A detailed review of operational costs will take place at Dundee Rep and Scottish Dance Theatre in a bid to boost their financial reserves.
Uncertainty remains about future levels of public subsidy, with the current arrangement with major donor Creative Scotland due to run out in March.
In 2015 the national arts development agency agreed to provide The Rep with £3.25 million over three years as well as a further £2.68m allocated to the dance company over the period.
Last year director Peter Inglis raised concerns that Creative Scotland may not be able to fulfil this deal.
However, in the annual accounts for the year ending March 31, he confirmed the promised level of funding had been maintained though added that “future levels of funding remain a concern”.
He said: “Uncertainty about future levels of public subsidy and the timing of funding decisions continue to be a cause for concern.
“Efforts are being made to grow fundraising and earned income.”
Last year Dundee Rep and Scottish Dance Theatre received a total of £2.6m in grants. It recorded an operating profit of £252,000 compared to £88,000 in 2015/16.
Staffing levels in the group reduced from 117 to 104. The number of actors employed went from 12 to 10. Theatre service staff reduced from 34 to 26.
With uncertainty over the level of future subsidies, the board initiated a programme to increasing its unrestricted reserves. This rose from £9,155 to £380,000 over the course of the 2016/17 financial year.
Mr Inglis, who resigned as a director last month, continued: “The board of directors consider the ideal level of unrestricted reserves that should be available at any given time to be £500,000.
“The reserve level has been quantified by ascertaining the key operating and overhead costs of the charity for a period of three months that would be required if primary funding was withdrawn.
“Directors also believe it would be prudent for the charity to retain a cash reserve equal to this level for use when cash flow is restricted or funding withdrawn.”
During the year the group allocated theatre tax credit income to unrestricted reserves and also formed two charities to increase fundraising income.
Going forward, the company intends to promote the trading company to increase profits which would then be donated to the charity as well as undertaking a detailed review of operational costs.
rmclaren@thecourier.co.uk