Member Announcement
Overflow Car Park - Deed of Release
Dear Wyke Green Members,
I hope this email finds you well.
As Chairman, I wanted to provide a clear and transparent update on a recent positive financial development for the Club and outline the Board's current thinking on how these funds may best be used.
It's important to note at the outset that the Club has not yet received these funds. However, as the agreement has now been reached, we felt it appropriate to update members on the current position.
The Club has agreed to receive a payment of £300,000 in exchange for releasing the restrictive covenant on the car park adjacent to the Club. To reiterate, the Club did not own this car park; however, the covenant granted us the right to use it for parking at weekends. In practice, this right was rarely - if ever- used by members.
Before agreeing to release the covenant, the Board sought professional advice and undertook a careful assessment of the value of that right. This included taking external advice and negotiating with the relevant parties to ensure the Club received fair value for relinquishing the covenant.
After accounting for legal and advisory fees, and corporation tax at 25%, the net amount expected to be available to the Club will be approximately £210,000.
As was raised at the recent AGM and Finance Meeting, members put forward a range of suggestions for how a windfall such as this might be used. These included reducing annual subscription fees, investing in infrastructure, or reducing the Club's mortgage.
The Board's view is that windfalls of this nature should be applied to the long-term benefit of the Club and will not be used to directly fund subscription fees or operating expenditure.
With this principle in mind, the Board is currently minded to apply a significant portion of the funds towards a substantial overpayment on the Club's mortgage, subject to final Board approval once the funds have been received.
This approach would deliver significant long-term benefits. In addition to reducing the Club's future interest payments, paying down part of the mortgage would reduce our overall indebtedness, strengthen the Club's balance sheet and lower the financial risk faced by the Club in the years ahead.
To illustrate the potential impact, our lender (NatWest) has provided the following indicative figures based on the current outstanding balance of approximately £544,482:
1. An overpayment of £175,000 (the amount the Board is currently minded to proceed with) would reduce the balance to £369,482.
2. This would lower our quarterly repayment from £17,109 to approximately £11,707.
3. The indicative interest interest saving over the remaining term of the mortgage would be approximately £119,500.
For context, a £150,000 overpayment would save around £102,400 in interest, while £200,000 would save around £136,700. The Board believes £175,000 strikes the right balance between meaningfully reducing our debt while retaining sufficient liquidity for other needs.
We will of course keep members updated once the funds have been received and the Board has formally confirmed the final decision.
As mentioned at the Finance Meeting and the AGM, the Board continues to take a prudent view when estimating future income and expenditure, particularly at this time of membership renewals. Any surplus generated by the Club is used to provide long-term financial security by building appropriate cash reserves, while also investing in the facilities and course for the benefit of both current and future members.
Thank you, as always, for your continued support of Wyke Green Golf Club. If you have any questions regarding this update, please do not hesitate to contact me or Michael Deller-Merricks (General Manager) directly.
Best regards,
Jim Druce
Chairman
Wyke Green Golf Club
I hope this email finds you well.
As Chairman, I wanted to provide a clear and transparent update on a recent positive financial development for the Club and outline the Board's current thinking on how these funds may best be used.
It's important to note at the outset that the Club has not yet received these funds. However, as the agreement has now been reached, we felt it appropriate to update members on the current position.
The Club has agreed to receive a payment of £300,000 in exchange for releasing the restrictive covenant on the car park adjacent to the Club. To reiterate, the Club did not own this car park; however, the covenant granted us the right to use it for parking at weekends. In practice, this right was rarely - if ever- used by members.
Before agreeing to release the covenant, the Board sought professional advice and undertook a careful assessment of the value of that right. This included taking external advice and negotiating with the relevant parties to ensure the Club received fair value for relinquishing the covenant.
After accounting for legal and advisory fees, and corporation tax at 25%, the net amount expected to be available to the Club will be approximately £210,000.
As was raised at the recent AGM and Finance Meeting, members put forward a range of suggestions for how a windfall such as this might be used. These included reducing annual subscription fees, investing in infrastructure, or reducing the Club's mortgage.
The Board's view is that windfalls of this nature should be applied to the long-term benefit of the Club and will not be used to directly fund subscription fees or operating expenditure.
With this principle in mind, the Board is currently minded to apply a significant portion of the funds towards a substantial overpayment on the Club's mortgage, subject to final Board approval once the funds have been received.
This approach would deliver significant long-term benefits. In addition to reducing the Club's future interest payments, paying down part of the mortgage would reduce our overall indebtedness, strengthen the Club's balance sheet and lower the financial risk faced by the Club in the years ahead.
To illustrate the potential impact, our lender (NatWest) has provided the following indicative figures based on the current outstanding balance of approximately £544,482:
1. An overpayment of £175,000 (the amount the Board is currently minded to proceed with) would reduce the balance to £369,482.
2. This would lower our quarterly repayment from £17,109 to approximately £11,707.
3. The indicative interest interest saving over the remaining term of the mortgage would be approximately £119,500.
For context, a £150,000 overpayment would save around £102,400 in interest, while £200,000 would save around £136,700. The Board believes £175,000 strikes the right balance between meaningfully reducing our debt while retaining sufficient liquidity for other needs.
We will of course keep members updated once the funds have been received and the Board has formally confirmed the final decision.
As mentioned at the Finance Meeting and the AGM, the Board continues to take a prudent view when estimating future income and expenditure, particularly at this time of membership renewals. Any surplus generated by the Club is used to provide long-term financial security by building appropriate cash reserves, while also investing in the facilities and course for the benefit of both current and future members.
Thank you, as always, for your continued support of Wyke Green Golf Club. If you have any questions regarding this update, please do not hesitate to contact me or Michael Deller-Merricks (General Manager) directly.
Best regards,
Jim Druce
Chairman
Wyke Green Golf Club