Income fall hits Business Central balance sheet

Revenue, subscriptions fall but the advisory group is hoping for better results after cost cuts. Dave Burgess reports.

KEY Wellington organisation Business Central has posted an annual operating loss for the year to June of more than $657,000 – its fourth successive operating deficit.

Business Central – represented in the capital by the Wellington Employers’ Chamber of Commerce – is a not-for- profit membership organisation. It was formed in a 2010 merger between the Wellington Regional Chamber of Commerce and the central branch of the Employers and Manufacturers Association (EMA).

Although it posted a $657,837 operating deficit for the year to June, the Busi- ness Central Group’s net more modest $206,818.

In 2011 the group posted a net loss of $639,000. That ballooned to a loss of just over $1 million in 2012. Last year it recorded a profit of $514,000, despite posting an operating deficit of just over $39,000, after a gain on the revaluation of equities.

The group’s total assets outweighed its liabilities by more than $8 million.

Business Central president Vaughan Renner attributed the 2014 year’s result

deficit was a to a decline in its services revenue and membership subscriptions. Revenue for the year was $5.69m, down just over $744,000 on the previous year.

‘‘As a result of the drop in revenue our deficit has increased . . . [on 2013] ... [and] is significantly lower than the 2012 result . . . and the years prior to that following the merger.’’

Renner said Business Central now partners with sister organisation, the Employers’ and Manufacturers’ Association Northern, to deliver expertise in human resources, occupational health and safety, and employment relations advice to members. ‘‘This was the result of a review of the consultancy part of the business which was not operating in a financially sustainable way. We are confident the new arrangement delivers first-class support to members by way of a financially sound model using members’ funds responsibly.’’

Fallout from the review saw 15 staff made redundant. The financial implications will feature in the 2015 results. Renner fudged on whether he thought another loss would be posted.

‘‘I’m not in a position to give exact figures but we believe the new model will bring improved services as well as significant cost and efficiency benefits to Business Central and its members. Management is continuing to monitor income and expenditure carefully.’’

Last week, Kirkcaldie & Stains managing director John Milford resigned, effective from March, when he starts as chief executive of Business Central.