QRU: $2m Surplus for 2011: ARU Repaid 2 Years Early

[Hawko]

Frankly I was much more excited about paying our debt back 2 years early than making a profit. But you glass half empty guys go for it.

Not sure how you pay a debt back without making a profit unless you went to the Christopher Skase school of accountancy.

But my congratulations to the Reds franchise. They are clearly the best run of the five after being the worst for many years. Now if we could just clone them for the southern and western extremities.

 

[Inside Shoulder]

Well, if you had non-cash deductions (depreciation, for instance) you might report a loss but have a positive cash flow sufficient to free up $2m - I think.....no doubt an accountant will tell me I'm wrong - or how to turn the loss into capital and get it out of the business at a lower tax rate

 

[I like to watch]

yeah correct $1.4M in profit and $600k in depreciation gives cash flow of $2M+ (The Reds effectively made $2M+ profit and then were allowed a $600k deduction from their taxable profit, as their plant and equipment have depreciated by that amount)


Great job by the Reds, the posters suggesting this was down to the Reds winning the comp.( how much are two sellouts at Suncorp worth?)are missing the point.

Management have clearly leveraged the onfield performance with fantastic increases in corporate support and membership numbers.

The reds start the season with significantly increased revenues before the teams performance is known.
The corporates and members are also not as fickle as gate receipts, so there is normally a time lag of a season or two before these revenues diminish if onfield performance is ordinary

 

[disco]

I know at Suncorp stadium the Reds have to sell 15,000 tickets before they start making profit. There was about 4 x 40,000 plus games & I'm pretty sure all other games were 30,000 or more tickets sold.

 

[Inside Shoulder]

I know at Suncorp stadium the Reds have to sell 15,000 tickets before they start making profit. There was about 4 x 40,000 plus games & I'm pretty sure all other games were 30,000 or more tickets sold.

Shows how tight the margins are

 

[wamberal]

Great job by the Reds, the posters suggesting this was down to the Reds winning the comp.( how much are two sellouts at Suncorp worth?)are missing the point.

Management have clearly leveraged the onfield performance with fantastic increases in corporate support and membership numbers.

If you are referring to my comment, I will say it again (and in fact you more or less say the same thing it in your second point): if they could not make a profit in a year of huge on-field success, they never will. You can only leverage off on-field performance, if you have the on-field performance in the first place. I am not taking anything away from the Reds (in fact, we are members), but simply pointing out the obvious?


How much would two sold out Suncorp crowds be worth? A couple of mill?

 

[Sully]

I read somewhere tha the ARU debt was $3000000. I wonder if that was all payed back out of 2011 earnings?

 

[I like to watch]

Yeah I agree with you Wamberal, that if you cannot make $$ when you win the comp, you never will.And yep there is a degree of a windfall profit in respect of hosting the 2 finals game, which represents most of the profit announced.

But more importantly in my view is they are setting the joint up to be a profitable concern regardless of the teams performance.
The result was underpinned by outstanding success across all commercial revenue streams. A sharp focus on membership strategy saw the St.George Queensland Reds Army grow 183% to 15,626 members in 2011, while match ticket sales increased on average by 46% and Corporate Hospitality sales grew 200%
Clearly the 46% growth includes the windfall of 2 home finals games, and cannot be relied upon year in year out.
183% growth in members & 200% in corporate sales is very impressive, and importantly to a large extent are booked prior to the season kicking off, and as such less reliant upon onfield success.
That is no small feat IMO.

 

[RugbyReg]

Don't forget that's last year. Season 2012 has record Memberships, sponsorships and corporate hospitality.

 

[Inside Shoulder]

But more importantly in my view is they are setting the joint up to be a profitable concern regardless of the teams performance.

Given the break even point for crowds, who wont come if there not doing OK, that's a lofty ambition.

 

[I like to watch]

no I disagree,
looking briefly at their 2010 annual report it shows
total revenue(operating) $18M
sponsorships & grants $12.4M (ARU grant was about 1/2 of this)
gate receipts $3.8M.
So if you take away the ARU grant in 2010 they have revenues of $12M
so gate receipts equated to roughly 30% of their income in 2010.
When you increase other revenues by 200%, it reduces dramatically the reliance upon gate takings.

 

[redstragic]

Don't forget that's last year. Season 2012 has record Memberships, sponsorships and corporate hospitality.

Reg do you know where the Ballymore redevelopment is at?

 

[Inside Shoulder]

no I disagree,
looking briefly at their 2010 annual report it shows
total revenue(operating) $18M
sponsorships & grants $12.4M (ARU grant was about 1/2 of this)
gate receipts $3.8M.
So if you take away the ARU grant in 2010 they have revenues of $12M
so gate receipts equated to roughly 30% of their income in 2010.
When you increase other revenues by 200%, it reduces dramatically the reliance upon gate takings.

sounds solid - i vote QRU takes over the ARU

 

[Phantom_Prop]

Are the figures for financial year or calendar year?? As this would impact the result too with finals etc being in 2011-12 year (although looking at avg crowd numbers it maybe calendar year). The broadcast numbers also look low, I thought there was some pretty solid viewing of the finals etc wasnt it like 400,000 odd thousand in aus

 

[p.Tah]

' non-cash deductions, depreciation, operating revenue ' have I stumbled on an accounting forum?

 

[I like to watch]

Are the figures for financial year or calendar year?? As this would impact the result too with finals etc being in 2011-12 year (although looking at avg crowd numbers it maybe calendar year). The broadcast numbers also look low, I thought there was some pretty solid viewing of the finals etc wasnt it like 400,000 odd thousand in aus

Calender year

 

[suckerforred]

Calender year

Which I would expect is their financial year considering the business and time line they deal with. In business you can choose you financial year dates, with good reason.

 

[Ruggo]

Well done Reds. I hope they go hard putting the benifits to work at the grass roots level all over the state.

This should serve as a guide to rugby administration Australia wide. The game needs fresh thoughts at the admin level and people from outside rugby's traditional base should be embraced. It is a proffessional code and needs to be run as sush. Fans will always be fans but they also are consumers and that simple fact needs to be respected.

What I love is that the Reds come off a horror 3 weeks yet still come home to a 30+ thousand crowd. That is a fair measure of where the franchise is at.

 

[Sully]

I was very surprised to see 30K show up!

 

[RedsHappy]

I was very surprised to see 30K show up!

The acid test of course will be if we do just OK-mediocre-poor this year in the S15, what the membership numbers/ave game turnout will be in 2013.