SA Rugby in profit, but not yet out of woods

While his organisation reported a profit at their annual general meeting on Wednesday‚ SA Rugby CEO Jurie Roux conceded Covid-19 enforced austerity measures will be painful for all rugby businesses.

“It will mean that we will walk from the burning building still intact‚” he said.

SA Rugby reported a post-tax profit of R8.5m for 2019.

They believe strict financial discipline was at the heart of the profit but admitted their challenges have been dwarfed by the pandemic.

“The measures that we have implemented in recent years allowed us to deliver a very satisfactory result.

“We improved our overall solvency and financial position through fully impairing all loans‚ investments or receivables where the recovery of such was in doubt‚” Roux said.

“If this crisis had hit us two of 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 they were R15.7m in the red‚ in 2017 they suffered a R62.4m net loss before things improved with a R2m profit for 2018.

In their 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 way of 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 World Cup 2019.

However‚ the significant World Cup 2019 obligation was offset by insurance mitigation plans.