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However, its statutory operating loss was $19.9 million, and a net loss of $16.4 million after a $3.5 million tax benefit, reports The Australian.
The reason for the red ink was a hefty amount of writedowns, including the $9.6 million ‘Teams Gen-3 payment’ which, as highlighted by Speedcafe last year, had been reported in the 2022 calendar year accounts as a current asset despite there being no prospect of liquidating it.
The one-off items summed to $20.5 million and also included almost $5 million worth of team racing contract and event asset write-offs, and a $6 million “share-based payment reserve”.
RACE last year absorbed one of two former Tickford Racing Teams Racing Charters when the Campbellfield-based squad downsized to two Repco Supercars Championship entries, with another ended up at the Blanchard Racing Team to facilitate its expansion to a full-time multi-car effort.
It is also investing in further Gen3 parity initiatives, such as last off-season’s wind tunnel testing and upcoming transient dynamometer testing, which were welcomed by the paddock but will also have hit the bottom line in the short term.
According to The Australian, RACE is looking to raise tens of millions of dollars from new investors as it pushes to expand the calendar beyond 12 events, the bare minimum under its current television rights contract.
Canberra-based property developer Jure Domazet, one of the existing shareholders, is thought to have injected more capital into the business at some point in 2023.
That would square with a note in the 2022 annual report stating that RACE’s ability to continue as a going concern “is reliant on the ability to raise additional funds from investors to meet ongoing cash requirements and to comply with debt covenants that underpin ongoing support from lenders.”
RACE Chairman Barclay Nettlefold said in last week’s results announcement, “The 2023 accounts demonstrate the underlying strength of Supercars in terms of revenue and earnings.
“They also reflect a year of investment for the future. A number of strategic investments were made in 2023 to grow the business including a new website and app, a new membership programme, enhancing the quality of our events, and the continued investment in the Gen3 platform.
“At the same time, a significant number of commercial partnership renewals were secured during the year.
“Across 2023, RACE and Supercars achieved solid financial results and made substantial progress towards our long-term objectives.
“We are committed to implementing further strategic investments and initiatives to build on the successes of 2023 and we anticipate continued growth in 2024 and beyond, including the possibility of expanding the sport to international races outside of Australia and New Zealand.”
However, it also noted that significant risk remained within the business.
Clearly, RACE will be hoping to not make any more substantial writedowns, while also moving towards something of a consolidation phase in the business after years of investment in Gen3.
Crucial to financial performance in future years will be a new television deal given the current agreement, which expires at the end of next year, represented its second biggest revenue line item in 2022 ($31.2 million in ‘broadcast revenue’).
