One-Eyed Richmond Forum
Football => Richmond Rant => Topic started by: one-eyed on December 08, 2009, 12:03:29 PM
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From the 2009 Annual Report...............
Treasurer's Report
On behalf of the Board, I am pleased to present the Club's financial report for the year ended October 31, 2009.
It is pleasing to report that the consolidated entity has recorded a net profit of $1,590,755.
The Club has now recorded profits for the past five consecutive years.
Year Net profit/(loss) '000
2009 1,591
2008 8,010
2007 1,031
2006 949
2005 41
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Importantly, the Club has been able to achieve this significant, sustained increase in profitability, while increasing Football Department expenditure by $4 million between 2005 and 2009.
Year Football dept expenditure ('000)
2009 14,224
2008 13,247
2007 12,000
2006 10,802
2005 10,277
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As at October 31, 2009, the Club has net assets of $10.45 million, which is a significant improvement on previous years.
Year Net assets ('000)
2009 10,449
2008 8,858
2007 848
2006 (183)
2005 (704)
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The Board communicated to members five years ago a clear direction to create a strong, sustainable financial position for the Club to achieve long-term success, both on and off the field. In each of the
past five years, we have taken a significant step towards that objective. This year, the collective efforts of many Richmond people have enabled the Club to raise the necessary capital to start the long-awaited
Punt Road redevelopment, and to commit to a significant investment increase in our football department that is sure to reflect positive returns in the short term. This year's net profit result, along with the investments we have made, again reaffirms the Board and management's commitment to this plan, and the finance and governance principles that were established to support our operations.
The 2009 profit and continued growth in net assets is an excellent result for the Club, particularly given our on-field results this year and the difficult economic conditions that have prevailed. The ability to generate a profit under such circumstances highlights the continued dedication of our members, staff, players, sponsors, coterie members, donors and supporters.
Governance
The Board Audit and Risk Committee operates under a charter approved by the Board. It is the Board's responsibility to ensure an effective internal control framework exists within the entity and that all risks identified are continually reviewed, and mitigating controls implemented, where appropriate, to minimise any potential impact on the on-going operations of the Richmond Football Club. The Committee previously developed a comprehensive risk review, which has been adhered to during the past five years.
In 2009, the Audit and Risk Committee has continued its extensive Risk and Corporate Governance program to ensure the Richmond Football Club maintains the highest possible level of Corporate
Governance in the AFL.
During the year, the Club's Audit and Risk Committee again liaised closely with the AFL's Risk Manager on the significant developments the AFL has undertaken during the past 12 months in the area of
Risk Mitigation for league clubs.
In 2009, the Audit and Risk Committee conducted a review of the following key operational areas.
• Gaming & Licensed Venues
• Occupational Health and Safety
° Training and Match Day Venue
° Player Welfare and Injury Management
• Data Security
• Thorough consideration of issues associated with our redevelopment of Punt Road Oval
• Key Management Orientation
The 2009 Committee comprised Mr R. Dalton (Chairman), Ms P Haines (Director), Mr J Matthies (Director) and Mr A Sloman (Committee Advisor). Mr Sloman is a partner at Deloittes Chartered Accountants, specialising in internal Audit and Risk management within the sporting industry. The Club's Chief Financial
Officer, Mr M Stahl, and a representative of PricewaterhouseCoopers (the Club's auditors), were also attendance at appropriate meetings.
Rob Dalton
Treasurer
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Thanks for posting this, OE.
I downloaded the Concise Financial Report, dated 31 OCtober 2009, and noticed on page 2 that it says in the second paragraph,
"The loss relating to operations excluding the impact of the redevelopment grants and one-off items is $244,245 (2008: profit $394,724)"
Is there any concern that we actually made a trading loss this year, and that our result was actually $639,000 worse than last year?
I think we need to exclude all these redevelopment grants and actually look at the baseline operations of the club, rather than congratulating ourselves on a questionable profit figure.
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Thanks for posting this, OE.
I downloaded the Concise Financial Report, dated 31 OCtober 2009, and noticed on page 2 that it says in the second paragraph,
"The loss relating to operations excluding the impact of the redevelopment grants and one-off items is $244,245 (2008: profit $394,724)"
Is there any concern that we actually made a trading loss this year, and that our result was actually $639,000 worse than last year?
I think we need to exclude all these redevelopment grants and actually look at the baseline operations of the club, rather than congratulating ourselves on a questionable profit figure.
well if you're going to do that then might as well not include sponsorships (DS and LB) as well :help
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Is there any concern that we actually made a trading loss this year, and that our result was actually $639,000 worse than last year?
I think we need to exclude all these redevelopment grants and actually look at the baseline operations of the club, rather than congratulating ourselves on a questionable profit figure.
Muscles, from an accounting point of view the government funding must be included as it is revenue the club received.
However, I must say that I am disappointed that we have made an operating loss on our core activities.
Am I concerned by it? As a one off NO but the Club must make sure it is just that a one off. I would want to see the full financials as they would shed alot more light on things than the concise report does.
We get critical of the say the Bulldogs when they announce a profit of $800K that is exist because they get $1.5k from the AFL. I think we need to to bare in mind that without the state govt money we would have made a loss this year
well if you're going to do that then might as well not include sponsorships (DS and LB) as well :help
Sorry tigertough12 - you are not comparing apples with apples as they say. Sponsorship revenue is used and allocated to the day to day running of the club, just like membership $$$$ are.
The govt grants are for a specific purpose (the redevelopment) and cannot be used for anything else but the redevelopment.
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Agree, WP.
Section 4 on page 13 of the report more or less states that the revenue that saved us from an operating loss was tied to the Punt Road Redevelopment.
So when we pay that money to the developers next year, or whenever we get the invoice, would we class it as an expense or an asset? An asset, I guess?
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So when we pay that money to the developers next year, or whenever we get the invoice, would we class it as an expense or an asset? An asset, I guess?
Yep Muscles - it will be an asset
:thumbsup
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An asset in more ways than one, I suspect, WP. ;)
And then I noticed that our Interest Bearing Liabilities increased by just over $500k in the last year. We still owe something close to $5m.
I thought we were working towards reducing these liabilities? I understand that having some debt is good management practice, providing that you can service it, but are we heading in the right direction?
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The loss is disappointing operations wise but if its a 1 off then ok, I havent seen the accounts, but if we still owe around $5 million then that would be a major cause for concern.
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The report's available on the RFC website, Ramps. It's about 3mb, so it took a while to download. I think I'm reading it correctly.
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An asset in more ways than one, I suspect, WP. ;)
And then I noticed that our Interest Bearing Liabilities increased by just over $500k in the last year. We still owe something close to $5m.
I thought we were working towards reducing these liabilities? I understand that having some debt is good management practice, providing that you can service it, but are we heading in the right direction?
And yet our borrowing costs reduced by nearly 30% - go figure. I'm not nearly qualified enough to look through the trees for the woods so I have to use my layman's instinct and say that these figures look ok for a professional supporting club coming off the back of a filthy season in the middle of the global financial crisis trying to recover from a near bankrupt experience and increase expenditure in an effort to remain competitive and become more successful.
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And then I noticed that our Interest Bearing Liabilities increased by just over $500k in the last year. We still owe something close to $5m.
I thought we were working towards reducing these liabilities? I understand that having some debt is good management practice, providing that you can service it, but are we heading in the right direction?
2 points:
1/ Yes there has been an increase in current liabilities of around $500K but our current assets have increased by $1.5mil so one increase is offset but the other 3 times over. I would only be concerend if the Current assets went down while the liabilities went up
2/ Yes interest bearing liabilities has gone but the question is why? Again because the numbers are from the concise financials the info available is limited. Most businesses run on having short term finanacing (commercial bills). If this is a short term borrowing at the end of October that was repaid in early November then it becomes a non-issue. As with most things accounting it can come down to timing.
I have no doubt we are heading in the right direction. The club is easily servicing the debt
I intend to get a copy of the full financials for a bit of light reading and to get answers to some of my questions
From a professional point of view and based on what I've read so far I think the Club is in a very solid position financially
The loss is disappointing operations wise but if its a 1 off then ok, I havent seen the accounts, but if we still owe around $5 million then that would be a major cause for concern.
Again I say from my point of view (and this is what i do for a living ;D) I don't see it as major cause for concern.
If you look at the Cashflow statement it clearly shows that during the course of the year we took out $4.9mil in commercial bills and repaid $4.4mil so this demonstates to me that the commerical bill situation is a short financing option, which as I said earlier is quite common for businesses to operate under especially those revenue is seasonal which is the case with Football Clubs
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I'd take a guess we won't start eating into this $5m liability until after all the construction at Punt Road and Craigieburn is completed in a year's time. Didn't the Club have to put some of its own money ($2m?) towards the redevelopment?
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Adelaide had a significant fall in profit so even a wealthy club like the Crows didn't find 2009 easy with the effects of the GFC.
http://www.theage.com.au/afl/afl-news/crows-post-reduced-surplus-20091208-khlb.html
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I'd take a guess we won't start eating into this $5m liability until after all the construction at Punt Road and Craigieburn is completed in a year's time. Didn't the Club have to put some of its own money ($2m?) towards the redevelopment?
Yep the Club had to find the balance of the $$$ for the re-development at Punt Road (NB: the RFC are not contributing any $$ to Craigieburn) but this will come mainly from contributions to the JD Foundation. But agree MT that while the re-develpoment ios going on if there is a short fall the Club will need to Fund it
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Adelaide had a significant fall in profit so even a wealthy club like the Crows didn't find 2009 easy with the effects of the GFC.
Bloody Geelong. 8)
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Again I say from my point of view (and this is what i do for a living ;D) I don't see it as major cause for concern.
If you look at the Cashflow statement it clearly shows that during the course of the year we took out $4.9mil in commercial bills and repaid $4.4mil so this demonstates to me that the commerical bill situation is a short financing option, which as I said earlier is quite common for businesses to operate under especially those revenue is seasonal which is the case with Football Clubs
WP, I kind of got the impression that you might be commenting from a position of having expertise in the area. I would have liked to see the debt paid down by some amount, but I accept that the reality of bad on-field performances coupled with paying out of the previous coach's contract all has an impact on financial reality.
I also take MT's point about not paying down the debt whilst rebuilding our facilities and bringing up to a modern competitive standard.
Good discussion nevertheless and makes me feel more comfortable about the financial position of our club.
Shame we never found out more about the future vision and directions of our Board candidates, but that's for another discussion.
Cheers
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I'd take a guess we won't start eating into this $5m liability until after all the construction at Punt Road and Craigieburn is completed in a year's time. Didn't the Club have to put some of its own money ($2m?) towards the redevelopment?
Yep the Club had to find the balance of the $$$ for the re-development at Punt Road (NB: the RFC are not contributing any $$ to Craigieburn) but this will come mainly from contributions to the JD Foundation. But agree MT that while the re-develpoment ios going on if there is a short fall the Club will need to Fund it
Ta WP. I see North are now going to focus on reducing their debt now that their new facilities are completed. I'd take a guess we'll probably follow a similar path in a year's time when both Punt Road and Craigieburn are finished.
LOL FF :wallywink