Finances spell more woe for RFU- 14 Nov 2006 00:00:00
The RFU’s annual financial results showed a 4.5% drop off in turnover to £83m – a worrying decline attributed to the England team’s poor performance on the pitch in the last 12 months.
According to the annual report, seven straight losses on the bounce have cost the RFU £3.6m, mainly due to a decline in ticket sales, reduced merchandise sales, a lower share of Six Nations revenues and the costs of restructuring the Elite Rugby Department.
Operating profits for the year stood at £16m (£23m in 2005) and a loss before tax of £1.7m was incurred (profit of £6.4m in 2005).
Despite the drop-off, which comes only 3 years after the World Cup win, the RFU preferred to concentrate on the positives of the report which showed an increase in funds invested at both the elite and community levels of the sport.
The Elite Rugby investment was raised by £1.7m to £13m and the Community Rugby investment was boosted by £2.9m to £14.1m. In addition the RFU distributed a record £19.6m to their clubs and constituent bodies in the year.
The RFU’s balance sheet also remained strong with net worth increasing to a record £122m (£104m in 2005) and cash balances at £28m (£43.8m in 2005) in spite of a capital spend of £39.2m in the year on the South Stand development at Twickenham.
RFU finance director Nick Eastwood commented: ‘The RFU’s financial position remains healthy with good cash balances and a strong balance sheet. We have long term strategic plans and manage our business accordingly. Turnover and costs inevitably fluctuate from year to year due to changes in the international match programme and the success of the England team but we seek to maintain a constant level of investment in the development of both the elite and community games.’