“SIGNIFICANT DOUBT” ABOUT FUTURE OF PENARTH ARTS & CRAFTS – SAYS FINANCIAL EXAMINER

The independent financial examiner engaged to review the accounts of the charity Penarth Arts and Crafts Ltd – which runs Penarth Pier Pavilion – says there exists a “material uncertainty which may cast significant doubt about the charity’s ability to continue as a going concern

The long-awaited accounts for Penarth Arts and Crafts Ltd [a.k.a. PACL – the  limited company/charity which holds a 125 year lease on the Vale of Glamorgan Council-owned Penarth Pier Pavilion] –  paints a bleak picture of the company’s financial position at the end of 2016.

The accounts have just been published on-line by Companies House and show the company is still spending far more money than it makes – and is therefore getting deeper into debt.

In the year ending December 31st 2016 PACL had a total income of £157,594 but the company spent £194,543 . That resulted in what is described as “net expenditure” [ i.e.  overspend]  for the year of £36,949.

That overspend of £36,949 follows an even worse overspend in the previous year totalling £82,674.

The Penarth Pier Pavilion Cafe is run by a PACL trading subsidiary called Penarth Pier Pavilion Ltd – which pays a “management fee” to Penarth Arts and Crafts Ltd

Meanwhile what is described as a “management fee” of £60,000 for the year has been paid to PACL by its trading subsidiary Penarth Pier Pavilion Ltd.  The report of the Trustees [i.e. the directors of PACL] states that “The management fee received from the trading subsidiary remained at £60,000. It has been a difficult trading year for the subsidiary and as a result not all the management fees have been paid over to the charity [ i.e. PACL]  at the year-end.  Management have been concentrating on reducing costs and improving efficiencies in 2017 in order to rectify the situation”  .

Professor Anthony Hazell, chairman of Penarth Arts and Crafts Ltd

The accounts also state that no employee received emoluments in excess of £60,000 – implying that £60,000 was  annual salary paid to the highest-paid employee .

The highest-paid employee is not named but may be the chairman of PACL Professor Anthony Hazell.

The report of the trustees concedes that the  “The major risks…..continue to be the financial sustainability of the Pavilion and the difficulty of building up reserves”

Included in the accounts is the report of the independent financial examiner Julia Mortimer FCCA of Watts Gregory Chartered Accountants.

Julia Mortimer of Watts Gregory undertook the independent examination of PACL’s accounts

Setting out the basis of her examination [ which isn’t a full audit]  she says “the procedures undertaken do not provide all the evidence that would be required in an audit and consequently no opinion is given as to whether the accounts present a “true and fair view””

In her statement Ms Mortimer says: – “I draw your attention to the disclosure made…concerning the charity’s ability to continue as a going concern. The charity is reporting a deficit for the year of £36,949 . The balance sheet shows net current assets of £39,055. However this includes a debtor of £64,633 owed by Penarth Pier Pavilion Ltd, the subsidiary company. The subsidiary company has net liabilities of £111,293 at 31 December 2016. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the charity’s ability to continue as a going concern.”

Ms Mortimer also points out that “The financial statements do not include the adjustments that would result if the charity was unable to continue as a going concern”.

Other parts of the accounts also reveal where Penarth Arts and Crafts gets other money from: –

TV viewers who donate cash to the BBC’s Children In Need charity telethon may be surprised to find that some of their donations – amounting to £11,683 – go into the coffers of Penarth Arts and Crafts Ltd. Children in Need gave PACL a grant for running “art workshops and other related topics for children with special needs and disabilities“.

The cycling pressure group/charity CTC – otherwise known as the Cyclists’ Touring Club – [and now rebranded as Cycling UK ] provided a grant to Penarth Arts and Crafts to deliver “deliver classes on bicycle maintenance in the Vale of Glamorgan” – and also to set up “a cycle club in the area”

Ironically in 2016 the Film Agency Wales gave Penarth Arts and Crafts “grants towards specific screenings or series throughout the year”. Penarth Arts and Crafts announced the closure of the Pier Pavilion’s new public funded £1,000,000 integral digital cinema in February 2017

Film Hub Wales also gave funding “to contribute to Welsh film support of the Roald Dahl on film project”  – again just months before the PACL closed the Pavilion cinema. 

 

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22 Responses to “SIGNIFICANT DOUBT” ABOUT FUTURE OF PENARTH ARTS & CRAFTS – SAYS FINANCIAL EXAMINER

  1. andrewsketty says:

    I hate to say it but the sooner PACL goes under the better. I’m afraid that’s the only way the Pavilion will be turned around and the much loved cinema re-opened in the way it should be. This organisation has now proven beyond doubt it is not capable of managing this invaluable cultural asset in our town.

    This year’s trading can only have got worse – with the full closure of the cinema, reduction in opening hours and an every dwindling offer in the cafe then I can only guess how much income is trickling in. It’s an embarassment to Penarth and as a friend of mine said ‘PACL are running the Pavilion is if it were a village hall’

    Let someone take on the cafe and bar and make it something worth visiting and surely Chapter can take over the state of the art cinema and extend their screenings to Penarth? It’s a no brainer but PACL need to vacate the building first – as we know though from their siege mentality in 2017 they may need to be pushed out!

    • Philip Rapier says:

      “These conditions indicate the existence of a material uncertainty which may cast significant doubt about the charity’s ability to continue as a going concern.”
      You PACL promised to re-open the Cinema by now but you have failed!
      In April PACL were given £126000 by the Lottery for obtaining Financial Advice.
      You PACL have spent hard earned Public Money to obtain the obvious inevitable truth.
      The Game is up! Resign! Go!

  2. Ann Other says:

    Can someone please put them and us out of our misery?

  3. whatsoccurn says:

    in the 60’s Black Country, I used to mooch around local waste ground with a blocked up canal tunnel-it is now the Black Country Living Museum, like Big Pit one of the top attractions in the UK-underpinned by hard work of trustees,staff and volunteers-the Penarth Pavilion Project is miniscule compared with those projects and has frankly become an embarrassment to Penarth.

  4. Mark Foster says:

    A few additional points from the accounts to help you with some rational analysis:

    The Vale of Glamorgan Council Grant was reduced from £35,000 in 2015 to £5,000 in 2016.

    No Directors/Trustees received remuneration or expenses.

    There were 3 Pavilion Director/Management Staff and 3 Admin Staff in 2015 and they got paid £157,345 in total. In 2016 there were 2 of each and they got £94,255 in total. No individual got more than £60,000.

    Thus most of the overspends of £82,674 in 2015 and £36,949 in 2016 went in paying the people.

    Remember this was the charity, not the pavilion operations.

    https://beta.companieshouse.gov.uk/company/03510104/filing-history

    • Ann Other says:

      But this is the kind of profile you would expect to see in a failing organisation, is it not? It’s normal for trustees on boards not to receive remuneration as they are voluntary contributors of their supposed expertise; the officers and executives did receive salaries as your explanation elucidates. The reduction in the grant was inevitable, known and should, along with the actions they were planning to become self-sufficient, have been written into the strategic plans and account predictions of the board and company. Most critically, staff costs outrunning income is exactly the kind of thing that scuppers organisations and indicates the lack of success in either (a) reducing staff costs by laying people off, or (b) using those people to increase income. Neither of these aims was achieved so the inevitable happened. (It would also be interesting to know whether the grant given to them to develop some sound business plans has had any outcome.)

  5. Local Eye says:

    The problem with the Pavilion is that it is not large enough to hold any events that could make any money and parking is limited. Neither of these shortcomings can be overcome so throwing more money at it is not the answer. Regrettably its a busted flush unless a local property development company is prepared to buy and develop it.

  6. Andrew saurus says:

    Where is Chris David when you need him? He’d sort this out in between posts on here, but he’s gone missing. Is he presenting his carte vitale scheme to the UN? Is he in rehab after too many 70p plonks? Is he plotting the downfall of the WAG/our local councils/our police commissioner/our MP? Has he been abducted by the Penarth Stasi? This is suspect, we need to know.

    • Dr. Strangeglove says:

      You need Chris David? Why? Are the comments too considered and coherent? Lack of rudeness and insults?
      I think the general tone is much improved as it is, without his immature, tit for tat, ego outings.

  7. Andrew Worsley says:

    I for one get sick of Penarths obsession with the Pier and Pavilion , yes we know lots of Penarths ‘native’ population are beguiled and absorbed by the fact the town has a pier etc , but not everyone shares this fixation . I amongst others have seen online videos supposed to show Penarth to people who have never been here , it goes like this photo of the pier , then the beach then another shot of the pier , then one of the pavilion from this side , then one from the other side , then the pier entrance , another picture of the beach , photo of the promenade , another photo of the pier from a different angle oh and now a long shot of the pavilion and pier and on and on and on . And that was supposed to show the town of Penarth . And that portrayal is not even exceptional but the norm.

  8. Local Eye says:

    I think the word you are looking for is folly as that sums it up in one word.

  9. Clive says:

    Interesting to note the Tramshed Cinema in Clare Road is smaller than the Pier but seems to have an enthusiastic presence see http://www.cinemaattramshed.com
    I have no knowledge of its success or otherwise but given the proximity of the Vue Cinema’s it’s clearly been conceived as a niche offer.

  10. No-brainer says:

    No need to go that far to tramshed, All Saints cinema club sold out again tonight. Thanks to all for putting on another great film.

  11. Mike Yorke says:

    I’d be worried if I was a supplier and as owed money!

  12. Jane G says:

    It really doesn’t help the situation to speculate what certain people might have been paid when they actually get paid nothing and make huge efforts for free. This is misleading and unfair.

    • NewsNet says:

      The financial statement says:- “No employees received emoluments in excess of £60,000”. Four people are on the staff of Penarth Arts and Crafts. They were paid a total remuneration of £94,255 in 2016. Two of the staff are described as “Pavilion director / Management” – but, as stated in the news item, neither is identified by name.
      In 2015 the salary bill was even higher. In that year 6 staff were paid a total of £157,345.

  13. No-brainer says:

    Nasty pasty andrewskettyyy maynot be comparable but we all had a super night watching a film and well run and well organised more than you can say for Pavillion

  14. AK says:

    A few amusement machines would bring in the money. Not necessarily the flashy complex ones we old folks can’t understand, but some fun old Victorian ones.

  15. John Powell says:

    A well run cafe on that unique site could more than rescue the operation – th cafe though is not of that calibre. It also has unused capacity on the first floor,
    So there IS plenty of space for events.

Comments are closed.