SA Rugby posts profit to ‘walk from the burning building intact’
If it had been two or three years ago, it would have been a different story, says chief, but there are still concerns
SA Rugby reported a profit at its AGM on Wednesday, but CEO Jurie Roux conceded that Covid-19-enforced austerity measures would be painful for rugby businesses.
“It will mean that we will walk from the burning building still intact‚” he predicted.
Before the full scope of the coronavirus pandemic becomes clear, SA Rugby reported a post-tax profit of R8.5m for 2019.
It believes strict financial discipline was at the heart of the profit, but admitted that its challenges had been dwarfed by the pandemic.
“The measures that we have implemented in recent years allowed us to deliver a very satisfactory result at the end of 2019.
“We improved our overall solvency and financial position through fully impairing all loans‚ investments or receivables where the recovery of such was in doubt‚” said Roux.
“If this crisis had hit us two or three years ago it might have been a very different story.
“The pandemic has had the effect of tearing up all our approved budgetary plans, but we have taken an aggressive approach to the potential impact of the virus.
“We have agreed our Industry Financial Impact Plan‚ which will cut R1.2bn from the budget of the entire South African rugby industry if required.”
The pandemic threatens to drag SA Rugby back into the financial doldrums of 2016 and 2017, when a struggling Springbok team saw sponsors walk away from the sport.
For 2016 it was R15.7m in the red‚ in 2017 it suffered a R62.4m net loss, before things improved with a R2m profit in 2018.
In SA Rugby’s latest report, revenues increased by 2.5% to R1.29bn (2018: R1.26bn), with increases in broadcasting‚ sponsorship‚ grants‚ insurance proceeds‚ royalties and the Cape Town Sevens event offset by a reduction in Test guarantees due to fewer matches‚ Rugby World Cup performance obligations and the closure of the Springbok Rugby Museum.
Roux said operations continued to be funded by a bank overdraft for significant parts of the year and solutions had to be found to address a number of issues, including the loss of a broadcasting partner‚ budgeted Lottery income that did not materialise‚ further loan impairments and the R62m required to honour player and management performance commitments for winning Rugby World Cup (RWC) 2019.
However‚ the significant RWC obligation was offset by insurance mitigation plans, while the investment in the rugby department (R372m) was rewarded with an RWC victory in Japan.
Financial support for the 14 member unions and player welfare‚ through the use of player imagery and injury insurance‚ accounted for another 32% of operating expenditure (R275m).
In an electronic ballot for positions on the executive council‚ Pat Kuhn and Jannie Louw were elected for four-year terms and Schalk Liebenberg for a two-year term (the latter filling a vacant position).
Francois Davids was re-elected as deputy president for a four-year term, in a contest with Jerry Segwaba.