The Essendon Football Club is debt-free for the first time since 2011, having reduced its borrowings by $3.9 million in 2019, and at the same time increased cash reserves to $6.4 million.
Reporting an overall profit of $3.534 million, inclusive of The Hangar development fundraising income of $3.474 million, the club utilised the surplus of its profit to fully pay down outstanding debt.
At October 31, 2019, excluding the increased level of fundraising associated with The Hangar redevelopment, the club recorded a net operating profit of $60,000 and operating cash surplus of $3.4 million.
The net assets of the club increased to $39.6 million, compared to $36.1 million in 2018.
In 2019, the club achieved record membership of 84,567 - an increase of more than 5,000 over the previous year.
Chief executive officer Xavier Campbell said the clearance of debt was an important step forward for the Bombers.
“It’s a significant outcome for the club to record a profit for a third consecutive year, and importantly, clear all borrowings which has been in line with our projected timeframes to manage the remaining debt the club has held in recent years. It also positions us for the next phase of facility investment over the coming 12 to 18 months,” Campbell said.
“We will incur new debt as we progress the redevelopment, but the basis we now have, combined with our strong cash flows, will position us well to service that debt and repay it within a reasonable timeframe.
“This year, we deliberately increased spend in key strategic areas of the club, most importantly in our core business – football - as well as preparing for the next phase of our facility expansion and strategic growth which is vital for the long-term position of the organisation.
“A significant portion of the cash flow in 2019 has come in the form of grants and donations to assist in the funding of the second phase of The Hangar’s development, which will have a direct impact on strengthening our men’s and women’s football programs as well as our Next Generation Academies for the long-term. It will also play a part in ensuring the club continues to play a significant role in the communities in which it operates.
“Our loyal members and supporters remain at the forefront of our organisation, with our membership surpassing 80,000 for the first time in our club’s history. I wish to again recognise the tremendous loyalty of our membership base in 2019, and we look forward to your continued support for the upcoming season next year.
“Overall, the club is in a strong financial position and we continue to be well placed to support our players as we strive for the ultimate on-field success and with a strong base from which to launch our expansion project for The Hangar.”
Key points of the club’s 2019 financial result:
- Net operating profit, excluding additional fundraising for The Hangar redevelopment, of $60,000 and operating cash surplus of $3.4 million.
- Membership revenue increased by $500,000 as a result of the membership tally increasing from 79,318 to 84,567.
- The club reduced its borrowings by $3.9 million to be debt-free at the end of the year, with cash reserves of $6 million.
- Net assets of the club were $39.6 million, compared with $36.1 million in 2018.
- An increase of $673,000 in match receipts/stadium revenue.
- Increased investment of $500,000 in non-player-related football investment.
The 2019 annual report is available here. The Annual General Meeting (AGM) will be held on Thursday, December 5 at Marvel Stadium, commencing at 6:30pm.
Directors Andrew Muir and Simon Madden will be declared re-elected at the AGM as the pair were the only candidates to nominate for election to the Club’s Board by the closing date of October 31, 2019.