You need to be a creative thinker, innovative and flexible, says Jabulani Dlamuka, uShaka CFO
In the two years since he has been at the helm of the finance department, uShaka Marine World chief financial officer Jabulani Dlamuka has increased revenue by 20% and cut costs by 5% overall. He has implemented various new strategies and systems, and changed governance structures to make the department more efficient. To do all of this and keep the tourism entity successful, he’s had to be on his toes. “You cannot be relaxed. You need to be a creative thinker, innovative and flexible. At the same time, you need to understand the market you’re operating in. The industry is quite flexible, so if you’re not increasing your pace you’ll get left behind.”
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You've been in this post for close on two years. What was the state of the department when you joined, and how does this compare to now?
"We've been very successful. Our revenue has increased by about 20% and our liquidity by around 6%. We've also saved costs by 5% overall."
"We devised a new strategy based on our cost recovery model, and have also invest a lot in our IT to ensure there was efficiency throughout. We put in place an online booking mechanism, which has increased our footfall significantly. Because our business is seasonal, we came up with what we called the 'off-peak strategy', to stimulate the off-peak revenue. And it works. We introduced different events and attractions, and different pricing, as well as a discount mechanism and loyalty programme, along with some anchor events."
What are some of the key accomplishments you've made while in this position? Is there more you still want to achieve?
"Probably the biggest thus far was bringing in a chief information officer - we had to create that position to improve our governance of IT. I brought in a new financial manager, who has helped the finance team in terms of compliance and accounting standards and financial reporting. We've also revised where we have most of our staff and put into place an internal promotion system, where internal staff get preference if there's a new position available. Because of this, staff attitudes have changed quite significantly."
What are some of the nuances of working for such an organisation?
"It's difficult. It's very seasonal. You need to know your game and be flexible enough to change. You need to know the economic conditions because disposable income affects visitor numbers."
"The issue of pricing is key. We've got a financial model that defines our minimal cost for the park. So, if we discount, we can only discount to that amount. When we discount, we take support form overhead costs out of the recovery model and only recover our fees costs. That's how we discount."
"We use a lot of benchmarking with other stakeholders. We've done a comparison in the market and determined what price the market can afford. We use a lot of seasonal pricing because of the demand - higher demand allows us to increase price. Also, we have dual pricing - local and international."
What is the strategy of the organisation from a finance perspective?
"Funding of infrastructure is a priority. We've put forward to the board the funding strategy and policy for infrastructure. We want to build using a reserve fund to finance future development, so we aren't as reliant on grant and government funding. Supply chain is also important. We've put in a strategy where we can ensure we get the best price regardless of what we purchase. Also, we are trying to improve efficiency in our supply chain."
"We are considering a joint-venture. We want to bring private stakeholders into the park to partner with us. For example, a teambuilding and adventure company. We are also looking to bring a radio studio to the park - to come and operate in the park, so that we have adverts. This will cut our marketing costs. One of the terms of our MOU will be that we can advertise on the station free of charge."
What do you most enjoy about this particular post; what do you find most challenging?
"You cannot be relaxed. You need to be a creative thinker, innovative and flexible. At the same time, you need to understand the market you're operating in. The industry is quite flexible, so if you're not increasing your pace you'll get left behind. A big challenge is that the economic situation has impacted the industry severely, because people's entertainment spend has decreased."
"I find it challenging to keep the staff positive and motivated. You need to have a staff who are good at interacting with guests because your experience of guests in the park is paramount. So, we invest a lot in staff training and customer care and guest care."
"Funding is another tricky one - you don't necessarily get all the funding to fund the infrastructure. In this business, you must invest at least every three years in big attractions, so you need additional funding."
"We get some from the city metro, and some from other stakeholders. We use our reserves to bridge our finances. We are recovering costs, but there is an element we aren't able to cover. However, if you look at our EBITA, we are making profit. But the depreciation is quite high because our investment in infrastructure is quite high."
This is not your first CFO role. How does it compare?
"I was previously at the Amatola Water Board and in the transport sector with Transnet. This is my third CFO role. It's a different scenario altogether. At the Water Board, you had a certain number of customers you were servicing. Here, you deal with thousands of guests. Also, I didn't have a marketing budget at the Water Board, whereas here, the marketing budget must be on top."
While at Amatola Water Board, you went from a loss of R17 million to profit of R12 million within a year. Tell us how you achieved this.
"We put a tariff structure into place. It was significant. We also implemented a strategy saying we need to supply as much as we can, not limit supply. As long as we pumped water to customers, they would use it. That same year I worked with the CEO to raise infrastructure funding by R500 million. So we put water networks into rural areas."
Which achievement in your business career so far are you most proud of?
"What I achieved at Amatola. I was highly valued there. When I was about to leave the minister of finance in that province called me into a meeting to discuss the possibility of me staying. I had to discuss with the union rep because they had earmarked me as a future CEO. Leaving was a difficult decision. I made great relationships there. I worked hard and turned that company around - when I started they couldn't even pay salaries but when I left there was R100 million in the bank."
Did you always want to be in finance?
"I wanted to be a doctor."
Do you have any career regrets?
"My career has been so successful I'm really happy. My first role as senior manager was at age 32."
What keeps you busy outside of work?
"My two boys - aged 8 and 2. I'm a sports person by nature. I used to play cricket at university. I Also play soccer. And I have a smallholding."
When you think of SA's future, what makes you most hopeful? What scares you?
"Our youth make me hopeful. SA's youth has been given such extensive opportunities to go to whatever level they want to, and to realise their potential. They're making significant contributions. At least we can bank on them that our future looks bright. And we're seeing our youth playing a huge role in economic development too. Our youth hold our future as proudly South African."