Springboks World Cup win helps SA Rugby report tiny post-tax profit of R8.5m (£400k)

SA Rugby boss Jurie Roux has claimed that his country’s rugby administration would have been ruined had the financially devastating coronavirus pandemic struck three years ago. He claimed at Wednesday’s AGM that good accounting in recent years - along with the 2019 World Cup triumph by the Springboks - saved them from oblivion. 

“If this crisis had hit us two of three years ago it might have been a very different story,” said the chief executive. “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. It will be painful to endure for all rugby businesses, but it will mean that we will walk from the burning building still intact.

“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.

“That meant that when the crisis struck our improved financial position allowed us the required time to formulate corrective measures to address the financial challenges unencumbered by any underlying weakness that could have worsened what is an extremely threatening situation.

SA Rugby reported a post-tax profit of R8.5m (£400k) at the end of 2019. Revenues increased by 2.5 per cent to R1.29bn (2018 - R1.26bn) with increases in broadcasting, sponsorship, grants, insurance proceeds, royalties and the HSBC Cape Town Sevens event offset by a reduction in guarantees due to fewer Test matches, Rugby World Cup performance obligations and the closure of the Springbok Experience 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 RWC 2019.

However, the significant RWC 2019 obligation was offset by insurance mitigation plans while the investment in the rugby department (R372m in total) was rewarded with a 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 per cent of operating expenditure (R275m).

Roux added: “One of the benefits of our approach is that we go into this crisis with a level of comfort that we can expect the financial support of our bank and key stakeholders in these difficult times.

“We reduced the overdraft from R68m to R7m but we have subsequently agreed an increased facility for 2020 to manage the inevitable cashflow issues create by the pandemic.”

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.

In other business, accepted into associate membership of the South African Rugby Union were: the South African Rugby Referees’ Association; the South African National Department of Correctional Services Rugby Association and the South African National Police Services Rugby Association.