Power lose $514k

[Crow-mosone]

How logn do we have to keep paying the SANFL for??? Surely it cant be both ways with the AFL saying we have no relation to PAFC of the SANFL yet the SANFL saying we do and have to keep paying them. Its one way or the other and since the AFl owns the SANFL (i presume since they own every other state comp) then to me the AFL is double dipping.

I might be wrong, but isn't it the SANFL that own both licenses?

 

[Crow-mosone]

I am not sure I see what is different this year?
sure primus redundancy, but as a % of player payments that's stuff all.

everything else has been there pretty much since day 1, except this year has record membership and premiership goodies?

what's the year on year comparators? 2004 vs 2005?

 

[Gravel]

After having a quick look at the annual report
Loss $514,723
after
371,616 AFL licence fee
204,000 amortisation
409,000 Primus + others pay out
124,000 deferred lottery
but before
150,000 premiership income
Adjusted surplus $433,833

SANFL dividend $220k to be paid
Premiership generated $870k
Boulton predicts $1.0m cash surplus by 2007

 

[*PAF]

Thanks for that Gravel.
Now James needs to work some madjic so that we break even and not make big profits, otherwise the SANFL will up our repayments.

 

[Crow-mosone]

After having a quick look at the annual report
Loss $514,723
after
371,616 AFL licence fee
204,000 amortisation
409,000 Primus + others pay out
124,000 deferred lottery
but before
150,000 premiership income
Adjusted surplus $433,833

SANFL dividend $220k to be paid
Premiership generated $870k
Boulton predicts $1.0m cash surplus by 2007

quite creative there.

but you can't pick and choose what you like, Primus is contracted as part of your TPP, as are others, and employed in other roles. how is that a one off?
players retire / get injured every year for all clubs.


Loss -514
+ License +371
+ Amort +204
- Prem inc -150
- SANFL -220

I make that adjusted loss of 309

now if the total gains for the flag are 870, then you would expect even more than just 150 off the bottom line or has it been assumed that the 720 will recur every year?

with record memberships, likely to fall if onfield production doesn't lift, not sure I see a million out of those numbers/assumptions.

the timing of the lottery fund, not sure what is happening there, but it is only permissable to defer the income if there are question marks on likelihood of realisation. also, doesn't take into account other timing benefits carried over from the year before. therefore cannot be counted.

maybe you will make $1mio in 2007, but not off the back of those numbers.

 

[portentous]

The income side of things isn't too bad, it's the expenses that are killing us. The impact on the balance sheet though differs depending on if we're spending on capital works etc or salaries etc.It's still a disappointing figure though. I'm getting tired of all the "excuses" though. Will be happy when we have less "one-offs" so it's easier to follow how we're really performing financially.

Our net assets exceed $5m, which isn't a bad position to be in. Now that we're established, I'd like to see that figure improve each year.

 

[Ferox]

quite creative there.

but you can't pick and choose what you like, Primus is contracted as part of your TPP, as are others, and employed in other roles. how is that a one off?
players retire / get injured every year for all clubs.


Loss -514
+ License +371
+ Amort +204
- Prem inc -150
- SANFL -220

I make that adjusted loss of 309

now if the total gains for the flag are 870, then you would expect even more than just 150 off the bottom line or has it been assumed that the 720 will recur every year?

with record memberships, likely to fall if onfield production doesn't lift, not sure I see a million out of those numbers/assumptions.

the timing of the lottery fund, not sure what is happening there, but it is only permissable to defer the income if there are question marks on likelihood of realisation. also, doesn't take into account other timing benefits carried over from the year before. therefore cannot be counted.

maybe you will make $1mio in 2007, but not off the back of those numbers.

I think Matty's payout is a one off because they have brought it fwd from next year.

 

[Macca19]

I agree with yob. There will be different one-offs every year. 2003 it was extraordinary injury payments to key players which cost us a fair bit of cash, this year its the Primus payout, next year it will be something else.

Im worried the problem is more deep seated than just blaming the Primus payout and liscence fee. Im still struggling to find out how on earth we could lose 800k considering our memberships were up, attendances were up, still some premiership runoff re: merch etc, cutting the football department down by a fair bit.

If we are losing 800k with attendances/memberships 16% up, footy dept. cut back and the year after a premiership.....I hope we never do a Richmond and end up down the bottom for 20 years.

 

[Portia]

Its gotta be failed investments, like the travel agency and similar. I dunno what it would be this time.

Also the ever changing, ever unprofitable Port club.

 

[Malibu#27]

quite creative there.

but you can't pick and choose what you like, Primus is contracted as part of your TPP, as are others, and employed in other roles. how is that a one off?
players retire / get injured every year for all clubs.

It can be treated as a one off because Primus has been paid an additional $300,000 this year that was due to be paid next year - the payment was borught forward ... for long term reasons.

It makes this year look worse, however if you look at the figures as a rolling 2 year figure the club is actually better off, because the payment being made early to Primus enabled the amount paid to be reduced.


I do concede however that the club should probably bank on having annual unexpected expenses of $200,000 or so .... if they dont occur they bank the money.

now if the total gains for the flag are 870, then you would expect even more than just 150 off the bottom line or has it been assumed that the 720 will recur every year?

You must remember that the $870,000 that is spoken of was included in last seasons figures ....... hence the reason a profit was returned last season. It doesnt impact this years figures .... although I concded there was probably a (much smaller) financial effect with residual post premiership profits (is that the $150,000).


Another thing that appears to be an issue is that the reported loss doesnt seem to include the SANFL dividend ... so the loss is really $220,000 greater.... unless I have misread the paper .

 

[Malibu#27]

Its gotta be failed investments, like the travel agency and similar. I dunno what it would be this time.

Or maybe bucky got a golden handshake

Also the ever changing, ever unprofitable Port club.

Is something changing here ... I read somewhere that the MAgpies will now have their own Pokies venue ... were the two clubs sharing his income previously ?

 

[sog35]

Cro-mo, without having seen the accounts I would presume lottery would be accounted for under a cash basis. In this case they would be deferring because the draw is not until the next financial year and they want to match some of the income up with the prizes. I've not seen many clubs/organisations account for lotteries on an accrual basis and then have to worry about realising the income.

To compare SANFL clubs to AFl clubs and their profits is a bit a of a falacy. How many poker machines do we have down at the club. I think it may be 40 which I think is the absolute maximum allowed in 1 location for a club (I know Glenelg have that many). North Adelaide have 2 locations therefore 80 machines. North are also in one of the better areas for poker machine turnover therefore earn twice as much.

Whilst there is no doubt they are probably circumventing the cap somehow, they would most likely be paying their players around 450K, the cap for 2005 in the SANFL was $305K I think. In summary the players are paid less but the profits from the pokies are similar no matter if you are an AFL or SANFL club.

 

[sog35]

Or maybe bucky got a golden handshake




Is something changing here ... I read somewhere that the MAgpies will now have their own Pokies venue ... were the two clubs sharing his income previously ?

The Magpies I believe were supposed to get a payment ( I think it was set) from the Port Club.

 

[PowerKat]

Is something changing here ... I read somewhere that the MAgpies will now have their own Pokies venue ... were the two clubs sharing his income previously ?

The maggies were getting a % of Port Club profits, but any % of nothing is well, nothing. They have now bought the Prince of Wales - finalised in November. This may mean less turnover at the Club as some people will support the pub venue for the maggies. Not sure if the arrangements re profit splitting from the Port Club are changing? I haven't seen the report yet - did the Port Club actually make anything this year?

The loss is disappointing. I wll be more concerned if the club can't maintain, if not increase, our membership / season ticket numbers in 2006.

 

[Powerstufff]

I agree with yob. There will be different one-offs every year. 2003 it was extraordinary injury payments to key players which cost us a fair bit of cash, this year its the Primus payout, next year it will be something else.
Im worried the problem is more deep seated than just blaming the Primus payout and licence fee. Im still struggling to find out how on earth we could lose 800k considering our memberships were up, attendances were up, still some premiership runoff re: merch etc, cutting the football department down by a fair bit.
If we are losing 800k with attendances/memberships 16% up, footy dept. cut back and the year after a premiership.....I hope we never do a Richmond and end up down the bottom for 20 years.

This says nearly all of it for me, Add in what ParalowiePower (I think) said about the SANFL demanding more when the AFL licence is paid off.
As for $5 million is assets it is often meaningless stuff. Will Motlop accept the Alberton Oval's N M Williams scoreboard in lieu of cash?

 

[Malibu#27]

This says nearly all of it for me, Add in what ParalowiePower (I think) said about the SANFL demanding more when the AFL licence is paid off.
As for $5 million is assets it is often meaningless stuff. Will Motlop accept the Alberton Oval's N M Williams scoreboard in lieu of cash?

Anyone know what our cash reserves are.

A $500,000 loss is acceptable given there are mitigating circumstances and you have the reserves to cover it.

I mean are we borrowing money to pay of these loans and establishment fees or is it coming out of cash reserves. If were borrowing to pay them off - then we havent really paid them off.

 

[sog35]

There is about 300K worth on non-cash expenditure I can see from the above. The license fee I assume is paid in installments. The establishments costs were paid in cash in our first year but the 'accounting' expense is spread over a number of years.

The cash flow statement would be the best thing to read to work out if the year had any impact on our cash holdings.

 

[Andre]

Not happy at all. $800k odd after distributions to the SANFL. There's no point leaving that out, whether we think it's fair or not, it's there and will remain so.

Taking out the license and start up costs is valid for a real picture, but although Primus's payout being brought forward is a one off, there'll always be some staff turnover off-field. Including costs of that as part of a one-off is dodgy in my eyes.

So next year minus the payout costs, given we'll still have the license fee costs, we'll start at about $400k in the red! That's before looking at a drop in season tickets and memberships - whilst we'd like to think it wouldn't happen, with our slide down the ladder and the Cows finishing above us, there will be a downturn. Not to mention the last of the post-premiership merchandising boom would have long evaporated.

I haven't yet received the report, it takes a day or two to get to Melbourne, but I don't see us being in the black next year.

 

[Mad Dog]

As Macca19 said earlier - it doesn't matter what sort of spin you put on these figures in terms of extraordinary items (like payout and premierships) - a loss of this magnitude must be worrying on the back of a premiership year.

How can Boulton keep a straight face when he talks down the implications of the financial loss on one hand, while he talks up better attendance and memberships on the other hand when in fact they are fundamentally linked ??? In actual fact the result would have been worse had the memberships not been at record levels !!!

I don't pretend to know the ins and outs of what happens in the Travel Agent, Bar, Merchandise shop or whatever - but surely turnover must have been at record levels this year - but has not translated into a favourable position.

I think Bucky has been a bigger loss than most care to admit - and from a distance - the club needs to give some serious thought to how they position themselves in the market over the coming years. Is there a need for a travel agent ??...Does the club market it's facilites to outsiders as well as it could. Revenue from modern facilities hire is something the club needs to exploit while their clubrooms are still considered state of the art. Pool - Gym - Clinic / Consulting Rooms etc.

And I don't subscribe to the point of view that a Net Asset position of $5.0m is much to write home about considering the Asset to turnover ratio in such an organisation, and the percentage of those assets that are non-tangible.

Anyway.......just some thoughts...

 

[Handyandy]

Port is a footy club which was set up to win premierships not a financial organisation established to make a profit. In the old sanfl days port used to battle to break even (norwood had all the money) but we won alot of flags.
This years financial loss will only become significant if it hinders our on field performance. ie if we have to spend below the salary cap or cant afford decent coaches, which doesnt appear to be happening yet.
Im not too worried about these figures(yet), let Ports accountant and James the money man worry about it.

 

[Macca19]

Had a look at it then. They seem pretty confident that we are in a much better position than last year. Im not so sure. Our debt also grew this year by $800k and is at $3.8 Million.

 

[Crow-mosone]

The income side of things isn't too bad, it's the expenses that are killing us. The impact on the balance sheet though differs depending on if we're spending on capital works etc or salaries etc.It's still a disappointing figure though. I'm getting tired of all the "excuses" though. Will be happy when we have less "one-offs" so it's easier to follow how we're really performing financially.

Our net assets exceed $5m, which isn't a bad position to be in. Now that we're established, I'd like to see that figure improve each year.

basically that's it in a nutshell.

though as you know any capital works won't impact the P&L (much).

 

[Crow-mosone]

I think Matty's payout is a one off because they have brought it fwd from next year.

which is why it's not a one off

 

[Crow-mosone]

It can be treated as a one off because Primus has been paid an additional $300,000 this year that was due to be paid next year - the payment was borught forward ... for long term reasons.

It makes this year look worse, however if you look at the figures as a rolling 2 year figure the club is actually better off, because the payment being made early to Primus enabled the amount paid to be reduced.

that doesn't make it a one off. quite the opposite, it is ordinary operating expenses. you are also not taking account of any timing issues that may have been carried over from the year before.

I do concede however that the club should probably bank on having annual unexpected expenses of $200,000 or so .... if they dont occur they bank the money.

whatever the number is, there will be a number every year. this year's "number" is fairly small.

You must remember that the $870,000 that is spoken of was included in last seasons figures ....... hence the reason a profit was returned last season. It doesnt impact this years figures .... although I concded there was probably a (much smaller) financial effect with residual post premiership profits (is that the $150,000).

Perhaps you're right. does that then mean this year is more the norm than last?

Another thing that appears to be an issue is that the reported loss doesnt seem to include the SANFL dividend ... so the loss is really $220,000 greater.... unless I have misread the paper .

that's possibly the biggest point. I don't understand why you say the loss is 500k odd, when you know that's not the end of it. License fees are absolutely part of your operating expenses - in any business where a license fee is due.

 

[Crow-mosone]

Cro-mo, without having seen the accounts I would presume lottery would be accounted for under a cash basis. In this case they would be deferring because the draw is not until the next financial year and they want to match some of the income up with the prizes. I've not seen many clubs/organisations account for lotteries on an accrual basis and then have to worry about realising the income.

To compare SANFL clubs to AFl clubs and their profits is a bit a of a falacy. How many poker machines do we have down at the club. I think it may be 40 which I think is the absolute maximum allowed in 1 location for a club (I know Glenelg have that many). North Adelaide have 2 locations therefore 80 machines. North are also in one of the better areas for poker machine turnover therefore earn twice as much.

Whilst there is no doubt they are probably circumventing the cap somehow, they would most likely be paying their players around 450K, the cap for 2005 in the SANFL was $305K I think. In summary the players are paid less but the profits from the pokies are similar no matter if you are an AFL or SANFL club.

I would imagine mixing and matching cash and accrual accounts is specifically prohibited.