SA Footy

The reasons given for the substantial loss were

Depreciation ($265 000)

Repairs and Maintenance ($100 000)

Once off expenses ($40 000) legal, IT and OHS.

This adjusts the loss to $225 000. The only positive revenue source was the pokies which despite the new smoking laws remained steady despite a budgeted 8% decline in gaming revenue.

From the annual report things don't look to be too good down at Richmond and i would say that these results had a huge impact on Damien Phillips leaving his position of CEO. I hope the current board of WAFC can turn things around sooner rather than later as i don't think we can continue to make such losses for much longer.

Alarm bells would have to be well and truly sounding after that announcement one would think, I would hope that the club have also outlined to members specifically what it is that they are going to do to trade out of it???

it would never have happened in uncle dougs day at the helm

bayman wrote:it would never have happened in uncle dougs day at the helm

there is reference to some of the cost being because things were not kept up to date in the past but yes there will be plenty of people that hold that opinion.

wycbloods wrote:
there is reference to some of the cost being because things were not kept up to date in the past but yes there will be plenty of people that hold that opinion.

None of them would be well-informed.

Do the legal fees relate to the dispute with DT?

Good luck to the new CEO, whoever it is. Hopefully they can turn it around.

Sojourner wrote:Alarm bells would have to be well and truly sounding after that announcement one would think, I would hope that the club have also outlined to members specifically what it is that they are going to do to trade out of it???

Not really, if they have the cash reserves or a strong balance sheet a loss isnt a major concern

What does their balance sheet show in regarding to Cash held at bank?

smac wrote:Do the legal fees relate to the dispute with DT?

Good luck to the new CEO, whoever it is. Hopefully they can turn it around.

did DT have agm's

As Dutchy mentioned, as long as West has cash in the bank, they will be ok. However, you would imagine that too many years with losses like this would start to see those cash reserves depleted.

The worrying thing for West would be that their loss only includes $40,000 of one off expenses. Depreciation and repairs & maintenance are normal expenses of most trading entities, so shouldn't necessarily be used to explain the large loss, unless there were some unusually high write-offs or one-off repairs done.

Ignore the paper losses (depreciation) - not really an issue - much of the writedowns were necessary and a huge amount was spent with the electrical and OHSW concerns of the aging grandstand. If they didnt spend it, the council was going yo close this part of the facility down.

The concern was that we were still $250,000 short with these one-off expenses. We need to find a new revenue stream - moving the pokies is part of that plan, but we cant rush into it as we need the right location and of course, we dont have a great deal of borrowing potential at the moment.

Perhaps one idea might be to try and lease an existing hotel in or around the Aberfoyle Park area which is still in Westies territory and may well have more pokie $$$ floating around?

Sojourner wrote:Perhaps one idea might be to try and lease an existing hotel in or around the Aberfoyle Park area which is still in Westies territory and may well have more pokie $$$ floating around?

There aint too many mate, the place isn't exactly flooded with pubs (only the Hub comes to mind).
Personally I'd be all for them opening one up at Happy Valley right near the Kenihan's Road Shops, I'd guaranttee them at least 10k of business a year.

would westies technically be trading as insovlent ... only $40,000 in the bank yet have a $55,000 overdraft from another loan ... plus other fiancial issues... remember i made comment in late december that westies will report a $400K loss.

at least this isnt damien phillips worst effort speak to ppl at south melbourne from a few years back ...over a $1 million dollar loss..

dinglinga wrote:would westies technically be trading as insovlent ... only $40,000 in the bank yet have a $55,000 overdraft from another loan ... plus other fiancial issues... remember i made comment in late december that westies will report a $400K loss.

"Solvency" is technically defined as being able to pay your debts as they fall due. Debts means any spending commitment .. ie, player wages, normal bills, etc.

So it's hard to know from a historical financial report whether they are currently having difficulties with solvency.

There's heavy penalties for directors if they knowingly trade while being insolvent so I suspect the answer to your question is no. As long as there is some form income coming in (which there is) and (as Dutchy said) there's strength in the balance sheet to cover off some short term losses, then they shouldn't be insolvent.

The other factor against insolvency is whether the SANFL have any obligation to provide short term financial support to Westies or anyone. Of, if they didn't, whether they would anyway if things got dire.

if the SANFL gave assistance to westies there might be a few north fans on here jumping up and down ...

IMO as per my comment on the 10 team thread, I believe the SANFL wouldn't be upset if it became an 8 team SANFL competition. With that in mind don't expect the SANFL to provide any $$$$ to keep clubs financially viable. The SANFL would provide adminstrative support and advice on how to run the club as they have done with others when requested.

Yep as per Dingers comment if teh SANFL did provide financial assistance to any other club they could quite rightly feel aggreived.

dinglinga wrote:if the SANFL gave assistance to westies there might be a few north fans on here jumping up and down ...

Correct.

I think there are one or two SANFL clubs that have recently sought some financial assistance from the SANFL.

I don't think West is one of them.

redandblack wrote:I think there are one or two SANFL clubs that have recently sought some financial assistance from the SANFL.

I don't think West is one of them.

And did they get any??

Well, regardless of North fan's reactions, I think the SANFL would try to help struggling clubs as much as they could, within reason. I suspect there are a lot of things they could do before thinking about giving handouts, so I'd guess that's the type of assistance being sought.

It begs the bigger question - that of the survival of several clubs. The argument that each club 'owns' a ninth of the SANFL's assets is not relevant, so clubs have to battle to survive. I would guess there are perhaps 4 clubs struggling at the moment and some of the 'middle' clubs are posting large losses as well. The few 'rich' clubs are likely to dominate under this scenraio.

Although West are struggling and the members will rightfully ask for an explanation of the large loss, West still have an asset base of over $2 million even after the loss. Their cash position is under siege, though, so their survival depends on budgeting to turn their trading loss around.