RECORD PROFITS FOR WRU GROUP

Welsh Rugby Union | Wales & Regions Published 9:31 am 29th Jul 2005 News

Improvements both on and off the field over the past year resulted in the WRU Board of Directors signing off accounts that showed a 5% increase in turnover across the WRU Group for the 12 months ending 31 May, 2005, compared to last year, which was a 13-month period.

As a Group, the WRU and Millennium Stadium plc have both returned pre-tax profits this year with the Group reporting a profit of £3.6 million, which contrasts starkly with a loss of £3.7 million at the end of the 2002 / 2003 financial year.

“The Millennium Stadium and the Welsh Rugby Union have experienced their most successful and productive year in relation to the first phase of both business’ financial strategies,” said WRU chairman David Pickering.

“Welsh rugby was a winner on the field in the 2005 RBS Six Nations, but the good work off the field of everyone involved in our national sport and our national Stadium over the past financial year has helped us to deliver record profits for the Group.”

Looking ahead, David Pickering is fully aware that there is still a lot of work to be done but is confident that with many deals and events already secured for forthcoming seasons, the WRU Group can build on its improved financial performance.

“A lot of hard work in the board room has secured a fantastic deal for Wales for the Rugby World Cup 2007, which should bring in upwards of £8 million to the Millennium Stadium and Welsh Rugby, and we have at least eight high-profile Olympic events at the Millennium Stadium during London 2012,” he said.

“At the Millennium Stadium, we have now established ourselves as a leading venue for all music industry events, attracting the biggest names in the business from the Red Hot Chilli Peppers to U2, REM and now Oasis for a ground-breaking concert for the Christmas period. The incredible Tsunami Relief Cardiff concert last January raised nearly £2 million, directly donated to the DEC appeal for South East Asia, and showed the world what the Millennium Stadium is capable of achieving.

“With the completion and installation of our pioneering curtain concept through co-operation and investment from the Millennium Commission, the Wales Tourist Board and our caterers Letherby and Christopher, we have become a truly versatile, 365 day-a-year events venue and will enable us to attract all kinds of new events from boxing and ice-skating to Arena-style musical concerts of all genres. The curtain means we are now the largest indoor Arena and conferencing centre in Europe.

“A lot of thought, planning, hard work and effort went into addressing the difficulties presented by the Group’s huge debts over the past two years. The refinancing package we agreed with Barclays Bank was 14 months in the making but it has helped to secure the future viability of the Millennium Stadium and the WRU.

“Our strategy of maximising revenues and keeping a firm rein on cost control has paid dividends, with both the WRU and Millennium Stadium reporting dramatic improvements in profitability.

“In addition to the profits, there has been a significant reduction in the Group’s indebtedness – net cash inflow for the year was £8.8 million (compared to an outflow of £0.3 million in 2004) and during the year an £8.2 million overdraft was wiped out.

“The success of the National Team was also a huge catalyst for our financial improvement. There were record attendances and hospitality salesfor both our Autumn Series and Six Nations matches and the Group sold morethan 55% of its new 125th Anniversary Debenture issue in less than four months generating more than £2.5 million.

“Following the successful restructuring of its debt, the Group has also taken the decision to reclassify its long term liabilities (those falling due for payment in more than 15 years time) which has resulted in a year-on-year increase of £55 million in its net asset value. Net assets at May 31, 2005, total £113.5 million.

“Our operating profits have shot up from £2.5 million to £6.8 million due to negotiating one-off deals and ending various disputes with thirdparties.”

With seven home games to look forward to at the Millennium Stadium next season, including three home games in the Six Nations and the mouth watering prospect of showdowns with the three Tri-Nations countries in November, there is every likelihood of an even better financial return over the next 12 months, especially when the rugby portfolio is viewed alongside the growing, global profile of the Millennium Stadium.

“The Millennium Stadium which now has strong links with the Welsh Assembly Government, Cardiff Council and the Wales Tourist Board, has also secured the Heineken Cup Final for May, 2006, beating off strong challenges from French stadia,” added Pickering.

“This is just the beginning of a concerted effort to further reduce our indebtedness. We have made a good start, but more remains to be achieved.

“If we can maximise the financial potential of our seven home fixtures next season, continue to increase the usage of the Millennium Stadium and build on our position on the field as one of the most attractive sides in the world, then I think we can improve even further on all fronts.

“That remains the challenge – those who stand still ultimately fall behind. We’ve been there before and we intend to build on any and every success from top to bottom in our game.

“And with our strong management team of Paul Sergeant, Steve Lewis and Alan Hamer, headed up by Group Chief Executive David Moffett, our business is in very capable hands.”

THE HEADLINE FIGURES

WRU Group

· Turnover up 5% to £32.4m (2004: £30.8m)

· Operating profits of £6.8m (2004:£2.5m) Profit before tax of
£3.6m (2004: loss of £12,000)

· Net cash inflow of £8.8m (2004: outflow of £0.3m)

· Net assets increasing to £113.5m (2004: restated as £58.7m)

· Group cash balances of £0.6m (2004: overdraft of £8.2m)

WRU

· Turnover up 9% to £21.2m (2004: £19.5m)

· Operating profit of £3.5m (2004: loss of £219,000)

· Profit before tax of £3.5m (2004: £0.2m)

Millennium Stadium plc