You may have seen in the media today that the Collingwood Football Club have signed a Heads of Agreement to sell The Beach Hotel in Albert Park and the Diamond Creek Tavern which will result in a loss of $4.5million.
I would like to reassure all members that the Club is in a very strong financial position after nine years of continuous profit and the loss has already been covered by our cash reserves and will have no impact on the operation of the Club short or long term. Collingwood will continue to invest aggressively in its football department and is currently preparing exciting new redevelopment plans for the Lexus Centre.
The decision to sell the two venues came as a result of a strategy to eliminate debt for the Club during a time of economic uncertainty.
Twelve months ago when I started as CEO I undertook a complete financial review of the Club in conjunction with the Finance and Operations Committee which is made up of Board members. The review established that while all areas of the football Club were performing well, the two recently acquired venues which cost us $14.5million combined were costing us $1million per year in interest without any corresponding income. At that point the Board made the decision to sell the two venues resulting in the Club being debt free after settlement.
This year the Club is forecasting an operating profit of over $2million and after the loss associated with the venues I expect our end of financial year result to be a loss of around $2.5million. The good news is that once we are debt free it will add around $1million per year to our operating result.
Collingwood will continue to manage The Club in Caroline Springs, The Lilydale International and The Coach and Horses hotel which are all performing well and are debt free.
I have undertaken the unusual step to communicate to you these figures for no other reason but to assure you that your Club is in a very sound financial position. Rest assured the financial decisions that myself and the Board make are solely focused around providing the player group with the expertise and resources they require to give them their greatest chance of winning a Premiership.
I thank you for your ongoing support of the Club whether you are a supporter or member.
Gary Pert
CEO
COLLINGWOOD FOOTBALL CLUB
