Finances Spell More Woe For RFU

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.’