CEO’S REPORT

On behalf of the Board of Directors, I am pleased to present the 2022 Annual Report incorporating the Annual Financial Report for the year ending December 31st 2022, which details the financial result of a Net Profit After Tax of $4,299,406.

This is an excellent operating result that is reflective of the three Workers clubs trading strongly post-pandemic and post-renovations. The result is a credit to our Board of Directors who lead us strongly through the previous two years, our staff who carried out our brand promise of welcoming everyone and our members and guests who chose to spend their time and money at a Workers club.

The financial result included an EBITDA (Earnings Before Interest, Income Tax, Depreciation and Amortisation) of $12.9M in 2022; up from $6.9M in 2021. The Group reported revenue of $60.4M; up from $37.1M as well as a net profit after tax of $4.3M; up from negative $774,925. Workers Lifestyle Group is in a strong financial position with cash and cash equivalents at $13.4M and net assets exceeding $144M.

The $15M renovation is now completed at Workers Blacktown and we are enjoying a return to pre-pandemic levels of visitation and membership. Our staff numbers are strong with an increase to 237 staff across the hospitality organisation. We have commenced 2023 with the introduction of our Chief Operating Officer, Douglas Kirkham to the Executive Management Team, whose objective is to utilise his wealth of experience in hospitality to help deliver more to our members and guests from our clubs.

Our focus is now towards the future of the new Workers Lifestyle Group, with the goal of expanding our business model and securing generational income diversification, with the goal of proactively growing our financial position through pragmatic asset management.

Workers Lifestyle Group will include your three clubs and, thanks to the achievement of the Development Application for the Seniors Living Precinct in June 2022, an over 55’s living community called Parkside Lifestyle Community. Groundworks has commenced ahead of construction to be underway by June 2023. Throughout 2022, we have registered expressions of interest from hundreds of our members and from May 2023, we begin to assist our future residents secure their new home.

We have also now submitted the Development Application for the front of the Workers Hubertus site. The club’s position next to the Nancy-Bird Walton Western Sydney Aerotropolis is now becoming increasingly relevant as the airport development ramps up ahead of its expected completion date in 2026, just a few short years away. We will seek to create an asset for members through the development of a fuel service station incorporating a truck stop and amenities including fast food outlets.

This interest in income diversification becomes increasingly necessary considering the current proposal for a cashless gaming card which will regulate the poker machine industry further. I acknowledge that gaming machines are currently our primary revenue source, and that while they are a lawful product that is played by a vast majority of people in a reasonable manner for entertainment and social purposes, we understand that for a small percentage, gaming machines are a source of problem gambling.

Our position is that we are responsible operators of both gaming and liquor. We are proactive and seek to identify and provide a gateway to resourceful and supportive experts to assist those patrons. We will never put profit before the health and wellbeing of people in our community. We put people and community first.

Some of our harm minimisation tools include:

• BetSafe Responsible Gambling Program provides a responsible gaming framework, venue and multi-venue self-exclusions, third-party/involuntary exclusions, online exclusion registers, ongoing staff training and free counselling services for patrons. BetSafe also includes mandatory compliance reporting and site audits, along with compliance for Anti-Money Laundering/Counter Terrorism Financing (AML/CTF), Electronic Gaming Machines, Keno and TAB services.

• Voluntary Pre-Commitment (VPC) gives our patrons the ability to limit all or any of their time spent, turnover generated, or cash spent on an electronic gaming machine, and has been in place in all our venues since 2013 via IGT gaming system.

• Third-party exclusions and involuntary exclusions are already permissible through our club constitution and determined externally through BetSafe. An individual can be referred to BetSafe by the club or family member.

• Advanced Responsible Gambling Training has been provided to the Club’s staff voluntarily for the past two years. This training provides a higher level of training to staff in identifying patrons showing indications of problematic gambling and empowers staff to have proactive discussions with patrons.

• Circle Scan is an electronic entry mechanism compliant to the requirements of the Registered Clubs Act which identifies patrons at the entry to our clubs through a central database provided by BetSafe of patrons who have self-excluded (from our venues or other venues). They can be detected at the front door, denied entry and provided a referral to BetSafe.

• Facial Recognition Technology rollout has commenced at Workers. Once approved and activated, we anticipate that Facial Recognition will enhance patron’s security and will aid in detection for harm minimisation purposes by ensuring that self-excluded patrons do not enter the premises.

• Card based gaming has been introduced into all our Clubs through the IGT gaming system. The system sees patrons utilise a member or visitor card collecting gaming machine winnings within our venues and records their information accordingly.

Another area in which we are exceedingly proud is our work within the communities of both Blacktown and the Greater Western Sydney. We may be only “world famous in Blacktown”, however, I believe our efforts in the community space stack up against some of the major corporations. Our point of difference is that we ensure that we are facing the issues that matter to people most in the community –and, most importantly, for us, it isn’t just a cheque writing exercise. We work with our partners on projects that create positive outcomes. We lead the way on issues that need attention.

This includes our two major initiatives currently underway – our commitment to the fight against Domestic & Family Violence and our new program, Western Sydney Changing Diabetes. Both projects will receive significant funding thanks to the Board of Directors, but we are also working with these partners to create tangible outcomes such as the free detection program, healthy cooking classes, the SiSu Health Stations and healthy meals in Blue Gum Café.

One other number that we’re very proud of is the $3 million contribution that was made in 2022 by the Workers Lifestyle Group. This figure is the total estimated value of our community contributions, services and activities. That is to say, when you, our members, chose to spend your time and money with us, you are helping us as a community owned organisation to invest back into your community, your people and your region. For that, we thank you.

Thank you as always to the Board of Directors, led by our President, Kay Kelly for their hard work and commitment to the Group. Thank you to the management and staff for their contribution and mateship.

I offer my condolences to those members who have lost loved ones in the past year.

We look forward to a bright 2023. Please take care of yourselves and each other.

Morgan Stewart Chief Executive Officer Workers Lifestyle Group