The club has total assets of almost $16 million and net assets in excess of $12.2 million which includes cash and investments in excess of $5.5 million.
While pleased to again announce an operating profit, Essendon chief executive Peter Jackson said the result needs to be put into perspective with much of the club’s result attributable to investment related activities.
""Firstly, I think it is important to note that this result reinforces the club’s strategic business decision to invest in related but non-football activities to insulate itself against any downturn in on-field performance,"" Jackson said.
""But we have again made quite a significant loss in terms of football operations and while our investments have off-set this loss as mentioned above, it is a trend that is unsustainable in the long-term and something this club will work hard to address.""
Jackson pointed out that the financial result was affected by some external factors outside the club’s control and also as a result of some strategic internal decisions.
""Membership and gate receipts have again been affected by the fact we are fixtured to play so many night games. I estimate we have lost 3000 members as a result – this equates to more than $500,000 off the bottom line,"" Jackson said.
""Gate receipts declined again and that has been the case each season since 2001. This has taken more than $400,000 off the bottom line. Together we estimate these factors have had a combined impact on profit of $750,000.""
Jackson said other factors that have contributed to this result are the re-development of the MCG, poor weather for some games at the MCG and the fact a number of traditionally bigger games didn’t attract big crowds.""
""The Hall of Fame also costs the club about $100,000 annually to operate and we will take steps next year in a bid to improve its profitability,"" Jackson said. ""But we also recognise it is an integral part of this club’s history and tradition and as such a vital part of the club.""
""We have also undertaken some significant capital expenditure on the facilities this year – the resurfacing of the oval - and more is planned. Car parking, the extension of the Windy Hill Fitness Centre and the refurbishment of the Shower Stand among other things will costs us around $3 million. Expenditure we believe will generate significant cash returns for the club in the medium to long term,"" Jackson said.
""It does however mean the clubs depreciation and amortisation expenses will grow to in excess of $800,000 by 2006 which will as a result therefore lower reported profits. However the foundations upon which this business can be grown will be very strong.""
Results for the past eight years:
1997 - $498,712
1998 - $770,415
1999 - $333,613
2000 - $1.6 million
2001 - $1.25 million
2002 - $1,007 million
2003 - $409,652
2004 - $659,579
