1. Welcome to Stable Financial

With an exciting racing year upon us, a new dawn is also upon us at Stable Financial.

We are very excited for a number of reasons;
  1. We have two new team members being Gus Contessotto (Supervising Accountant) and Melanie Cotter (Reception/Office Administration) and they have both settled in very well.
  2. We have a new website (see below) www.stablefinancial.com.au
  3. We have a new service offering Stable Advantage, providing structure and accountability to business performance and planning (see below).
  4. We have introduced BankLink for clients (refer autumn 08 newsletter)
  5. We have implemented some changes due to the tremendous response to our client survey (see below).
Our new corporate identity accurately reflects the true nature of our business. It also reflects the outstanding team of equine professionals that we have to assist you with your business. You all play a very important part of our “stable” and we encourage you to introduce more people to our “stable”.
2. Economic sentiment

The first half of 2008 has been economically challenging to say the least. The horse industry will not be immune to the negative results already experienced in stock markets and housing markets across the globe. The connection between the Australian ASX200 and Inglis Easter yearling sales prices are worth noting, as illustrated in the graph below. It will be interesting to see how closely the 2009 yearling sales mirror the fall in the share market.



Leadership
The people within the horse industry are a resilient lot. This was perfectly demonstrated during EI in 2007. During challenging economic times business requires strong leadership. Leadership for the horse industry should come from a number of sources. For breeders, Thoroughbred Breeders Australia (TBA) and its state divisions need to continue to represent all breeders in the pursuit to cleverly promote our breeding product. Trying to attract “fresh” horse industry people to the racetrack and/or to the sale ring is a given. What also needs to happen is a concentrated effort to assist breeders with reducing costs. Lobbying of government for tax concessions should be an important aspect of reducing costs to breeders. Similarly, negotiating with sales companies to manage selling costs to breeders should be pursued.
3. New Service Offering

Stable Financial is very pleased to offer a new service known as “Stable Advantage” (“SA”). “SA” is designed to provide you with greater structure regarding the decision making required in your horse business. “SA” will provide a practical and commercial approach to assist you improve the performance of your horse business. Planning is obviously critical to achieving desired outcomes for your horse business and we have tailored “SA” to coincide with the seasons of a racing and breeding year.

The “SA” service offering will ensure results are monitored against expected performance and provide a unique dynamic as Stable Financial oversees the operations in an independent and unemotional manner. Key features of “SA” include:
  1. A structured program to set goals, monitor, assess, plan and improve performance;
  2. Provision of a support base to assist the operation in a commercial independent and practical manner;
  3. Involvement of key decision makers including bloodstock agents, horse trainers and internal representatives in regular board meetings.
  4. Provision of secretarial services, board room facilities and a serviced office in CBD Melbourne.
The recent decision handed down in the administrative Appeals Tribunal (see link below) has highlighted the need to document the decision making process of your horse business, and the need to keep proper books and records.

Investment in horses is often significant. Stable Financial should be a part of your “team” to assist with managing such an important investment.

We look forward to explaining this new service offering (“SA”) with you in greater detail. For initial enquires please contact either Adam Tims - atims@stablefinancial.com.au or Paul Scanlon - pscanlon@stablefinancial.com.au or phone (03) 9629 3023.
4. Client Survey

The Client survey conducted in June was well received with a large response rate, and as a result of client feedback, the following has been implemented:
  • Introduction of BankLink service. This software provides our firm with an electronic download of your monthly bank statements, greatly reducing the time spent by small businesses on meeting their GST and income tax compliance. The time spent on bookkeeping was the number 1 frustration in clients maintaining their financial records.
  • Introduction of Stable Advantage (see related article for further details). There was a desire from clients for regular analysis of their trading results and they look to our firm for knowledge and horse industry expertise. We believe this service will satisfy this need.
  • Rollout of Service Agreements. Some clients would prefer that a set fee is quoted for work performed. Beginning with the self managed super funds (SMSF), we are in the process of offering service agreements to clients.
  • There was strong interest in training sessions on tax matters and software and it is likely that these will be offered in the medium term.
The winner of the six bottles of premium wine was Maurice and Marie Purcell. Congratulations and thanks to all those clients that responded.
5. New Website

Stable Financial has a new website: www.stablefinancial.com.au

The website has some very interesting content and will continue to evolve. If you have any suggestions for content that you would like to see on the website please let us know at info@stablefinancial.com.au. We take this opportunity to sincerely thank Stu-Art Graphics for their Group 1 performance in building our new website.
6. Finalisation of TR 2008/2

It is a relief that the horse industry now has a final public tax ruling (TR 2008/2); the last such ruling came some 15 years prior. TR 2008/2 provides the taxpayer and their advisors with current guidance as to how the ATO view horses and the tax laws.

To read Adam Tims article published in the 2008 annual edition of Inside Breeding [click here]
7. D’Arcy’s case

The Administrative Appeals Tribunal (“AAT”) in Sydney has affirmed an earlier Australian Taxation Office (“ATO”) decision that a taxpayer (D’Arcy) was NOT carrying on a horse breeding enterprise despite selling 21 of 22 progeny produced, over a period of time.

The worrying aspect of the tribunal’s decision is that racing, often viewed as being the pleasure or hobby component, was not a dominant factor in this case.

To read more on Stable Financial media release 21 August 2008 [click here]
8. Entering the Stockmarket

As you are no doubt aware there has been a significant correction (down 28%) in the Australian equities market since it reached the peak in November 2007. Whilst a fall of this magnitude is difficult to swallow, it is quite a normal part of the equities cycle as was seen in 2006, 2002, 1998,1997 and 1994 and part of the reason why investing in equites should be seen as a long term strategy.

Whilst the temptation for many is to wait until the markets improve before investing, the graph below shows the huge effect that missing the 10 best days over a period of 28 years can have on your returns. Unfortunately we cannot determine when these days are going to happen (although history has shown that this is more likely to occur after a significant downturn in the market.) The message is:



We would suggest that now is a good time to commence a strategy whereby you begin to drip feed money into the market, if you would like to discuss how this can be done whilst providing tax benefits please call our office to take advantage of our offer of a free no obligation consultation with Louise Morris, the Director of our financial services division, Stable Private Clients.