Our Performance

AAFCANS continues to strongly focus on our purpose of providing convenient access for Defence members to quality food, beverage and retail.

Our business was heavily impacted in the last quarter of the financial year due to the COVID-19 pandemic. Defence personnel were instructed to work from home and incoming US troop visits were delayed until July 2020. As a result, our revenues dropped by $2.7 million and net profit was impacted by $900,000. Our EBITDA dropped $1 million from an earlier forecast of $2.1 million to $1.1 million.

AAFCANS applied for inclusion in the JobKeeper Program however we were deemed ineligible as a Commonwealth agency despite also being a welfare organisation. Whilst awaiting Treasury’s determination, the Board resolved to pay JobKeeper during April and May to ensure facilities remained open and trading for Defence personnel remaining on base. The additional payments to team members above hours worked totalled $257,000.

For the first nine months our food and coffee business grew compared to the prior year. As we look to the future, we plan to position ourselves as the chosen provider on base for coffee and convenience food with a focus on healthy options.

Our Investment in the Future

During the 2019-20 financial year AAFCANS invested a total of $1.1 million in infrastructure and technology improvements, again underpinning our commitment to improving facilities and product and services.

Key investments in our facilities and services were undertaken or are in the planning phase as follows:

• The main canteen at Gallipoli Barracks, (stage 1) commenced at the end of the 2019 financial year. Stage 2 plans an extension to the existing facility which will encompass all day dining and extended trading hours including evenings and weekends. It is expected stage 2 will commence mid 2020-21.
• The Holsworthy canteen was completed in January 2020. The upgraded facility was welcomed by our base population with turnover increasing more than 30% year on year.
• A new kiosk facility was provided at RAAF Edinburgh - the Sea Lion Cafe.
• The Latchford Barracks canteen is planned for refurbishment this coming financial year. This will proceed once movement restrictions lift.
• Two purpose-designed two-wheel drive mobile amenities vehicles are being built to replace vehicles from the ageing fleet.
• An integrated loyalty app to improve access to amenities on base has been developed incorporating online ordering for select bases. The online and app-driven ordering will be initially trialled at Gallipoli Barracks during 2020-21 and then implemented on further key bases.
• A range of environmental and waste management initiatives including the transition to eco-packaging and reusable cups were implemented. We are also a proud participant of the RAAF Williamtown ‘War on Waste project’. With the onset of the pandemic, the reusable cups initiative has been placed on hold.

Pending cash flow, the Board in consultation with Defence base leadership, will continue our strategy to re-energise the business, refurbish old facilities and replace the aged mobile food vans, albeit at a level that is commensurate with the new norm and our trading position.

Our Thanks

Giving back is a prime objective of the business, with AAFCANS returning to Defence $545,000 from the vending program and free coffees to customers to the value of $336,000 whilst maintaining low retail selling prices. This reinforces our commitment to be recognised as a key contributor to Defence’s people capability.

The renewal of the Defence-AAFCANS Agreement that supports our operations, communication and reporting within the Defence community was pushed back a year to enable Defence to undertake a non-public money account and ecosystem review. It is expected the outcome will align services that support base welfare. This is welcomed by AAFCANS.

Finally, on behalf of the board we take this opportunity to acknowledge essential support from the following:

• Defence, particularly the Chiefs and Deputy Chiefs of Army and Air Force,
  the Commanders and Heads of Resident Units;
• Our loyal customer base;
• The AAFCANS team members across the country without whom none of this is possible.

We particularly thank our board of directors in light of their considerable contribution during a difficult year, specifically in the last four months.

We look forward to continuing to implement the strategic plan in what will be an uncertain yet progressive year ahead.