SARU announces Financial results

The South African Rugby Union’s (Saru) draft audited group annual financial statements for the year ended December31, 2007, which include an unqualified audit report, were today circulated to its members, ahead of the formal consideration and adoption of the financial statements at its Annual General Council Meeting here on March 28.


The group income statement for the year reflects a profit before taxation of R31.5 million (USD$3.9m) , after impairment of an amount of R5.0 million against the investment in associates EP Rugby, Border Rugby and Eagles Rugby.


The net profit after tax is R21.2 million, which is substantially better than the R7.8 million earned in the previous year.


With 2007 being a Rugby World Cup year, SA Rugby typically faced an operating loss, due mainly to a reduction in broadcasting revenue and an increase in national team costs, both related to participation in the RWC.


The budgeted loss amounted to R19.4 million, but, through a combination of additional revenues and net savings on a variety of operating expenses, some arising from the fact that the Springboks were crowned RWC 2007 champions, the loss, before the impairment, was limited to only R4.5 million.


However, this loss was more than covered by the R41 million grant payable by the IRB Trust, arising from the profits earned by RWC 2007 in France.


Group reserves totalled R66.5 million at 31 December 2007, which included R41.7 million in cash and short-term deposits.


The improvement in cash reserves is primarily attributable to the R30 million advance payment to SA Rugby by Supersport, on the conclusion of a broadcasting rights contract for domestic competitions and inbound Tests for the period 2011 to 2015, and a R2.8 million reduction in amounts receivable from Provincial Unions, whose indebtedness to SA Rugby at balance sheet date totalled R13.5 million.


Over the last few years, after-tax profit figures achieved were as follows: 2005 (R6.4), 2006 (R7.8) and 2007 (R21.2).


SA Rugby is well on its way to reaching its medium term objective of having cash reserves of R140 million by the end of 2010, with the future showing a budgeted after- tax profit of R15 million for 2008, and something well in excess of that for 2009.


This is against the backdrop of the revenue sharing opportunity, for both SA Rugby and the Provinces that will be presented by the British & Irish Lions tour to South Africa next year.


Given the newly introduced distribution model adopted by the International Rugby Board relating to each Rugby World Cup event, it is likely that SA Rugby’s reserves will receive a further significant boost following RWC 2011 in New Zealand.


SA Rugby is confident that it is well positioned, through its financial and other resources, to grow, transform and successfully compete in the game of rugby at all levels in the short, medium and long term.


Note : At the time of publication the South African Rand was around 8 US Dollars to the Rand.

 

Rugbyweek.com

 

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