Stadium took on some extra debt (settlor loans) during Covid years when cashflow dried up. Looks like they will take on some extra (bank of approx $5.5M) debt to pay for upcoming sesmic work. But forecast to have that extra debt repaid by 2028?? Though the extra commercial bank lending is only short term, to be replaced by more settlor lending??
In the linked report below there is Balance Sheet for any numbers tragics.
The settlor loans are I think with the two Councils (Regional & WCC).
The commercial lending back at construction was $33M with ANZ. It's now down to $500K
Note the important last 2 paragraphs below.
......limited capacity to make material improvements that would provide for a better client and patron experience.
https://www.gw.govt.nz/assets/Documents/2024/08/Wellington-Regional-Stadium-Trust-Statement-of-Trustees-Intent-2024-25.pdf
Financial Projections
The Trust Deed requires the Trust to be financially autonomous. This requires the generation of sufficient profits to meet loan repayments and provide funds for the capital replacement and development programmes that are necessary to enable the Trust to meet its obligation to maintain a high-quality asset.
Financial autotomy is no longer achievable for the Trust given the Stadium is now an ageing facility, compounded by the additional requirements of seismic resilience works and the impact of the Covid19 pandemic. The Trust still expects to generate positive operating cash flows in most years. It can cover a level of insurance and regular maintenance, but not substantial capex items, such as seismic resilience works or significant capital improvements.
Therefore, continuing to fully invest in the Stadium so that that it operates to best practice as an operationally efficient, safe, and welcoming venue for patrons and hirers, is beyond the means of the Trust alone. The Trust appreciates the financial support it has received from the settlors, and as noted elsewhere in this document, will engage with the settlors on the future operating model of the Trust, including funding options for ongoing capex.
The 5 year projections included here have been prepared on a business-as-usual basis, with 40 plus event days assumed per year.
Over the five-year period, the key inflows and outflows are as follows:
• Net operating cashflows $12.7m (positive, before insurance and grant income) • Cumulative insurance premia absorb $6.0m
• Capex of $36.3m
• Settlor contributions (via the 2024-34 LTP) of $20.9m
These projections have total capex of $36.3m across 5 years, with $18m of this for seismic resilience works. The Trust acknowledges the capex funding of $33.6m from the settlors across the period of the 2024-34 Long Term Plan, noting that this funding will start in Year 2 of the LTP, FY26.
The Trust intends to commence the necessary seismic resilience works in FY25 using the funding of $4.6m available from the current LTP. The Trust has had a strong response to its recent request for proposals for the seismic resilience works, with tenderers indicating the work is best completed within a 24-month period.
Assuming this work will proceed in the next two years, the Trust will need to increase its commercial borrowings to cover the lag between the work being undertaken and the funding being received from the settlors.
While these projections assume that the seismic works will be completed in FY25 and FY26, before committing to any works the Trust will need to be satisfied that the LTP funding is secured, so that the Trust can service and repay the additional commercial borrowing required. The Trust will work with settlors to progress this matter.
Current borrowing consists of the $4.2m settlor loans (provided in 2020 after the first Covid-19 lockdown) and $0.5m of commercial borrowing.
The other included capex is what is necessary to keep the Stadium operating as a safe and efficient venue, with limited capacity to make material improvements that would provide for a better client and patron experience.
With the Stadium approaching 25 years of age, much of the plant equipment and fixtures are from the original build and replacement is required due to age of equipment and obsolescence of parts for repairs. Many Stadiums in Australia and New Zealand built around the same time have received or are earmarked for substantial upgrades, or in some cases replacement.
In the linked report below there is Balance Sheet for any numbers tragics.
The settlor loans are I think with the two Councils (Regional & WCC).
The commercial lending back at construction was $33M with ANZ. It's now down to $500K
Note the important last 2 paragraphs below.
......limited capacity to make material improvements that would provide for a better client and patron experience.
https://www.gw.govt.nz/assets/Documents/2024/08/Wellington-Regional-Stadium-Trust-Statement-of-Trustees-Intent-2024-25.pdf
Financial Projections
The Trust Deed requires the Trust to be financially autonomous. This requires the generation of sufficient profits to meet loan repayments and provide funds for the capital replacement and development programmes that are necessary to enable the Trust to meet its obligation to maintain a high-quality asset.
Financial autotomy is no longer achievable for the Trust given the Stadium is now an ageing facility, compounded by the additional requirements of seismic resilience works and the impact of the Covid19 pandemic. The Trust still expects to generate positive operating cash flows in most years. It can cover a level of insurance and regular maintenance, but not substantial capex items, such as seismic resilience works or significant capital improvements.
Therefore, continuing to fully invest in the Stadium so that that it operates to best practice as an operationally efficient, safe, and welcoming venue for patrons and hirers, is beyond the means of the Trust alone. The Trust appreciates the financial support it has received from the settlors, and as noted elsewhere in this document, will engage with the settlors on the future operating model of the Trust, including funding options for ongoing capex.
The 5 year projections included here have been prepared on a business-as-usual basis, with 40 plus event days assumed per year.
Over the five-year period, the key inflows and outflows are as follows:
• Net operating cashflows $12.7m (positive, before insurance and grant income) • Cumulative insurance premia absorb $6.0m
• Capex of $36.3m
• Settlor contributions (via the 2024-34 LTP) of $20.9m
These projections have total capex of $36.3m across 5 years, with $18m of this for seismic resilience works. The Trust acknowledges the capex funding of $33.6m from the settlors across the period of the 2024-34 Long Term Plan, noting that this funding will start in Year 2 of the LTP, FY26.
The Trust intends to commence the necessary seismic resilience works in FY25 using the funding of $4.6m available from the current LTP. The Trust has had a strong response to its recent request for proposals for the seismic resilience works, with tenderers indicating the work is best completed within a 24-month period.
Assuming this work will proceed in the next two years, the Trust will need to increase its commercial borrowings to cover the lag between the work being undertaken and the funding being received from the settlors.
While these projections assume that the seismic works will be completed in FY25 and FY26, before committing to any works the Trust will need to be satisfied that the LTP funding is secured, so that the Trust can service and repay the additional commercial borrowing required. The Trust will work with settlors to progress this matter.
Current borrowing consists of the $4.2m settlor loans (provided in 2020 after the first Covid-19 lockdown) and $0.5m of commercial borrowing.
The other included capex is what is necessary to keep the Stadium operating as a safe and efficient venue, with limited capacity to make material improvements that would provide for a better client and patron experience.
With the Stadium approaching 25 years of age, much of the plant equipment and fixtures are from the original build and replacement is required due to age of equipment and obsolescence of parts for repairs. Many Stadiums in Australia and New Zealand built around the same time have received or are earmarked for substantial upgrades, or in some cases replacement.