Profit line has Western Bulldogs barking

[The Coon Dog]

* Damian Barrett
* From: Herald Sun
* December 04, 2009 11:18PM


THE Western Bulldogs have registered their third consecutive operating profit.

Figures released by the club last night revealed an operating profit of $820,204 on the 2009 season.

"The Western Bulldogs are on the way to being financially viable, and 2010 will see a key focus on the completion of the (Whitten Oval) redevelopment and debt-reduction strategies," chief executive Campbell Rose said.

The result follows profits in 2008 ($600,000) and 2007 ($500,000).

Article in full...

[Wing_Nut]

Good result for the dogs there.

Interesting to note the focus next year will be debt reduction strategies. Anyone aware of our current situation in that area?

[divvydan]

Good result for the dogs there.

Interesting to note the focus next year will be debt reduction strategies. Anyone aware of our current situation in that area?

According to the balance sheet, current liabilities stand at $19.579m, of which $6.59m is for trade creditors (some of that will be Whitten Oval related) and $12.5m is for Westpac which are secured fully drawn commercial bills which is secured by two lots of $5m guarantees, one over the club and another over the AFL.

Current limit for the Bills are $13m so we're close to that threshold and have currently only been paying back interest. Interest came to about $427k for the 2009 year.

[divvydan]

Can't seem to edit so doing so here.

Edit: Looking back at the 2008 Financial report, the Westpac 'loan' went from $4.65m to $12.4m, with the added security of; "(3) a further guarantee and
indemnity Ltd to $8,000,000 by the AFL in favour of the Westpac Banking Corporation based on future
redevelopment funding agreements."

So around $8m of the $12.5m total liability is relating to the redevelopment.

[alwaysadog]

Can't seem to edit so doing so here.

Edit: Looking back at the 2008 Financial report, the Westpac 'loan' went from $4.65m to $12.4m, with the added security of; "(3) a further guarantee and
indemnity Ltd to $8,000,000 by the AFL in favour of the Westpac Banking Corporation based on future
redevelopment funding agreements."

So around $8m of the $12.5m total liability is relating to the redevelopment.

So DD the club has signaled an intention to reduce its “debt” of around $4.65m.

In looking ahead to assess the likelihood of achieving that aim there appears to be few if any probable negative impacts to consider and even without the Edgewater facility the following factors are likely to contribute positively
1) The Australian economy continues to strengthen
2) Revenue increases from sales of memberships /packages etc with continued on field success
3) Direct revenue increases with the better stadiums deal, although this might cancel out monies from the AFL Equalisation Fund
4)The completion of the rebuilding of the WO brings on line new revenue streams

While some of the above assumptions may not be realised a more favourable environment for the club appears likely and the aim of debt reduction realistic. On the other hand it is too early to determine if the club will reach the point when it no longer needs to draw on the AFL Equalisation Fund.

[Remi Moses]

noticed the obligatory negative comment from some pilick who no doubts follows one of the big clubs! Just wondering what they're going to ''Bang on about'' when the equalisation fund goes. No doubt they'll find something to moan about

[divvydan]

So DD the club has signaled an intention to reduce its “debt” of around $4.65m.

In looking ahead to assess the likelihood of achieving that aim there appears to be few if any probable negative impacts to consider and even without the Edgewater facility the following factors are likely to contribute positively
1) The Australian economy continues to strengthen
2) Revenue increases from sales of memberships /packages etc with continued on field success
3) Direct revenue increases with the better stadiums deal, although this might cancel out monies from the AFL Equalisation Fund
4)The completion of the rebuilding of the WO brings on line new revenue streams

While some of the above assumptions may not be realised a more favourable environment for the club appears likely and the aim of debt reduction realistic. On the other hand it is too early to determine if the club will reach the point when it no longer needs to draw on the AFL Equalisation Fund.

Would expect that the income generated from the Whitten Oval development will be what goes into reducing the debt. The current on field success will ensure at least the same sort of income from gate/membership/hospitality, however, this and the $100k payments as part of the stadium equalisation deal will almost certainly go on the gradual increases in salary cap, staff salaries and other on field related expenses.

Exactly how much the new revenue streams bring in by way of net profit is difficult to know. The new childcare centre will be more community orientated than profit orientated, which is a good thing but doing so slightly reduces the money from it. We expect to receive a grant from Vic Uni once their students start using the facilities so that can go towards it. With Vic Uni students/staff in and around the Whitten Oval, the new licenced restaurant should also start making reasonable money.

The other thing that I'm not entirely sure of is are we being expected to pay back that $8m or if the AFL pay that back, not really sure how it works. With interest probably going to be around $500k/year, I'd want the club to try and pay back around 10% of the debt per year. There still needs to be gradual increases in football department spending so a delicate balance between the two are needed.

[alwaysadog]

The other thing that I'm not entirely sure of is are we being expected to pay back that $8m or if the AFL pay that back, not really sure how it works. With interest probably going to be around $500k/year, I'd want the club to try and pay back around 10% of the debt per year. There still needs to be gradual increases in football department spending so a delicate balance between the two are needed.

I saw no mention in the costings provided before the project was launched of us raising anything more than the $3m that the Forever Foundation committed to and we are told have already raised. I'd be shocked if we committed ourselves to repaying such a large sum. It looks like money we needed to advance and will be refunded by either the AFL or govt in the fullness of time.

I agree about the balance needed and the 10% target. We have managed to get into a profit situation while expanding football dept costs, it would be foolish to jeopardise that now.

[alwaysadog]

noticed the obligatory negative comment from some pilick who no doubts follows one of the big clubs! Just wondering what they're going to ''Bang on about'' when the equalisation fund goes. No doubt they'll find something to moan about

Envy takes many forms and never runs short of a convenient rationalisation.

[Remi Moses]

Envy takes many forms and never runs short of a convenient rationalisation.

Yes and if we were booted out they'd be moaning like stuffed pigs about the injustice of having to play Freo and Port and low drawing interstate sides more often. Also perish the thought of then having to travel more often

[alwaysadog]

Yes and if we were booted out they'd be moaning like stuffed pigs about the injustice of having to play Freo and Port and low drawing interstate sides more often. Also perish the thought of then having to travel more often

You can bet they don't envy the travel we do.

[bornadog]

Rose's next big target MUST be debt reduction.

[GVGjr]

Rose's next big target MUST be debt reduction.

Agreed. Paper profits mean little if we can't start clearing the debt. We still have a long way to go.

[alwaysadog]

Agreed. Paper profits mean little if we can't start clearing the debt. We still have a long way to go.

Setting the base for the turnaround in our finances has been the biggest job and provided the base is as firm as it appears we should be able to meet at least a 10% annual repayment.

Any company that I've been on the board of that experienced a similar change to its fortunes would have regarded it as a miracle.

Debt reduction has been set as the next target, it looks doable based on the current position of the club... but until it's repaid the money we owe is a millstone around our collective neck.

[LostDoggy]

Great news to record a profit for the third year running.