Club Financial Report Released

[LostDoggy]

A net operating loss of $136,679

Understandable given drop in membership and attendance.

[G-Mo77]

Re: Club Financial Report Released

Not the best news and not terribly concerning. Are we prepared to take a hit like this and maybe more over the next few years?

I think the biggest mistake we made in terms of memberships is giving supporters false hope. Admit the rebuild, focus on advertising our youth and development and work it from there. It seems they've already started that this year.

[Dazza]

Re: Club Financial Report Released

could someone explain the debt to me?

[Evel]

Re: Club Financial Report Released

could someone explain the debt to me?

Debt has reduced from 31 October 2011 by approx $350k to sit around $5.5million. It appears through necessity that the club has refinanced $1.6mill of last years debt to allow for a greater repayment period as the entire amount was considered current at 31 October 2011. It could explain the increased interest payments as the club is reliant on AFL support to continue as a going concern which means lenders won't carry the risk without charging a fair premium for it.

Hope this answers your question adequately. Still working through the report so others may be more advanced and able to give greater insight.

[Prince Imperial]

Re: Club Financial Report Released

It's difficult for the club make an operating profit due to over 800k of depreciation for the Whitten Oval development being included so in the circumstances a 136k loss isn't too bad.

From my reading of the report there are three matters of concern.

The first is membership. Understandably revenue in this area fell 350k. However, the report also reveals that membership expenses increased a whopping 700k. I'm aware that the club moved membership processing from the AFL to the club during the year but this seems on these raw figures to have been a complete failure. I can't attend the AGM but I think the board needs to give an explanation of what has gone on here. Maybe it's in part due to one off set up costs or a change in allocation of some of the expenses which had previously been under the business development and communication items.

The second is Edgewater and gaming machine entitlements. The club has over $4m in liabilities relating to these entitlements with the majority of these earmarked for Edgewater. The value of the 10 year entitlements are reducing every day. The opening of this venue and these entitlements producing some revenue is therefore critical. Whilst the report suggests that the venue will open at the end of 2013 it then seemingly directly contradicts this by stating that the completion of the development is expected in early 2014. Given this and the past delays this does not fill me with confidence.

The third is consumer products which made a loss in 2012 and which still has a very high level of inventories. Not really good enough for a business that operates without rental costs.

The business development area seems to have had a better year, which reflects the increased Mission and Worksafe sponsorships and SpiritWest delivered a substantially improved result so there are some positives.

[comrade]

Re: Club Financial Report Released

Thanks for that PI, appreciate the explanation.

How much of the 10 year gaming machine entitlements have already passed?

[Prince Imperial]

Re: Club Financial Report Released

Thanks for that PI, appreciate the explanation.

How much of the 10 year gaming machine entitlements have already passed?

The entitlements began from August 2012 so at the moment not much in total but each day they diminish in value.

[boydogs]

Re: Club Financial Report Released

It appears through necessity that the club has refinanced $1.6mill of last years debt to allow for a greater repayment period as the entire amount was considered current at 31 October 2011.

We borrowed $1.5m for the Peninsula club

[Bornadog]

Re: Club Financial Report Released

If we had an operating loss of $136k and there is $800k of depreciation included, then on a cash basis we have made a surplus? Is this true?

[Evel]

Re: Club Financial Report Released

We borrowed $1.5m for the Peninsula club

The cash flow statement indicates that these funds were drawn down during the 2011 year. I don't have a copy of last years accounts on hand so can't verify the accounting treatment.

[Cyberdoggie]

Re: Club Financial Report Released

I'm interested to see the increased $'s in the football department.
We've hired several new staff, and will end up having to field our own vfl side in 2014.

[Prince Imperial]

Re: Club Financial Report Released

If we had an operating loss of $136k and there is $800k of depreciation included, then on a cash basis we have made a surplus? Is this true?

I think this is correct, though I would caveat that I am not an accountant. Looking at the Statement of Cash Flows it looks like the cash position of the club improved by about 370k.

[LostDoggy]

Re: Club Financial Report Released

However, the report also reveals that membership expenses increased a whopping 700k. I'm aware that the club moved membership processing from the AFL to the club during the year but this seems on these raw figures to have been a complete failure. I can't attend the AGM but I think the board needs to give an explanation of what has gone on here. Maybe it's in part due to one off set up costs or a change in allocation of some of the expenses which had previously been under the business development and communication items.

If it results in better value to our members, more control, etc. then I think it's a sound investment. It's certainly not the reason memberships dropped so it's hard to criticise the figure on its own.

[comrade]

Re: Club Financial Report Released

I think this is correct, though I would caveat that I am not an accountant. Looking at the Statement of Cash Flows it looks like the cash position of the club improved by about 370k.

Considering the year we had, not a bad result overall.

Next year will be interesting. You would assume membership will be flat or down and there has been an increase in footy spending (though was this fully/partially funded by Gordon and others?). Costs related to preparing for our own VFL team in 2014 will also be accounted for.

[LostDoggy]

Re: Club Financial Report Released

This may be repeating my previous post on this topic, and I realise our fragile financial position, but things like fielding our own team, bringing memberships in-house, things that grow and strengthen the club would surely be seen as investments rather than just liabilities? Good debt vs. bad debt?