Retain Property & Member Lottery Funding Model

Purpose

To demonstrate that retaining the house, combined with a conservative member lottery model, provides a viable and lower-risk alternative to sale while improving ongoing income and funding capacity.

This proposal has been submitted to the Committee in various forms since October 2025. It has not been presented to members in any formal form. In addition, the absence of published 2024 accounts until March 2026, and the 2025 accounts not yet being available, means that members have not had access to the full financial information required to make an informed decision.

1. Property Income Position (Current Asset)

Gross Rental Income (House + Garage)

• £1,900 per month
• £22,800 per annum

Allowable Costs (Estimated Annualised)

• Repairs & maintenance (deductible): £5,000–£10,000
• Compliance / general upkeep: included above

Net Income (after typical costs)

• £12,800 – £17,800 per annum (pre-tax)

Key Points

• Repairs are tax deductible, reducing effective tax liability
• Income is inflation-linked and controllable
• Asset value retained and likely appreciating
• Revenue expenditure (repairs and maintenance) is deductible against rental income, while capital expenditure (improvements) is not deductible against income but is allowable against capital gains on disposal

2. Committee Sale Model (for comparison)

Net proceeds retained: ~£245,000
Interest @ 4%: ~£9,800 per annum
After tax (19%): ~£7,900 per annum

Impact

• Income reduction vs rental: ~£5k–£10k per year
• Loss of asset and future flexibility
• Fully taxable with no offsetting costs

3. Member Lottery (“500 Club”) – Conservative Model

Assumptions (Conservative)

• 150 members (not 500)
• £10 per month

Income

• Gross: £1,500/month = £18,000 per annum

Distribution

• Prizes (50%): £9,000
• Net to Club (approx. 45% after costs):
  → £8,000 per annum

4. Combined Funding Model (Conservative Case)

5. Funding Capacity vs Requirements

Known Capital Needs

• Immediate works (house + club): £25k–£60k

Funding Outcome

• Year 1:
  Covers essential works (fully or substantially)

• Years 2–3:
  Generates £40k–£75k cumulative funding

• No asset disposal required

6. 2025 Financial Context

The Club has already demonstrated that:

• Exceptional items (repairs, costs of refurbishment/legal, loss of house and shop rent, and other exceptional items)
  were funded from income during 2025

Interpretation

The issue is not inability to generate cash — but lack of structured allocation and reserves.

7. Balance Sheet & P&L Interpretation

Observed Issues

• Property income historically absorbed into trading
• No ring-fenced reserves created
• Exceptional costs distort operating performance

Correction Under This Model

• Property income → reserved / ring-fenced
• Lottery → dedicated redevelopment fund
• Trading → true operating performance visible

8. Strategic Comparison

9. Steward Model – Financial Impact

The use of the property as a Steward’s house should be assessed not only as a loss of rental income, but as part of the Club’s operating model.

Base Cost to Club

Offsetting Benefits

1. Replacement of Bar Staffing

If a steward covers opening/closing and core bar hours:

• Assumed: 25–30 hours per week
• At £11–£12 per hour

2. Operational Uplift (Conservative)

• Improved opening consistency
• Increased event capability
• Better stock control and reduced wastage

3. Property Tax Treatment (Benefit in Kind)

• Accommodation provided is a taxable benefit to the steward
• The Club may structure this as part of remuneration
• Reduces need for higher cash salary

(Exact tax treatment requires professional advice but represents a real economic offset)

Net Effective Cost to Club (Illustrative)

Strategic Interpretation

• The true cost is significantly lower than headline figures
• The model converts a passive asset into an active income-generating role
• It directly supports:
  • revenue growth
  • operational control
  • member experience

Key Point

The relevant comparison is not “rent vs salary”,
but passive income vs active operational performance.

Conclusion

• The Club currently holds an income-producing asset generating ~£22,800 per annum
• Sale converts this into a lower-yield, fully taxable return (~£7,900 net)
• A conservative lottery model adds ~£8,000 annually without dependency on full uptake
• Combined, this delivers £20k–£25k per annum funding capacity
• Financial performance over recent years indicates that reliance on a purely volunteer-led operating model has not delivered consistent or sustainable outcomes
• The Club’s history indicates that the Steward’s house provides operational value, supporting on-site management, control, and revenue generation. This option has not been fully evaluated alongside the financial analysis
• The Committee has presented the sale of the house as the primary solution

• Alternative asset strategies, including the potential sale or partial disposal of other assets (such as the shop), have not been presented for member consideration

Key Decision Point

The Club does not need to sell the house to fund required works.
It needs to control and structure its existing assets and income.
Members are asked to support a restructuring approach that allows time for continued improvement and delivery of long-term membership benefits.

The Committee is requested to:

• consider and respond to this proposal, and
• confirm whether it will support the delay of the sale of the house pending the viability of the alternatives being proven

Committee Response

Awaiting a formal response, which will be added below when received.