CHAIRMAN David Koch has outlined Port Adelaide’s plans to reduce debt and build on its asset base at the club’s Annual General Meeting.
Speaking to about 300 members at the Lakes Resort Hotel, Mr Koch elaborated on the club’s financial result released in December, which included an operating profit of over $3.4million.
With operating revenue increasing to $57million – up $8million on the previous financial year – the club was able to pay down a further $2.5million of debt, leaving Port Adelaide just over $6million in the red.
It’s a significant turn-around following the potentially destructive impact of the COVID-19 pandemic, and Mr Koch said given two years ago the club had $12.3million in debt, it now had a strong platform to achieving its goal of being financially powerful.
“Just before COVID we were starting to get that debt down, investing in football, investing in improving facilities,” he explained.
“And then COVID hit, which was really the biggest financial risk to this club in its history. Nobody knew what the future was going to be and we had to make some really hard decisions to re-engineer the business.
“We had to borrow again and that spike in borrowings made sure we had the finances to survive Covid. Since then, we’ve been able to reduce it nicely.
“Debt remains important and at the same time as reducing debt, we’re increasing assets. We’re investing in assets with the Precinct, the High Performance Centre.
“Not all debt is bad. There’s good and bad debt and what we’ve tried to make sure is that out there is good debt that is building future assets and building future revenue streams.”
Mr Koch said the club was on track to pay down another $2million of debt in 2023 and increase its net assets from $17million to over $30million with the redevelopment of Alberton Oval.
“We’ll get down to a debt position of debt of $4million and assets of $30million so if you think about it as your own home, we’ll have a mortgage that is 12, 13 or 14% of the value of the home. That’s really manageable,” he said.
“The club is in a really strong position and we’ll continue to invest in our football programs, our people, our facilities.”
In his talk, Mr Koch contrasted the club’s position to where it was a decade ago, praising the work of his predecessor Brett Duncanson and his board for paving the way for the club to play at Adelaide Oval and changing its financial dynamics.
Among the key differences, Mr Koch explained, between the 2012 and 2022 versions of Port Adelaide, was the strong and powerful business model based on:
- Membership numbers increasing from 30,000 to over 60,000
- Revenue rising from $26million to $57million
- Assets rising from $4million in 2012 to $17million in 2022
- Four key long-term major partners in MG, GFG, KFC and Santos.
“10 years ago, we were an unsustainable organisation. We were a bit of a plaything for the SANFL and the AFL,” Mr Koch said.
“For us to rebuild, back to where we are now to where we can consistently invest 100% into footy, has been a huge project that (members) have driven.”
In response to a question from a member in the audience, Mr Koch explained it was “a very clear desire of the board” to continue to reduce and then eliminate poker machines from the club over the next three to four years.
He said the club was also working towards being carbon neutral.
Mr Koch finished his talk by thanking outgoing director Darren Cahill for his service, explaining he had stepped down to move back into tennis coaching full-time. He said that meant “travelling the world, doing what he does best.”
