Title: Private Golf Courses: Hitting Out of The Rough

Description: Privately held golf courses and country clubs are still trying to hit out of the rough, but data from Sageworks, a financial information company, shows that at least sales may be out of the deep rough. Sales at privately owned golf courses and country clubs have risen 5.5 percent over the 12 months ended April, according to the latest Sageworks Private Company Report. That’s slightly better than the 4.6 percent increase in 2012 and the biggest gain since 2004, according to a financial statement analysis. Despite the sales improvements, courses and clubs, on average, are still struggling with profitability, noted Sageworks analyst Brad Schaefer. Net losses for golf courses have been around 2 percent of sales since 2012, though that’s an improvement from negative mid-single-digit margins from 2009 through 2011, Sageworks data shows. “It still doesn’t look like they’re in a great position from their net profit margins, which are still negative, but it’s definitely better than it has been,” Schaefer said. He noted that golf courses may be able to cut some spending to account for lower sales in lean years. But the capital-intensive nature of courses – with greens that must be maintained using equipment that breaks down and fertilizer that must be replenished – means it may be tough to adjust spending commensurately with fluctuating greens fees in order to maintain profitability.

Link: http://www.forbes.com/sites/sageworks/2013/06/16/private-golf-courses-hitting-out-of-the-rough/