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Horkesley Park: Is It Viable?

It is a matter of regret that the Applicant has decided not to publish its assumptions regarding the financial viability of Horkesley Park. There is however certain information in the documentation that allows a business model to be created. Our own senior financial experts have done this and their report and conclusions are shown below. In preparing this report they have also carried out considerable research in comparing Horkesley Park with other similar attractions for which they provide details. Their report shows that :

  • Visitor numbers are considerably overstated.
  • Entry fees are overstated.
  • Spend per head is overstated
  • Margins on food, beverage and merchandise (based on 2009 margins), are overstated.

Any one of these factors (apart from margins on food and beverages) would create an overall loss for the project. If the combined effect of all these factors is taken into account, the project would make a:

Loss before interest and Tax of at least £2.5M.

If Interest on Capital Employed is taken into account the project would not be viable even on the assumptions made by the Applicant.

Furthermore, the analysis does not take into account the considerable additional expense that the Applicant will incur in operating the free/subsidised bus services required by the S106 Agreement. This would make the position even worse.

We also note that the Applicant has not apparently included any staff in the cafe or for security and maintenance. The cost of these may be incremental to the costs given which would make the viability even less probable. We also note that the Applicant focuses heavily on education as one of their main themes and we question whether they have taken into account the onerous and expensive demands of CRB checking of all staff that would be required.

 It is significant that 48% of revenues are predicted by the Applicant to come from the sale of goods and services other than tickets – in other words, retail sales. Whilst there might be some sales from ‘rides’ of various descriptions it is unlikely that they will constitute anything but a small percentage of this total.

It is noted, and of concern, that the Council has agreed that the retail element has been accepted as ‘ancillary’. The Applicant has apparently reduced the dedicated retail space by 86% compared with the 2009 application. This is largely an artificial reduction and there is nothing to stop the use of large areas of the proposed development, including the 2080 sq. M. display ring, for other retail activities such as Farmers Markets, specialist sales, etc. During the Consultation process we were verbally advised by the Applicant that over 120 small businesses had been approached. If they take up the option to sell their wares on the site, they will have to be accommodated somewhere – in other words, retail sales.

Business viability is a matter of legitimate public concern for the development of such a major venture as that proposed for Horkesley Park. Business failure would result in the creation of a venture in the countryside that could only be rescued by further retail expansion which the Council would find hard to resist.

At the very least, we strongly advise the Council to get their own independent financial analysis carried out and make any such analysis available in the public domain.

To quote the concluding sentence of the report:

“on the basis of the information that Buntings have provided, this business plan is not financially viable on any realistic basis. It does not make any sense from either a commercial or financial point of view. In short, it is a complete sham.”

To read the Visitor Attraction Consultants report click here (pdf 433Kb)

It is interesting to see that the report CBC itself commissioned from independent consultants  Britton McGrath Associates coincides with SVAG’s own in its line and conclusions if not in its precise figures.  BMA of course were working from Buntings’ confidential Business Plan.