Historical financials show V8 Supercars owner got off to a shaky start
V8 Supercars owner, Racing Australia Consolidated Enterprises, was likely reliant on its owners tipping in more money to stay afloat, first financial records show.
The operator of the Supercars racing competition booked a $2.7m loss in its first 15 months of operations and was likely reliant on its owners tipping in more money to stay afloat, documents lodged with the corporate regulator show.
The 2022 financial accounts for Racing Australia Consolidated Enterprises (RACE) show that the organisation turned over $112.5m in the 15 months to the end of 2022, booking a $2.7m loss in the process.
The reporting period covered 15 months due to the creation of the company in September 2021, with the company then acquiring V8 Supercars Holdings and its subsidiaries.
Given the entity was a new business, no comparison with previous trading periods was published.
RACE’s current liabilities exceeded its current assets by $4.9m, with a current asset deficit a key indicator of financial distress.
The company flagged this in its financial statements, saying the directors, including former V8 champion Mark Skaife and former QSM Media boss Barclay Nettlefold, had a plan in place to ensure the company could continue to operate.
“The directors of the company have reviewed a detailed cash flow forecast showing the projected cash reserves and are confident that they will be able to operate as a going concern,’’ the financial report says.
“However, this 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.
“This creates a material uncertainty that may cast a significant doubt as to whether the group will continue as a going concern and therefore, whether it will settle its liabilities and commitments in the normal course of business.’’
The organisation's main revenue source for the 15 month period was sponsorships, coming in at $34.7m, followed by broadcast revenue at $31.2m, with “other race related income” accounting for $17.1m.
Ticket income was $12.7m while corporate hospitality income was $9m.
The Australian reported in July last year that the RACE ownership consortium rejected a buyout offer at that time from European media and entertainment business FanTech.
It is understood that offer included buying out shareholders, taking on $45m in debt and the obligation to pay Supercars team owners about $17m annually calculated on a per-car basis.
The RACE board rejected the FanTech offer, and in a statement at the time, Mr Nettlefold said RACE “has received a number of unsolicited approaches”, but did not comment directly on the FanTech offer.
RACE bought Supercars in November 2021 from Archer Capital, which had owned 60 per cent of the series for more than a decade, in a $58.1m transaction.
The 2022 financials show $42.3m in debt owed to Equity Trustees and $5.8m worth of “other facilities’’.
It was rumoured in August this year that the billionaire Shahin brothers Sam and Yasser, who own The Bend racetrack in South Australia, were in talks to buy the Supercars competition, however Supercars said at the time the business had not been sold.
“Supercars has not been sold and is still owned by RACE,’’ Supercars owner Racing Australia Consolidated Enterprises (RACE) said.
“If Supercars were to be sold or discussions of that nature were taking place, it would be communicated to fans by Supercars.’’
The Shahins agreed to sell their OTR petrol and convenience business to Viva Energy for $1.15bn in a deal announced in April, with that deal still yet to be signed of by the Australian Competition and Consumer Commission.
Both Yasser and Sam Shahin are accomplished competitive drivers in their own right, and the family has invested well over $100m into the world class motorsport facilities at The Bend at Tailem Bend southeast of Adelaide. The Bend boasts the second longest permanent circuit in the world after Germany’s Nurburgring, and has played host to events such as the Asian Le Mans series and Supercars itself.
Supercars has been contacted for comment.
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