Cape Town - SA Rugby on
Saturday announced a “satisfactory” operating result for the year ended December 31, 2016, despite reporting a group pre-tax loss of R23.3 million.
The loss was
attributable to a decline in sponsorship revenues, but cost savings meant that
normal operations were unaffected.
maintained its support to the 14 member unions, which increased by 90% to
R336m, principally on the back of increased broadcast income, as group revenues
rose 19.9% to R1.2bn (R997m in 2015).
costs rose 46% to R155m while fees for player image rights and insurance
increased almost fourfold from R23.5 million to R87.3 million.
arrangement secures the image rights of provincial players on behalf of member
unions for their use in marketing and branding campaigns (having previously
only related to national players). The insurance covers all professional
players in the country against temporary and catastrophic injuries.
associated with national teams declined 4% to R197m - attributable to
performance related payments - while delivery of sponsors’ rights costs fell
24% to R125m due to a reduction in the size of the portfolio.
“In a very
difficult economic environment and considering the many challenges to ensure
that we deliver on rugby imperatives, we consider this a satisfactory operating
result.” said Jurie Roux, CEO of SA Rugby.
our support to members and the investment in rugby activities. However, the
loss of R129m in budgeted sponsorship placed pressure on
flow was also negatively impacted by the payment of provisional taxes made to
SARS against an estimated normal taxation charge of R78.7m. The structure of
certain foreign broadcasting rights agreements gave rise to an increased
taxable income that was expected to be recognised over the duration of the new
five-year broadcasting cycle only.”
significant normal taxation charge, against a pre-tax loss of R23.3 million,
resulted in an accounting adjustment to reflect a deferred taxation asset of
R100.4 million compared to the R14 million of the previous year.
investment into grassroots development, women’s rugby, elite player development
at junior level and academies was able to continue however.
that 2017 was unlikely to see an easing of pressure on SA Rugby finances.
retaining sponsorships is now key for 2017 although we will continue to review
our cost base,” he said. “It is likely to be another challenging year if we are
to maintain our current level of support for our members and our other rugby
activities.”The results are
scheduled to be approved at the SA Rugby Annual General Meeting in Cape Town on April 6, 2017.