our research suggests that a children’s play area would be a significant
attraction for families. This would drive repeat visitation and increased length of stay on the Pier,
helping to unlock our potential 15% improvement in revenue performance. We could potentially
invest in the region of £100,000 in a well-designed and attractive range of features.
Deckchair Rental – The current business plan assumes that this service is supplied by an outside
operator. This returns minimal revenue to us and brings no added value. In keeping with our
strategy to make the Pier a destination and increase the length of stay by visitors we would invest
around £20,000 in the development and production of a bespoke product which could then be
operated in house.
The Charity would also retain a certain amount of the share issue proceeds as additional working
capital to assist with cashflow and the management of the business.
In the development of any business there are risks that things will not go according to plan. There
are clearly risks associated with both the capital development phase and the operational phase but
as mentioned earlier both have been developed, and contingencies allowed for, by experienced
professionals with relevant experience, assessed thoroughly by outside investors and will be
managed by an experienced staff team.
The following cashflows assume the Charity has raised only the minimum £200,000 towards the
capital project through the share issue and do not include the increased revenues generated by the
additional investment described above.
The first cashflow illustrates the overall income and expenditure for the project over the next 5 years
detailing the capital grant income and the corresponding expenditure on the Pier restoration and
redevelopment. It includes the operating surplus which is generated from year 3 onwards.
The second cashflow illustrates the anticipated operating income and expenditure of the business
which is derived from the commercial activity of the Pier. This generates the operating surplus
figures that appear from year 3 in the first cashflow.
CASHFLOW FORECAST
Hastings Pier Charity
5 Year Project Cashflow
2013/14
OPENING BALANCE
2014/15
2015/16
2016/17
2017/18
5,000
365,294
100,517
168,980
170,680
1,841,394
373,000
250,000
60,000
497,500
0
200,000
0
0
3,221,894
8,899,157
373,000
0
240,000
0
100,000
362,551
0
0
0
0
0
151,611
0
0
0
0
0
155,711
0
0
0
0
0
400,000
0
10,012,157
0
0
362,551
0
0
151,611
0
0
155,711
2,936,600
10,236,772
22,500
67,662
10,326,934
330,324
0
115,992
446,316
184,892
0
115,992
300,884
189,892
0
115,998
305,890
285,294
-314,777
-83,765
-149,273
-150,179
Income (revenue)
Operating surplus from year 3
Unrestricted Income*
Total Revenue Income
0
75,000
75,000
0
50,000
50,000
77,228
75,000
152,228
85,973
65,000
150,973
78,974
55,000
133,974
Operating Surplus/Deficit
75,000
50,000
152,228
150,973
133,974
365,294
100,517
168,980
170,680
154,475
Capital Project - Income
HLF capital grant
Coastal Communities Grant
Hastings BC Grant
East Sussex Invest Grant (ESCC)
COMA Grant
Community Builders Grant
Community Shares Investment (min)
Community Builders/AHF Loan
AHF/Venturesome Bridging Loan
Total Income
Capital Project - Expenditure
Expenditure (capital)
Interest on AHF/Venturesome loan
Community Builders /AHF repayment
Total Expenditure
Surplus/(deficit)
BALANCE CARRIED FORWARD
*
2,936,600
0
This income is generated from charitable fund raising, building on our existing track record in
three areas:
o
o
o
Small and medium-sized grant funding (grants from organisations such as The
Pilgrim Trust and The Architectural Heritage Fund have already raised over £45,000
in the current financial year)
A variety of fund raising events (The comedy night headlined by Jo Brand raised
over £21,000)
Structured and marketed options for participation (‘Adopt A Plank’ has raised nearly
£20,000 to date)
CASHFLOW - Hastings Pier Charity
Operational Activities
2013/14
2014/15
2015/16
2016/17
2017/18
OPENING BALANCE
0
0
0
77,228
163,201
Income (revenue)
Entertainments and Events
Visitor Centre Revenues
Café/Restaurant Revenues
Other income
Project income
0
0
0
0
0
0
0
0
0
0
202,692
366,933
624,537
38,874
141,685
209,879
382,965
655,803
39,846
151,611
215,954
399,377
689,003
40,842
155,711
TOTAL INCOME
0
0
1,374,721
1,440,104
1,500,887
0
0
0
0
0
0
0
0
0
0
78,285
205,987
65,020
680,273
0
82,248
216,415
66,864
699,620
0
86,412
227,371
68,761
719,435
0
0
0
0
0
0
0
0
0
267,928
0
0
0
288,984
0
0
0
304,934
15,000
0
0
TOTAL EXPENDITURE
0
0
1,297,493
1,354,131
1,421,913
Operating Surplus/Deficit
0
0
77,228
85,973
78,974
BALANCE CARRIED FORWARD
0
0
77,228
163,201
242,175
Expenditure (revenue)
Visitor centre cost of sales
Café/Restaurant cost of sales
Retail cost of sales
Operating costs
Delete row
Contribution to fixed costs/loan
repayment
Distribution to share holders
Corporation Tax
VAT
APPENDIX ONE
Hastings Pier Charity
(Bencom)
Board (Founder
Members)
Sub-Committees:
Finance
Chair
Project
Fundraising & Community
Engagement
CEO
Financial
Controller
Education &
Learning
Manager
Activity
Partners
Education &
Volunteer
Organiser
Construction
Project
Manager
Project
Engineer
Contracts
Administrator
Volunteers
Hastings Pier Charity – Organisation Chart Project Phase
APPENDIX TWO
Hastings Pier Charity
(Bencom)
Board (Founder
Members)
Chair
CEO
Financial
Controller
External
Services
Providers
Admin &
Marketing
Assistant
Volunteers
Events
Manager
Security
Staff x 2
Cleaning
Staff x 2
Chief
Engineer
Visitor
Centre
Staff
Engineers
x2
Learning
&
Education
Manager
Education &
Volunteer
Organiser
Apprentices
Volunteers
Hastings Pier Charity – Organisation Chart Operational Phase
Restaurant
Manager
Activity
Partners
Staff x
12