New Mardi Gras has reported a loss of $166,000 on its 2005 season after a number of festival events failed to raise expected revenues.
The majority of the loss was due to poor bar sales at the festival launch party in Hyde Park and at Fair Day, held in Victoria Park.
The organisation also lost money due to the cost of fencing at the launch and budgeting variances across some of the season’s events, New Mardi Gras co-chairs Mark Orr and Steph Sands said in a statement.
On top of this the company has also learnt it must pay off a $196,000 tax bill from the 2003 festival.
The organisation’s board had hoped it would be exempt from tax because it was considered a not-for-profit organisation. Their most recent advice is that they will have to pay up.
Sands told Sydney Star Observer New Mardi Gras was still in a position to deliver a successful 2006 season as they have around $250,000 in the bank -“ about the same amount they had in the lead-up to the 2003 and 2004 festivals.
It was really disappointing, Sands said of the loss. We all hoped to make a profit this season.
But it’s not all doom and gloom. We have budgeted the organisation until the end of the 2006 season, so the festival as we know it won’t be changed next year.
Sands said New Mardi Gras already had sponsors on board for 2006 and she hoped to pick up several more before the festival started.
Last year the company announced a profit of $123,181 for the 2003/2004 financial year.
A loss was made on bar sales at the 2005 launch despite it being a fully licensed event, and there were lengthy queues to get service. Organisers said they would look at possibly creating more service points at the bar to speed things up next year.
The loss on the bar at Fair Day came about when the event had to be closed early due to wet weather.
There were some unforseen circumstances that impacted on our budgeting, with poor bar sales at the launch and Fair Day being effectively cut in half with our most profitable part of the day being closed, Sands said.
It just shows how fragile our events are, and we’re a fragile organisation still. We still need to source additional sources of revenue.
The $196,000 owed to the tax department would be paid off in instalments within the next financial year, Orr told the Star.
The tax is an added complication, he said. We have to pay the tax and we’ve factored it into our cash flow moving forward. That is one of the challenges for the organisation.
Orr said the New Mardi Gras board was comfortable with the tax debt.
It would be nice to have a bit more money there and not be struggling like a start-up company, but the reality is we’re only three years old and for any company there are the growth pains and cash flow challenges.
The board has been advised the organisation could minimise its taxable income by selling party tickets only to members. Revenue raised from such sales would not be taxable.
As the parties are New Mardi Gras’ major source of revenue, Orr said it’s something that will be discussed at the annual general meeting on 25 June.
Overall Orr said he was very happy with how the season went and the reaction of the community has been absolutely fantastic.
It would be nice to have more money. We’re really going to have to push Sleaze as a fundraiser for the 2006 season, he said.