A Club in regional NSW enjoys monthly revenue of $200,000 and operates 55 gaming machines. The Club has historically enjoyed an Operating Profit (EBITDARD%) in the range of 19%-21%. Over the past 12 months, the Club had witnessed a decline in operating profit of approximately 6% or $12,000 per month.

The management of the Club presumed the fall in profit was in line with industry trends, and that this industry decline was being driven by external forces such as changes in legislation, consumer spending patterns, and a decline in local economic activity.

After seeking a subscription to CDOL, the Club undertook detailed comparative analysis of their own performance compared to other Clubs in regional NSW and other Clubs with similar characteristics.

Through the analysis of the CDOL database of over 50 Clubs in regional NSW, the Club was surprised to discover that average decline in operating profit (EBITDARD%) was closer to 2% and not the 6% that the Club presumed was the industry average. Having identified that external forces only attributed to a 2% decline, the Club challenged itself to ascertain why they were experiencing an additional 4% decline.

Through the application of the suite of CDOL online management tools, the Club learnt that their decline in revenue was similar to other Clubs, and as such the additional decline in profit was not driven by a decline in revenue. However, the Club’s Overhead costs had increased considerably more than other Clubs in regional NSW by approximately 4%.

By diagnosing this performance shortfall, the management of the Club was able to focus on finding efficiencies in Overhead costs. Subsequently, total Overhead costs as a percentage of revenue was reduced by 7%, and operating profit was driven from 14% to 21% of total revenues. The diagnosing and correction of excessive Overhead costs provided $14,000 in additional profit per month to the Club.