Renowned golf club’s profits halved in 2012

Profits at one of the country’s most renowned golf clubs last year declined by 46% to €291,947 after income from new membership fees plummeted.

According to Lahinch Golf Club’s annual report, the 121-year-old club recorded a surplus last year of €291,947 compared to a surplus of €540,231 in 2011.

The links club counts Irish rugby international, Paul O’Connell and multi- major winner, Phil Mickelson amongst its members and the chief factor behind the drop in profits was revenue from entrance fees declining by 94% from €262,999 to €15,000.

The drop in income from overseas life membership fees was less stark, declining from €179,606 to €141,815.

In a report presented to members of Lahinch Golf Club at the club’s AGM, the club’s captain, Ray Hennessy confirmed that the club has lost 500 fee-paying members since 2009.

Overall membership last year dropped by 87 from 2,772 to 2,685 and this followed the club in 2011 losing 75 adult members through resignations and a further 98 receiving leave of absence.

In his report, Mr Hennessy blames the drop-off in members on “the financial crisis” and Lahinch facing the specific challenge of being a second club for the majority of members.

In response to the drop-off in membership, the club last year slashed entrance fees for new members from €25,000 to €10,000 and also proposed a new intermediate category of membership.

However, Mr Hennessy reported a 7% increase in green fee income to €1.13m last year — the average green fee charged by the club declined by 38% from €111 in 2008 to €69 in 2011.

Last year, the golf club transferred €1m of its reserves to a contingency fund “in the event of a material downturn in green fee revenue”.

The increase in green fee income and a reduction in operating costs of €1m over four years contributed to the club increasing its operating profits last year by 38% from €97,626 to €135,132 (before income from membership fees taken into account).

In his report, Mr Hennessy said that the operating surplus “continues the modest recovery of our finances since the difficult years of 2008 and 2009 during which we lost €1m”.

“The improved financial position of the club has been achieved by councils over the past four to five years taking difficult and sometimes unpopular decisions; however these decisions now place the club in a much stronger position to withstand future challenges.”

In his report, Mr Hennessy said: “I am confident even with 120 great years behind it, the future is bright and the best is still ahead for Lahinch.”

The figures show the club’s income marginally dropped from €2.414m to €2.397m with the golf club’s expenditure dropping from €2.316m to €2.262m.

The club’s accumulated fund at the end of 2012 stood at €6.39m, which included €1.72m in cash.

The minutes of the 2011 AGM circulated for yesterday’s AGM record incoming captain, Mr Hennessy stating that “the ongoing review of all costs is crucial for the long-term viability of the club as another shock similar to that experienced in 2008/09 could have the potential to cripple the club”.

The profit last year takes account of non-cash depreciation costs of €409,870.