Scraggers Loss & Gain

[Ext User(Footy Facts)]

The Scraggers have reported a loss of $480,000
but on the upside this was due mainly to extraordinary
items of interest & depreciation and on the back of a
15% increase in Membership the Doggies are
starting to become serious contenders off as well
as on the field.

Should the Doggies hold their membership base
and then even increase it by a mere 1000 or so
they should post a handsome profit next year.

gregF

[Ext User(Colin Kynoch)]

On Tue, 15 Nov 2005 15:29:02 +1100, "Footy Facts"
<footyfacts@yahoo.com>after much thought and consideration decided
that the following would improve the lives of those that read it:

>The Scraggers have reported a loss of $480,000
>but on the upside this was due mainly to extraordinary
>items of interest & depreciation and on the back of a
>15% increase in Membership the Doggies are
>starting to become serious contenders off as well
>as on the field.

How is the interest an extraordinary item?

And how is depreciation an extraordinary item?

As you should know these are standard business expenses.

They are not one offs.

The interest bill of $450,000 on a $5 million debt means they are
paying about 9%, not an unreasonable rate given their financial
stability.

The good news for the Bullies is that they are managing to reduce the
debt

>Should the Doggies hold their membership base
>and then even increase it by a mere 1000 or so
>they should post a handsome profit next year.

1000 members wont cut the mustard to make a profit

Their depreciation will likely be less as will their interest, but
they will need more than 1000 members (@ approx $150 per membership
this would only equate to about $150,000 more revenue) to turn to
profit unless they can increase income or reduce costs even further

Colin Kynoch

[Ext User(Footy Facts)]

"Colin Kynoch" <colinkynoch@gmail.com> wrote in message news:i1tin1lq81039dm3er71vjcn86k6prsnlj@4ax.com...
> On Tue, 15 Nov 2005 15:29:02 +1100, "Footy Facts"
> <footyfacts@yahoo.com>after much thought and consideration decided
> that the following would improve the lives of those that read it:
>
>>The Scraggers have reported a loss of $480,000
>>but on the upside this was due mainly to extraordinary
>>items of interest & depreciation and on the back of a
>>15% increase in Membership the Doggies are
>>starting to become serious contenders off as well
>>as on the field.
>
> How is the interest an extraordinary item?
>
> And how is depreciation an extraordinary item?
>
> As you should know these are standard business expenses.
>
> They are not one offs.
>
> The interest bill of $450,000 on a $5 million debt means they are
> paying about 9%, not an unreasonable rate given their financial
> stability.
>
> The good news for the Bullies is that they are managing to reduce the
> debt
>
>>Should the Doggies hold their membership base
>>and then even increase it by a mere 1000 or so
>>they should post a handsome profit next year.
>
> 1000 members wont cut the mustard to make a profit
>
> Their depreciation will likely be less as will their interest, but
> they will need more than 1000 members (@ approx $150 per membership
> this would only equate to about $150,000 more revenue) to turn to
> profit unless they can increase income or reduce costs even further
>
> Colin Kynoch

shit you take a simplistic view
for a "financial" adviser

1. I can only assume they had a lot
of backended debt that they have retired
THEIR quoted figure of $300K pa repayments
on the $5M can only equate to 4%
so they must be receiving a sponsorship
of some kind that reduces the repayments
thus the interest is about $200K pa on the $5M

I can only use the Doggies published figures
If they are playing rubbery with them
then it doesn't add up to the stated numbers!

2. Depreciation is an extraordinary item
because it is only a reflection of the depreciation
of the value of an asset bought by the club
sure it rights down the overall profitability
but only in an accounting sense for tax reasons

to do it slowly for you

You can only depreciate items you own not lease
I bought my car for $20K up front
and had to pay the tax on earnings up front of course
It is then depreciated which reduces my earnings
and I get the tax back each year
Depreciation is the recouping of the tax paid
up front so it is a book loss for the sake
of tax return but not for the sake of cash profits

3. If you did a little research you would
know that clubs make about $400pa/member
(but you conveniently use only the base $)
this is because you get a mix of membership types
plus merchandising plus crowd rebates for catering
thus 1000 extra members and the retirement
of about $200K in interest would see the doggies
in the black.

gF

[Ext User(Colin Kynoch)]

On Tue, 15 Nov 2005 17:21:29 +1100, "Footy Facts"
<footyfacts@yahoo.com>after much thought and consideration decided
that the following would improve the lives of those that read it:

>
>"Colin Kynoch" <colinkynoch@gmail.com> wrote in message news:i1tin1lq81039dm3er71vjcn86k6prsnlj@4ax.com...
>> On Tue, 15 Nov 2005 15:29:02 +1100, "Footy Facts"
>> <footyfacts@yahoo.com>after much thought and consideration decided
>> that the following would improve the lives of those that read it:
>>
>>>The Scraggers have reported a loss of $480,000
>>>but on the upside this was due mainly to extraordinary
>>>items of interest & depreciation and on the back of a
>>>15% increase in Membership the Doggies are
>>>starting to become serious contenders off as well
>>>as on the field.
>>
>> How is the interest an extraordinary item?
>>
>> And how is depreciation an extraordinary item?
>>
>> As you should know these are standard business expenses.
>>
>> They are not one offs.
>>
>> The interest bill of $450,000 on a $5 million debt means they are
>> paying about 9%, not an unreasonable rate given their financial
>> stability.
>>
>> The good news for the Bullies is that they are managing to reduce the
>> debt
>>
>>>Should the Doggies hold their membership base
>>>and then even increase it by a mere 1000 or so
>>>they should post a handsome profit next year.
>>
>> 1000 members wont cut the mustard to make a profit
>>
>> Their depreciation will likely be less as will their interest, but
>> they will need more than 1000 members (@ approx $150 per membership
>> this would only equate to about $150,000 more revenue) to turn to
>> profit unless they can increase income or reduce costs even further
>>
>> Colin Kynoch
>
>shit you take a simplistic view
>for a "financial" adviser
>
>1. I can only assume they had a lot
> of backended debt that they have retired
> THEIR quoted figure of $300K pa repayments
> on the $5M can only equate to 4%
> so they must be receiving a sponsorship
> of some kind that reduces the repayments
> thus the interest is about $200K pa on the $5M

Well they have stated that the interest was $450,000 (and that would
be a reasonable level of interest on $5million

They have said they are repaying the $5 million debt at $300,000 p.a.
that is a principal payment

You are confusing principal and interest.

For someone in business you certainly seem confused over basic
principles.



> I can only use the Doggies published figures
> If they are playing rubbery with them
> then it doesn't add up to the stated numbers!

There numbers make perfect sense.

They have a $5million debt.

they make principal payments of $300,000 p.a.

Their interest in the 12 month reporting period was $450,000 which
makes perfect sense considering their debt level.


>
>2. Depreciation is an extraordinary item

It is a normal item.

Surely even you have depreciation in your business.

Your computer on which you use your MYOB would be a depreciable item.

OTOH the cost of upgrading MYOB would not be.


> because it is only a reflection of the depreciation
> of the value of an asset bought by the club
> sure it rights down the overall profitability
> but only in an accounting sense for tax reasons

Duh, that doesn't make it an extraordinary item.

They had depreciation last year, they will have it next year and
almost certainly every year to come.


> to do it slowly for you
>
> You can only depreciate items you own not lease

Correct.

> I bought my car for $20K up front
> and had to pay the tax on earnings up front of course
> It is then depreciated which reduces my earnings
> and I get the tax back each year
> Depreciation is the recouping of the tax paid
> up front so it is a book loss for the sake
> of tax return but not for the sake of cash profits

Which makes it an ordinary item not an extraordinary one.

Or did you only claim depreciation in one year?


>3. If you did a little research you would
> know that clubs make about $400pa/member
> (but you conveniently use only the base $)

Well it is the base adult membership. The most commonly purchased.

Sure there are more expensive ones, but then there are considerably
cheaper ones (ie kids and country memberships)


> this is because you get a mix of membership types
> plus merchandising plus crowd rebates for catering
> thus 1000 extra members and the retirement
> of about $200K in interest would see the doggies
> in the black.

Given they paid $450,000 in interest this year that would require
their debt to be reduced by approximately $2.2million.

This will require considerably more than 1000 members.

5500 if you take your figure of $400 per member

Colin Kynoch

[Ext User(Swooper)]

On Tue, 15 Nov 2005 06:35:51 GMT, Colin Kynoch <colinkynoch@gmail.com>
wrote:

<snip>

>Given they paid $450,000 in interest this year that would require
>their debt to be reduced by approximately $2.2million.
>
>This will require considerably more than 1000 members.
>
>5500 if you take your figure of $400 per member
>
>Colin Kynoch

Cambell Rose and the CFO have both stated 26,000 required, after 21-
22K this year. So it seems to fit ur numbers. The more heartening
aspect is the decent leap in revenues, which, is expected to rise
again in 06. Whilst we may not have the multi million Emirates type
deals (bit hard to get when you play bugger all Friday or Sat. night
games!!), our sponsorship base is expanding comfortably. If
membership does get to 26K, we will post profits. Can't see why that
can't be gained for '06 given the 'buzz' around the place, but
maintaining it has and will always be our handicap.

hooroo...