By YOURI KEMP
Tribune Business Reporter
The Fusion Superplex was unable to meet the last staff payroll before the COVID-19 lockdown because debtors failed to pay the collective $1.2m they owe, its top executive revealed yesterday.
Carlos Foulkes, its chief executive, told Tribune Business that March revenues were 73 percent down for the half-month it was open compared to what it earned during the same month in 2019.
Explaining the payroll challenge, which was revealed in a letter to the company’s 350-plus staff yesterday, Mr Foulkes said: “We are on a two-week pay cycle, and the payroll was due to start today. We were anticipating to easily meet it earlier this week, but that has not happened. We have about $1.2m accounts receivables out there, so that was going to be used in part to satisfy payroll.
“The payroll was delayed because the companies that owed the monies are in the condition we are in, so I assume they decided not to release cash to save themselves. That is a situation that has to sort itself out, and it is is a conversation that is ongoing with the people that owe us money.”
Mr Foulkes added: “The conditions we are facing right now is largely due to a reduction in revenue this month. We had, in March of last year, a revenue of $1.3m. We closed in March of this year at $345,000. This was as a result of the occupancy rates plummeting.
“The theatre business has a key indicator called the occupancy rate. That is how many people come into your theatre. So, on any given day, 25 percent of your seats being filled is an industry average. When conditions like this happen the occupancy rates drop.
“There is some volatility in the business, but our goal was to mitigate the occupancy rate on the movie business by adding restaurants and an arcade to have other entertainment options. But when the emergency orders were announced, and the Government said that you cannot congregate in a public place, it pretty much put an end to anything we were doing.”
Mr Foulkes said the announcement of the first COVID-19 case in The Bahamas also left persons afraid to come to Fusion Superplex and other entertainment sites featuring large crowds. He added: “We had a payroll expense of $500,000, and we were not able to make all of it.
“That was a result of the other expenses we have, and the insurance we have to pay out that is up to $600,000 a year. Those matters have to be met. We do plan to pay [staff] as soon as we recover the funds that are outstanding.”
Mr Foulkes said he has obtained assurances from two of Fusion’s debtors, and said: “One of the two we have outstanding will help us to cover payroll. I hope this will be done in 30 days. We have to remind our employees that they have not lost their jobs, and I assume the funds will be useful to them once they get back.
“In general we are suffering the same global conditions everyone else is suffering. What we have as an advantage is our location, so what we intend to do is look for alternative movie content. For example, we are looking at Europe while Hollywood has pulled back on releasing new content.”
Mr Foulkes added that while new releases from Hollywood were postponed due to the coronavirus outbreak, “Hollywood has allowed Fusion to play old movies in the meantime in light of their industry wide shut down”.