Club Reports a $80,257 Loss for 2016

[bigtigercasey]

The operating profit was actually $1.2m

The loss comes about after claiming Amortisation and Depreciation. Businesses of all sizes make these claims as legitimate tax deductions. Same as claiming laundry expenses on your tax or depreciation on your car for using it for work related matters.

Given we have up graded the buildings at Punt Road and the ground work there would be plenty of areas to claim big time on depreciation. Haven't seen the actual financial statements but suspect these areas contributed to the result.

One smallish loss after 11 years of profit does not trigger bankruptcy.

You are correct but and it's an important but

Every year there is depreciation and amortisation costs, that is not in dispute

However, when the club makes a profit; let's call it bottom line profit to keep it simplistic. It has never said we've made an operating Profit of say $3mil but after deprecation & amortisation the "bottom line" profit is $800k... it is simply announced we made a $800k profit

This year for whatever reason they have decided to make the distinction which is IMV a poor way to do it because it has created unnecessary & extra noise around the number

What they should have said again IMO is "we've made a loss of $80k which includes extra amortisation costs for the new Fitness business venture at Cardinnia Shire. Doesn't try and distort the numbers just highlights and explains an increase in expenditure due to business changes

Good points WP. I too am keen to see what the full concise financials will describe, or what will be further discussed at the AGM.

FWIW, there are some worrying signs though:
Year: ....Profits........Assets/Cash
2014 .....$1.3M........29.3 M (3.8 cash)
2015 .... $0.5M........29.4 M (4.3 cash)
2016 ....$(80K)........24.1 M (2 cash)...24.1 M  (2 cash)

Revenue grew 1.7% on the back of 2% growth in memberships.

There is revenue growth, as would be expected with the continued surge in member numbers. There are also some underlying concerns. Net assets decreased significantly, as did the cash balance. Simplistic analysis would suggest that there has been an increase in cash burn for expenses, but not in the acquisition of assets.

My guess is that there has been a significant write-down of some form.

Cheers

EDIT:

I have reported the wrong numbers for 2014 and 2015 in terms of asset position. The numbers above for those two years are gross asset position not net.

the correct comparison with 2016 is as follows:

Year:___Profits___Net AssetsAssets
2014 .....1.3M........23.7 M (3.8 cash)
2015 .... .5M..........24.1 M (4.3 cash)
2016 ..... (80K)......24.1 M  (2 cash)

Apologies for the confusion that may have caused. Certainly not an attempt to misrepresent.

Cheers

[Yeahright]

Sorry about the length but I am feeling the need to vent. Probably like a lot of us.   

We appreciate the grammar. Rant away!

Edit: Just saw your sook at my other two replies (one not even been directed at you ) so I should make it clear, this post is genuine

"appreciate the grammar." ??????????????????
"Just saw your sook" ????????????????????

Diddums, give it a rest already.

I think you need to chill out man, stop trying to take issue with everything I've posted today. I was being genuine (as I clearly stated ) that most here are happy to read a rant especially when they use grammar (the correct way to spell it so not sure what you're trying to say). When you don't then that's when people don't care to read it

[big tone]

All good agree with the above. With so many new shiny things around Punt Road the depreciation expense should be higher than past years and the amortization of costs in the Fitness Centres is also new.

Cant really be bothered actually looking at the financial statements for the past few years but I am not overly worried by a smallish loss this year when budgets would have been made on the assumption of a good year most likely with us reaching the finals.

The main thing will be that the next year budgets are worked on the lower income expectations and the club returns to a profit, which will be acceptable.....unless we make a loss for paying out Hardwick (but that would still be acceptable.....as long as someone from the Board takes responsibility and resigns.)

You're spot on with you comments about the way the budgets were most likely set

I know people are saying they can't understand how a club with 70k members and a turnover of $40+mil can make a loss and I know I made a comment a few backs about quite easily but it is actually true (doesn't make it acceptable but explainable)

But really it is simple: Example A really on the back of the on field especially the drop in crowds the bottom line is going to take a hit. You budget for say 75k-80k for a home game against the Pies and you get less than 70k your going to cop hit, a six figure one I reckon. Both games against the Bombers where we share the 2 gates, crowds way down (especially Dreamtime) again another hit.

Then you have all your expenditure forecast based on those revenues so you don't hit all your revenue targets you are going to fall short. Again, without knowing the budgeting process or having access to the final numbers I would think the costs were reigned in the 2nd half of the season when they knew they we were going to fall short. Meaning the loss is mitigated. Left unchecked the result could have been a lot worse and then we would really have something to complain about

And (again) you are spot on re your comments about budgeting for 2017. It definitely needs to be in line with lower revenue expectations than 2016. Because I think everyone is smart enough to realise that on the membership front in particular they will take a hit..how much is the question

Surely with a business the size of the RFC losing a few extra games and having the crowds down shouldn't hurt our bottom line as much as they have. We obviously should have more definite, non on field footy related ways of making money regardless of how on footy side is doing. Our sponserships for the 2016 season should have been a hell of a lot better coming off 3 finals series than they obviously were. This is clearly a board problem which is why I don't  understand how they continually get a pat on the back for doing such a good job and no changes are made. God knows where we would be if were didn't make finals the previous 3 years to get our members signing up by the thousands. IMO we rely on membership and donations way to much. They should be the icing on the cake after all the other stuff.

[the claw]

2017 will be even worse with a lot of members like myself not renewing. I have had enough of the club being incompetent and the blind faith has worn thin for me.
I personally don't care who is president or who is on the board but I do expect us to make money and I do expect us to improve our onfeild proformances from the last 30 odd years.
2016 has been a disgrace and IMO the club hasn't made enough changes to remedy the situation. Getting rid of assistant coaches and bring in Balme and basically making minimal changes to our list isn't going to get the job done.

I must admit I'm really peeed off at our current club and the way it's taken away my passion for supporting it. I've never in all my years been so  disillusioned with the RFC.

Okay.
I really hear you and understand where you're at.
This gives me a chance to say some things which I've thought about over the last day or so.
One of my last posts was a bit overwrought but describes a similar spot to where you are at.

I believe this is one of the last chances for us members to turn things around and avoid becoming a middling club forever.
I have posted (a lot) about the various moves the board has made.
Most of these moves however really come back to how the board shapes it's "ethics".
Despite what I've posted, there is nothing inherently wrong with the Nominations Committee, Election By-Laws or constitutional amendments.
It's simply how they're used in practice to IMO subvert the members will or even allow members to participate fully.

This year we have the chance through strong board candidates to make the first move.
If Casey and Wallace remove Ryan and Dunne, I think it will send a strong message to reform the way the club operates.
With only two positions each year it may need another election or more to FORCE change.
If they do not succeed then I think we are in for more of the same, despite director limits.

The club has made moves to subtly change the footy department.
- Bringing in Balme is a good move.
- Shifting Richardson sideways can be a good move.
- Coaching changes at least show an awareness of a problem
- List Management remains a worry with lack of key players and a seeming lack of an overall list plan.
- The slight changes in Recruiting are underwhelming.
- Medical and Fitness seem to have not been improved at all.

Next season will show whether these changes are enough to shift direction or, as I suspect, fail to be enough.
Just as an aside on List Management I think we missed a huge chance to fundamentally alter our thinking.
IMO, we should have delisted Maric, Batchelor, Lambert and Butler allowing us to improve our list short-term by bringing in Barlow and Richards. A missed opportunity.

With the coaching and List changes I would like to see more empowered players, excited to be involved at the highest level, aware of the huge chance to set themselves up for life and appreciative of the benefits they have now and into the future. A big part of this will be the senior players driving this attitudinal re-set.

I would like to see us take big, strong, athletic, key players in the draft with an even greater chance to do this next year.

We will have to wait and see how the changes this year will affect next year and beyond.

If these benefits do not come with our present staff they can be moved on next year after an intensive search for alternatives.

But we have the chance this year to START the process.
Don't give up now.
Buy a membership next year and push for improvement.

If it's just more of the same then I'll be with you.
Out the door and never looking back.

Sorry about the length but I am feeling the need to vent. Probably like a lot of us.   

Another great post Redan.

Join the club i have been in that place for many yrs now.
Strangly as a person who does not tolerate imbeciles and incompetence in real life i put up with it in my club.

[Penelope]

I wonder how many people here actually understand what amortisation and depreciation are?

It seems Gracies does.

It is also a lot harder to get convince businesses to sponsor sporting clubs than it was two years ago, and i suspect it is going to get worse before it gets better

[WilliamPowell]

I wonder how many people here actually understand what amortisation and depreciation are?

It seems Gracies does.

It is also a lot harder to get convince businesses to sponsor sporting clubs than it was two years ago, and i suspect it is going to get worse before it gets better

Think you are right regarding sponsorship.

Market in Victoria now is tougher than it's every been

10 AFL clubs, 1 NRL club, 2 FFA clubs, 1 national mens basketball team,  the AFL women's teams, 1 ABL team, and that's only top tier teams.

Crowded market all chasing the same thing.. tough, extremely tough

[Hard Roar Tiger]

The operating profit was actually $1.2m

The loss comes about after claiming Amortisation and Depreciation. Businesses of all sizes make these claims as legitimate tax deductions. Same as claiming laundry expenses on your tax or depreciation on your car for using it for work related matters.

Given we have up graded the buildings at Punt Road and the ground work there would be plenty of areas to claim big time on depreciation. Haven't seen the actual financial statements but suspect these areas contributed to the result.

One smallish loss after 11 years of profit does not trigger bankruptcy.

You are correct but and it's an important but

Every year there is depreciation and amortisation costs, that is not in dispute

However, when the club makes a profit; let's call it bottom line profit to keep it simplistic. It has never said we've made an operating Profit of say $3mil but after deprecation & amortisation the "bottom line" profit is $800k... it is simply announced we made a $800k profit

This year for whatever reason they have decided to make the distinction which is IMV a poor way to do it because it has created unnecessary & extra noise around the number

What they should have said again IMO is "we've made a loss of $80k which includes extra amortisation costs for the new Fitness business venture at Cardinnia Shire. Doesn't try and distort the numbers just highlights and explains an increase in expenditure due to business changes

All good agree with the above. With so many new shiny things around Punt Road the depreciation expense should be higher than past years and the amortization of costs in the Fitness Centres is also new.

Cant really be bothered actually looking at the financial statements for the past few years but I am not overly worried by a smallish loss this year when budgets would have been made on the assumption of a good year most likely with us reaching the finals.

The main thing will be that the next year budgets are worked on the lower income expectations and the club returns to a profit, which will be acceptable.....unless we make a loss for paying out Hardwick (but that would still be acceptable.....as long as someone from the Board takes responsibility and resigns.)

So lower costs to make a profit?
Where are the lower costs going to come from?
Not the non core, low margin gyms we are setting up.
Are we going to cut corners in the football dept. again?
More money in management with Balme in and Dan retained.
So perhaps it's in the Operational side - do we have the same number of development coaches ?
Are they the same calibre or experience as the competition or have we cut corners here to "save money" and retain under performing management in matters football, list and recruiting?
Sounds like a doom loop to me

[big tone]

I wonder how many people here actually understand what amortisation and depreciation are?

It seems Gracies does.

It is also a lot harder to get convince businesses to sponsor sporting clubs than it was two years ago, and i suspect it is going to get worse before it gets better

Think you are right regarding sponsorship.

Market in Victoria now is tougher than it's every been

10 AFL clubs, 1 NRL club, 2 FFA clubs, 1 national mens basketball team,  the AFL women's teams, 1 ABL team, and that's only top tier teams.

Crowded market all chasing the same thing.. tough, extremely tough

No one said it was easy but that is why you need the best people possible in the right positions. IMO the board has failed us coming off our most successful 3 years we have had in 30. If we were to get extra sponsorship dollars it was going to be this year. Good luck getting money out of organisations now after that proformance this year. Like you said, there are so many options for companies, why would you waste your money on a club that plays the type of unwatchable footy we play.
Heads should have rolled at the completion of this year, players, coach and board members but in reality not much has changed. After a season like 2016, to get people on board again, and that includes sponsorship dollars, you need to show that you don't except what has taken place and bring in hope and that is by change.
Getting rid of assistant coaches and a few retired players don't do much for my confidence.

[Hard Roar Tiger]

Can't disagree with that BT. People covering backsides barely  even covers the cracks (pun intended)

[(•))(©™]

It's all about the board.

What a group of losers.

[🏅Dooks]

It's all about the board.

What a group of losers.

Preservation of power at the expense of results and the fans

[(•))(©™]

I always knew the majority of members and supporters were dumb stuffs

[WilliamPowell]

Received a copy of the full financials (not the concise report that cam with the AGM / voting stuff via a link)

Pleased to say they have detailed revenues & expenditure a lot better, broken up in more categories. Could still be improved further but a clear improvement on previous years.

MAybe they are listening or are at least reading OER 

[FlashGordon]

Received a copy of the full financials (not the concise report that cam with the AGM / voting stuff via a link)

Pleased to say they have detailed revenues & expenditure a lot better, broken up in more categories. Could still be improved further but a clear improvement on previous years.

MAybe they are listening or are at least reading OER 

I am quite sure they are and not that I am one of their drones, but there has been a steady influx of "new" users signing up in a few forums that are pretty obviously there to counter any negs. aligned to the current board and the way it "operates" ...i.e selling spin and thin air to its target audience. 

[(•))(©™]

Received a copy of the full financials (not the concise report that cam with the AGM / voting stuff via a link)

Pleased to say they have detailed revenues & expenditure a lot better, broken up in more categories. Could still be improved further but a clear improvement on previous years.

MAybe they are listening or are at least reading OER 

Maybe it's an endightment on the club that their financials are ridiculed on public forums.