Melbourne Racing Club contributes $1.136 billion to Victorian economy

The Melbourne Racing Club (MRC) yesterday released an economic contribution report that shows that the club generated some $1.136 billion and 4,388 jobs for the Victorian economy in 2013/14.

Prepared by Ernst & Young, the report found that the MRC contributed to the Victorian economy by generating:

• $402 million direct output;
• $145 million direct value added; and
• 1,837 direct jobs.

This direct contribution generated flow-on impacts for the Victorian economy, consisting of:

• $1.136 billion combined direct and indirect output;
• $471 million combined direct and indirect value added; and
• 4,388 combined direct and indirect jobs.

This economic activity was generated by the club in several areas of its operations, with horse racing related activities comprising 40% of activity, along with its gaming venues (34%), other functions and events (22%) and capital expenditure (4%).

The report follows a study into the size and scope of the racing industry in Victoria, released by the State Government in May, which revealed that the thoroughbred racing industry in its entirety generated $2.1 billion for the Victorian economy.

“The Ernst & Young report highlights the size of the Melbourne Racing Club and its importance to the community, the racing industry and the Victorian economy, particularly since the business broadened beyond traditional racing-related revenue streams throughout the past five years,” MRC Chairman, Mike Symons, said.

“That more than two million people visited our venues in 2013/14, where we hosted almost 500 events, is a substantial figure, let alone the number of people, beyond 4,000, employed either directly or indirectly by the club.

“That includes the 100-plus trainers and 1,000-plus horses, plus countless vets, farriers, stable and track staff that call MRC venues either home or work.

“The scale of our business is extensive, essential to the prosperity of the racing industry in Victoria, a significant contributor to the community and Victorian economy, and growing.”

The Ernst & Young Economic contribution of the Melbourne Racing Club is attached, and available online here.

Melbourne Racing Club 2013/14 annual report presented

The Ernst & Young report follows the release of the MRC’s 2013/14 annual report, which was presented at the club’s annual general meeting last month. It depicts a strong financial position and positive outlook for the club.

The report shows that the club’s EBITDA increased by over 30%, to $23 million, in 2014. This was driven by a successful productivity review program initiated over the year and the continuing profitability of its gaming venue subsidiaries. Profit after tax almost doubled, to $5.8 million, leading to an increase in net assets to $408 million.

The Caulfield Village property development project also continues to proceed positively, with planning for the various stages continuing, and approval and sales processes underway. The club is carrying the $15 million in revenue generated from the development in 2013/14 in advance which will be taken to the income statement in coming years.

Mr Symons described the result as continued evidence of the success of the club’s non-racing investments into long-term, sustainable income streams, which would filter directly into the club’s core business and members.

“The strong performances of our non-racing annuity streams are now enabling us to reinvest in our core product of racing, our members, facilities and food and beverage offerings at our three premier racing venues, for which masterplanning is underway,” Symons said.

“The club boasts a strong balance sheet and cash flows for which we expect further growth throughout the current financial year and beyond. This will then materialise into capital projects, services to members and racing industry participants.”

Mr Symons was one of three incumbent members to be re-elected to the club Committee, which was also revealed at the meeting, joined by Vice Chairman Peter Le Grand, and Domenic Romanelli.

The Melbourne Racing Club 2013-14 annual report is available online here.