TREASURER'S REPORT
The consolidated entity has recorded a loss of $2,194,974.
The following table presents a review of the Club's trading performance during 2003 and 2004.
Importantly, the 2005 budgets are included.
| 2003 | 2004 | 2004 | Variance | 2005 |
| Actual | Budget | Actual | Fav/(Unfav) | Budget |
| $M | $M | $M | $M | $M |
| Football Income | 4.2 | 4.8 | 4.5 | (0.3) | 4.6 |
| Membership Income | 3.6 | 4.3 | 4.1 | (0.2) | 4.2 |
| Match Day Income | 1.3 | 1.4 | 1.7 | 0.3 | 1.6 |
| Merchandise Income | 0.2 | 0.2 | 0.2 | 0.0 | 0.2 |
| Corporate Income | 4.6 | 5.5 | 3.9 | (1.6) | 4.3 |
| Event & Function Income | 1.1 | 1.3 | 1.2 | (0.1) | 1.2 |
| Other Income | 0.5 | 0.3 | 0.1 | (0.2) | 0.0 |
| Communication Income | 0.3 | 0.3 | 0.3 | 0.0 | 0.3 |
| Total Income | 15.9 | 18.1 | 16.0 | (2.1) | 16.4 |
| Football Expenditure | 10.2 | 10.1 | 10.6 | (0.5) | 9.8 |
| Membership Expenditure | 1.6 | 2.3 | 2.2 | 0.1 | 1.7 |
| Match Day Expenditure | 0.1 | 0.1 | 0.1 | 0.0 | 0.1 |
| Corporate Expenditure | 2.2 | 2.4 | 2.0 | 0.4 | 1.7 |
| Event & Function Expenditure | 0.7 | 0.5 | 0.6 | (0.1) | 0.6 |
| Other Expenditure | 0.5 | 0.6 | 0.5 | 0.1 | 0.5 |
| Communication Expenditure | 0.4 | 0.4 | 0.3 | 0.1 | 0.2 |
| Property | 0.6 | 0.7 | 0.7 | 0.0 | 0.7 |
| Administration | 1.1 | 1.2 | 1.5 | (0.3) | 1.6 |
| Total Expenditure | 17.4 | 18.3 | 18.5 | (0.2) | 16.9 |
| Surplus / (Deficit) | (1.5) | (0.2) | (2.5) | (2.2) | (0.5) |
| Social Clubs (1) | 0.2 | 0.4 | 0.1 | (0.4) | 0.2 |
| Operating Profit / (Loss) | (1.3) | 0.2 | (2.4) | (2.6) | (0.3) |
| JDF Net Income | 0.5 | 0.2 | 0.2 | 0.0 | 0.1 |
| Net Profit / (Loss) | (0.8 ) | 0.4 | (2.2) | (2.6) | (0.2) |
(1) Income from Social Clubs accounted for on a nett basis.
It should be noted that the loss was communicated to members in June.
As a result of the actions undertaken by the Board, there has been no
significant increase in the extent of the loss, despite poor on-field
performances during the 2004 season.
KEY 2004 VARIANCESA summary of the key variances between the 2004 budget and the actual result are as follows:
| Variance | Reason |
| Fav/(Unfav) | for |
| $M | Variance |
| Original 2004 | 0.4 | |
| Forecast Surplus | | |
| Significant Variations | | |
| Football Income | (0.3) | Optimistic revenue targets
associated with the sale of
football "experiences".
Revenues were also
negatively impacted upon
by poor on-field performance. |
| Match Day Income | 0.3 | Conservative forecast match
day attendances were
exceeded. |
| Nett Corporate Income | (1.1) | Optimistic revenue targets
associated with sales of
sponsorship, coteries, and
corporate hospitality.
Revenues also negatively
impacted by poor on-field
performance. |
| Nett Event & Function Income | (0.3) | Optimistic revenue targets,
particularly related to Grand
Final week activities. |
| Football Department | (0.5) | Higher player and staffing
Expenditure costs than forecast. Player
and registration fees exceeded
budget as a result of the youth
policy adopted. |
| Administration | (0.3) | Finance costs exceeded
Expenditure budget as a result of extended
overdraft facilities. |
| Nett Social Club | (0.5) | Proceeds generated from
Income gaming continue to decline in
line with overall market
conditions. In 2001, the Club
generated net income in
excess of $800,000 from
gaming activities. In 2004,
gaming activities generated
net income of $85,000. |
| Other Variances | 0.1 | |
| 2004 Loss | (2.2) | |
2.5% which is less than the projected Consumer Price Index
for the year.
The forecast result for the year ended 31 October 2005 is a
loss of $150,000, which represents an improvement of over
$2 million on the 2004 result.
The Directors are of the view that the forecast position is
almost a "worst-case" scenario. Importantly, the targets will
eliminate the heavy financial losses incurred in 2004.
Other actions that have been, or are in the process of being,
undertaken by the Board and Senior Management include:
* The implementation of enhanced processes and controls
over expenditure authorisation to ensure that the 2005
targets are effectively monitored.
* An organisational restructure to provide clearer lines of
reporting and accountability.
* A restructure of the Club's committee structure to
provide improved Governance over the operation of the
Club.
The detailed cash flow forecasts, supporting the 2005
targets, have the Club operating within a level that can be
supported by the existing bank security (that is, an AFL
redirection order).
As referred to above, representatives of the AFL have worked
closely with the Club in the completion of the Crowe Lovett
consultancy and in supporting the Club in its overall
endeavours to significantly improve all facets of our
operations. The Directors are grateful for the support
provided.
Whilst the Club is economically dependant on the ongoing
financial assistance of the AFL, it should be noted that the
security provided by the AFL (in the form of a redirection
order) is not an advance of funds, but a commitment to our
financiers of annual distributions that would be received by
the Club in the normal course of operations.
The Club has not sought to access the AFL's Competitive
Balance Fund and the Directors are confident that there will
be no necessity to do so, however the AFL has confirmed it
could provide access to this fund if the Club makes an
application and meets the required conditions.
_____________________
GARRY CAMERON
Treasurer
