Mark, while the numbers have have added up, they proved unrealistic. Do we agree on that?
What reasons do you give for the failure?
Chris,
I am not sure that the numbers were unrealistic. I would imagine that they were spending somewhere around $600,000 perhaps to maintain the golf course, which is a lot less than other clubs, but given that it was in terrific condition when John Geary and his boys were the operators, it is not that different from the figure quoted in the prospectus.
Obviously it was a stress to work on that budget, but even allowing for a couple of hundred thousand extra, that was still around the GCPL figures.
The administration figure was quite low compared to the breakdown I have seen in annual reports from Sandbelt clubs, but then a lot of the back room administration was done at head office, who would have done it all - payroll, accounts etc - for all three clubs, who each contributed to that cost.
There are many reasons, all with some degree of validity for things not working out. George touches on one below.
I suppose the basic problem was that they promised a no fees model reliant on income from a second course and hotel , and by the time Gunnamatta was ready for play in Feb 2005, there had to be signs of both being under construction by then or soon after, which there wasn't.
As I said before, they had sold around 200 shares when the place was a pile of dirt, and less than 20 in the year it was a complete golf course.
There was also a bust up, for reasons unknown, with Inform, who designed and were to build the first lot of apartments starting at the beginning of 2005. This delayed the start of construction on that aspect of the development until 2006, with a new, mostly unsatisfactory in house design that did nothing to encourage people to purchase them.
Since a lot of finance was tied in with the purchase of apartments, delaying for a year or more was a crucial and critical happenstance.
George:
Thanks for your sentiments. When you make it down to Barnbougle, first round's on me.
