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The body was in the red by $1,060,928 in 2023, a substantial increase on the $288,492 loss in the 2022 calendar year.
EBITDA (earnings before interest, tax, depreciation, and amortisation) swung from positive to negative, being in the red by $517,792 in 2023 versus in the black by $238,704 in 2022.
The annual report was signed off by auditors on April 24 and has been released this afternoon ahead of tonight’s annual online Member Forum.
In releasing the report to the public, Motorsport Australia cited a 36 percent increase in insurance costs – a hit of more than $700,000 to the bottom line – and inflation in other areas, such as travel and suppliers.
It had already moved to increase licence costs in October last year, although that means the full impact of that 15 percent jump will not have been felt in last year’s financials.
Motorsport Australia CEO Sunil Vohra, who took up his post late last year, has committed to “new reporting structures and increased financial oversight” in 2024.
President Andrew Fraser said on the release of the 2023 annual report, “Business and households are facing the pressure of rising costs, and we are not immune.
“We working to hold costs down where we can, but ultimately this result is not sustainable if repeated into the future.
“In recent years, we have done our best to absorb much of the inflationary pressures on the sport to date, but we cannot continue to do this and must ensure our sport remains in a strong financial position.
“We have a new CEO, along with other new leaders, who have a clear mandate to deliver organisational sustainability for the longer-term future of the sport.
“Tonight’s member forum will provide members with the opportunity to hear more from the leadership of our sport, as we present our 2023 financial statements, as well as addressing our future strategic direction.
“I encourage everyone to attend if they are available to do so. We will also be taking questions from members through the Q&A function on the night.”
Vohra expressed a similar sentiment.
“We know that results such as this are not sustainable for the sport on an ongoing basis and the bottom line is: we need to significantly improve our bottom line,” Vohra said.
“I can confirm we have put in place new reporting structures and increased financial oversight as we progress through 2024.
“There are a number of working groups and other initiatives already in place to ensure we improve our financial position and reduce our expenses further wherever possible, while also looking at new revenue opportunities.
“Discussions are also underway with our insurers to determine how we can address the significant increases in our premiums and what more can be done to reduce our costs.
“Rising insurance costs are an issue for us, for other motorsport bodies and for sport generally. All options need to be on the table to address this trend.
“As members would be aware, the cost of licences was increased by 15 per cent late last year. This was directly related to the increasing insurance costs we are facing.”
Revenue was up in 2023, from $15.9 million in the prior year to $17.2 million last year. (These figures and below have been rounded for the purpose of this news report)
Employee costs increased by $194,000 or 3.6 percent, but that was less than the CPI, while office expenses dropped $181,000 or 14.7 percent, and consultants/professional fees were slashed by 67 percent or $354,000.
Aside from insurance, communications and travel expenses were also drains on the bottom line.
However, they were outweighed by a $602,000 increase (20.4 percent) in event promotional expenses, with event revenue growing $217,000 (3.5 percent).
Advertising and sponsorship revenue was also a notable hit, dropping by $468,000 from 2022 to 2023.
‘Other revenue’, however, jumped by $899,000, while licence revenue was up $350,000.
See below for profit and loss statement
The balance sheet remains strong for now, with net assets at the conclusion of 2023 of $10.3 million (including $3.4 million in cash and equivalents) versus $11.4 million at the same time in 2022.
Tonight’s online Member Forum starts at 19:30 AEST, with attendees welcome to ask questions of the President or CEO.
Prospective attendees must register to attend, and may do so by CLICKING HERE.
