The WRU Annual Report 2015 is available to view here: http://tinyurl.com/ouketdf
This record turnover allowed the WRU Group allocate £22.6m into the game at all levels in Wales, in order to further the Group’s primary objective of promoting, fostering encouraging, controlling and improving the game throughout Wales. These allocations included £4.0m into the community game, £1.4m into the Premiership and £17.2m into Regional Rugby.
These amounts are supported by spending on operating costs which stood at £4.3m for the elite game, £2.8m for community rugby and £5.4m for the Millennium Stadium. The total investment into community rugby was £6.8m.
During the year the WRU Group invested £3.2m on capital projects at the Millennium Stadium, including the procurement of the new Desso pitch and Terraplas cover. The Desso pitch has already shown a significant performance improvement compared to the previous palletised system, whilst the Terraplas cover ensures the Stadium can continue to host non-pitch events and ensuring it remains a truly multipurpose venue.
The WRU Group’s loan facilities with Barclays Bank plc were refinanced during the year. As part of the overall commercial arrangements of this deal the £10m Tranche C loan, that was only repayable under certain circumstances, was released in exchange for one share in Millennium Stadium plc. This resulted in an exceptional £10.0m gain which is a non-cash transaction.
Following this refinance, the Group’s net bank debt at the end of the financial year reduced to £14.2m, including a new loan facility for the Regions of £1.3m. If the loan facility for the Regions is excluded, the WRU Group reduced its net repayable bank debt by £2.0m.
The Annual Report shows that the EBITDA – which represents earnings before exceptional items, depreciation, amortisation and allocations to affiliated organisations – was a record £30.3m. A pre-exceptional profit after tax of £2.3m was posted for the year, of which £2.1m is retained by the Group and the balance of £0.2m represents amounts due to the minority shareholder in MSEL. The WRU Group’s post exceptional profit after tax for the year was £12.3m, reflecting the £10m debt for equity exchange arising from the refinancing, which gave rise to a non-cash exceptional credit.
A re-investment highlight of the year was the decision to continue to invest in facilities grants with £650,000 made available for the community game across Wales. This investment goes directly to clubs for improvement projects ranging from pitch facilities to clubhouse refurbishments.
Following a comprehensive rugby review, 43 School Club Hubs were established, which sees the Group directly funding schools appointed officers focused on rugby teaching skills.
This initiative has resulted in significant increases in the number of teams, players and games played across both genders. It was decided to increase the number of officers to more than 80 by September 2015.
During the year the WRU Group concluded a new six year Rugby Services Agreement (“RSA”) with the four Welsh Regions. The WRU Group has guaranteed over £60m of direct funding to the four Regions, in addition to them receiving all of the associated income generated from the competitions in which they play. In return the Regions have agreed to deliver a range of rugby services to the Group. At the heart of this agreement are National Dual Contracts and so far twelve players have been contracted. In addition, the WRU Group have provided loan agreements to the Regions of up to £3.6m of which £1.3m was drawn as at the year end.
Other highlights within the year included:
– The introduction of a new concussion protocol for the community game around a Recognise and Remove policy
– The appointment of a new National Women’s Rugby Manager with a remit to expand the women’s game
– A decision to increase the Principality Premiership Division to a sixteen team format from season 2016/17 and to launch a new Premiership Division cup competition from season 2015/16
– The conclusion of a wide-ranging review which confirmed the new format for the SSE SWALEC National Leagues
The Group Chief Executive, Roger Lewis, said: “I am delighted to be able to announce such a strong financial position before I step aside from my role within the Group.
“The past year has yet again proved that our success is based on detailed planning aligned to a clear strategy and a focus and commitment on achieving success.
“I am particularly delighted that the restructuring of our loan arrangements shows that Barclays Bank plc clearly trusts our ability to operate at a level of corporate integrity and professionalism which they can align to.
“The new relationship with the Regions and the introduction of National Dual Contracts for the first time in our history shows that Welsh rugby is focused on creating meaningful and long term success at all levels.
“The success of the new Club Hub Officers in our schools and the introduction of a new National Women’s Rugby Manager show we are committed to building strong foundations for our game.
The Group Chairman, Gareth Davies, said: ”The financial results for the last year are a credit to everyone involved in Welsh rugby.
“We operate within an extremely competitive environment, but we are maintaining a level of turnover and financial return which enables us to continue re-investing funds where they are needed to grow the game in Wales and support our primary objective.
“Throughout the year we have continued to work towards the evolution of our game with important changes announced at the Principality Premiership level and increased investment in our School Club Hub initiative.
“I want to thank our Executive, the Board and all our club officials, players, coaches and volunteers for the unstinting hard work and dedication they all have for Welsh rugby.
“I also want to thank Roger Lewis for all he has done in his nine years as Group Chief Executive and I know we all want to wish his successor, Martyn Phillips, good luck for the future.”
The Group Finance Director, Steve Phillips, said: ”I am pleased to be able to report that our financial performance is again robust enough to increase our level of re-investment into Welsh rugby.
“Although our business is cyclical, in that it is based on a formula of fixtures planned well in advance, we have proved capable of managing our finances accordingly.
“There is a sense of confidence in the Group based on our recent performances and I am delighted that level of support has helped us achieve a new loan facility arrangement with our bankers, Barclays Bank plc. This has given us improved flexibility and I am extremely grateful for their support in achieving this important change.
“I am also delighted that we concluded the formation of MSEL with Compass Group UK & Ireland which delivers the hospitality and catering operation of the WRU Group. This should serve the WRU Group well in the future.
“Our objective, as always, has been to maintain a robust level of re-investment into rugby at all levels in Wales and it is pleasing that we have again fully achieved that aim.
“I am particularly pleased that we were able to announce a new one-off facilities grant of £650,000 to help our community clubs invest in improvements which will help them attract more support for rugby at the grassroots level.”
