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Annual Performance Statement

Introductory Statement

The annual performance statement is prepared in accordance with s39(1)(a) of the PGPA Act for FY19/20 and accurately presents the entity’s performance in accordance with s39(2) of
the PGPA Act.

Entity Purposes

The vision for Navy Canteens is stated as “Benefiting the Navy family”. The mission for Navy Canteens is stated as “To grow sustainable valued benefits for the Navy family”.

Regulation 8 of the Navy (Canteen) Regulation 2016 outlines the functions and powers of
Navy Canteens.

These functions and powers include making money grants from the Navy Fund to the Navy Relief Trust Fund (RANRTF) and making grants and loans to persons conducting canteens, clubs, cinemas or other institutions or facilities for the direct welfare and entertainment of serving Navy people.

The mission outlined above, “To grow sustainable valued benefits for the Navy
family”, will be enabled by Navy Canteens growing profitability through commercial business undertakings, delivering enhanced benefits to the Navy community, and maintaining efficient and effective governance of the Navy Canteens Enterprise.

Measurement and Assessment

The following table contains the performance measurement targets and achievements by business activity as detailed in the 2018/2019 Corporate Strategic Plan.

Business Activity

Performance Measurement

Target 19/20

Actual 19/20

Canteen operations on Naval Establishments

Comparison of actual net profit with budgeted net profit

Within 10%

(35%)

Total revenue growth

Achieve Budget

0%

Labour %

(Total labour cost as % of gross revenue)

30%

33%

COGS (Cost of Goods) %

(Total COGS as % of gross revenue)

45%

43%

Navy Canteens Merchandise

Total revenue growth (over previous year)

Achieve Budget

(36%)

Holiday Centres

Total revenue growth (over previous year)

Achieve Budget

(25%)

Net revenue growth

Achieve Budget

(51%)

Annual occupancy rate

Baseline

40%

32%

Win With Navy Raffle

Number of Navy participants in total draw

3,800

3,385

Navy Ticketing

Number of Navy participants using the service

62%

53%

Analysis of Performance

Factors that have contributed to the entity’s performance in achieving its purposes that have had a significant impact in the reporting period include:

Canteen operations on Navy establishments – Canteen performance is now showing the financial and service benefits of changes executed under the Strategic Plan and in response to the impacts of COVID-19. Changes have included introduction of a staffing model to improve agility of the businesses to adjust to change, a capability model to allow the operation to adjust to changes in Base activity, improved revenue and cost management, supply chain management and improving base relationships to better understand customer demand. Adoption of a franchise style approach to the canteen operations has included classifying them as small/medium/large operations with associated capability and staffing models. All canteen operations are now sustainable with operations generating positive returns. Implemented changes are essential for the canteens operations to grow and maintain the competitive edge against off base competitors.

Navy Canteens Merchandise – Competitor pricing remains a challenge for securing orders
within Navy. Improvements in the supply chain have been implemented and quality issues are being addressed.

Holiday Parks – The Holiday Parks were significantly affected by the bushfires and the impacts of COVID-19 during FY19/20. The focus will remain on the careful management of investment in accommodation infrastructure to maintain market advantage in the highly competitive holiday park market.

Win With Navy Raffle – The impacts of COVID-19 has resulted in a reduction in participation in the operation during FY19/20. Plans for growth will be implemented during FY20/21 in accordance with the Strategic Plan.

Navy Canteens Ticketing – The operation experienced a significant reduction in demand as a result of COVID-19 with many shows and events being cancelled or postponed. During the FY19/20 Navy Personnel accounted for 53% of the service against a target of 62% for the year.

Total Navy Disbursements – For accounting purposes disbursements (Grants and loans) to the Navy community are included in expenditures, rather than subtracting from the Enterprise’s surplus. As a result, disbursements reduce the end of year financial result. FY19/20 recorded a reduction in disbursements to $230K. The Enterprise remains in a sound financial position after disbursement of grants and loans in FY19/20.