The year ended with a revue, “And Now at Last the Nibble Nobby's Nuts Show”, devised and directed by Rodney Delaney (who was also in the cast) and, by day, Matthew O'Sullivan's adaptation (he also directed) of “Winnie The Pooh”. The company comprised a core group of five people – Rodney Delaney and Matthew O'Sullivan (the two artistic directors), administrator Michael Tobin, Sonia Lester (public relations and marketing) and stage manager Tony Wright (who also directed “The Happy Apples”). Guest directors were hired for ”Hamlet”, “Lunchtime Concert” and “Waiting for Godot”. The company went into its third year with a major reconfiguration of the acting space. A triangular stage was created in the centre of the hall with raked bench seating on two sides, seating approximately 100 people. The year began with a revival of Harold Pinter's “The Caretaker” in March, directed this time by Alan Faulkner, but the repertoire system of two plays was resumed in June with “The ‘Naked’ Hamlet”, Joseph Papp's radical reworking of “Hamlet”, and Tom Stoppard's “Rosencrantz and Guildenstern Are Dead”. The latter play hadn't been seen in Sydney since its original production and became one of the company's biggest successes. Both plays were directed by Rodney Delaney with a total of twelve actors - the largest casts employed so far. The cast played the same roles in both productions with Peter de Salis as Hamlet, Les Asmussen and Scott Lambert as Rosencrantz and Guildenstern. September and October saw a children's play, “The Tails of Koalaroo” during the day, and Ibsen's “Ghosts” and “City Sugar” by Stephen Poliakoff with Bevan Wilson(another Australian premiere) alternating at night. November–December brought another Pinter play, the Australian premiere of “No Man's Land” with Rodney Delaney directing veteran British actor Alexander Archdale. Shakespeare's "Othello" was the opening production of 1978, and Matthew O'Sullivan's final production as co-artistic director. The eight-week season was almost booked out before it opened but a huge fire in the block behind the Ultimo theatre forced the closure of the building for some weeks.