Trustees of Shetland Arts will tonight be asked to approve the audited accounts for the last financial year, which covers the first six months of operation for Mareel.
The 2012-2013 figures show an overall deficit of £163,250 for the year.
However, a statement accompanying the accounts points out that, setting aside depreciation of £32,666 (after accounting adjustments) and “one off” spending associated with the opening of the cinema and music venue, amounting to £148,018, the trust has an underlying surplus of £17,434.
The “one off” costs are made up of numerous factors including the extended rental of the Toll Clock offices, some staffing costs, legal and professional advice, marketing and web development and ongoing “snagging” in the new building.
The financial statements show that staff costs, including salaries, training, recruitment costs, mileage etc amounted to £1,167,159. Shetland Arts now has 51 full time equivalent staff.
The statements also show generated income totalling £895,275 for the financial year, which includes £327,281 from the box office and £209,382 from Mareel’s bar and cafe.
It is not known what element of the box office total came from the cinema.
For the first time the organisation’s generated income is greater than the income it receives from Shetland Charitable Trust. It amounts to 38.7 per cent of overall income, compared to 22.7 per cent in the previous financial year.
However, it is clear from the accounts that all is far from rosy within the organisation. The trust’s auditors have included an “emphasis of matter” paragraph within the financial statements, highlighting risks to the agency’s future.
They state that ongoing negotiations with contractors and funders about “final costs of completion of construction” of Mareel create a “material uncertainty which may cast significant doubt about the Agency’s ability to continue as a going concern”.
Elsewhere in the statements, Shetland Arts’ chairman Danus Skene acknowledges this problem, writing that the organisation “is severely challenged by the failure to close the capital account of the Mareel project”.
The capital account, he writes “must be closed, and Shetland Arts does not have the internal resources or earning capacity to achieve this”.
Accompanying their accounts for 2012 – 2013, the organisation also released projections for the current financial year, showing a break-even, despite further “one off” costs of around £100,000. In the next year they expect “a modest surplus”. These projections are based on operating figures for April this year to the end of September.