Scottish Rugby has disclosed its financial figures for the 2005-06 season.

In its annual report, received today by all full member clubs, the headline financial figures show turnover has increased, costs have remained static and core bank debt remains at £23 million.

The governing body’s nine previously complex financial ledgers created considerable difficulties in establishing full control over income and expenditure. However, they have now been replaced by one, clear, ledger structure and from the start of the new financial year in May, much greater control over trading activities and the balance sheet have been achieved.

Most of this past 2005-06 year has not had the benefit of these improved financial structures and a loss of £0.4m has been incurred. This compares to a loss of £2.2m in 2004-05, helped partly by a reduction in the costs of running international professional rugby.

When considering the overall balance sheet, after adjusting for bank borrowings, Scottish Rugby’s overall net worth at April 2006 remained at approximately £20m.

This figure is calculated from fixed assets of £41m (primarily Murrayfield Stadium), less bank borrowings of £21m, as at April 2006.
Gordon McKie, Chief Executive of Scottish Rugby, accepted that a key priority for the sport is to address the core bank debt and put an end to the Union making a loss in eight of the last ten years.
“Scottish Rugby is now addressing its considerable financial problems, through much improved financial processes and greater accountability throughout the entire governing body. Clearly, there is a long way to go but we now have a firm hand on the whole financial process.
“We recognize there have been total net losses in the last five years and ten years amounting to £10.9m and £18.9m respectively but we are able to assure our stakeholders we are now on the right road to changing this.
“Much has been achieved in financial terms to ensure, going forward, Scottish Rugby has a tighter control of its financial operations.

Eamon Hegarty, Scottish Rugby Finance Director and a member of the Scottish Rugby Board, commented, “The new finance systems, providing better quality management information, will allow us to ensure that we begin to manage our debt and move forward more effectively.

“The management team now have the tools to drive forward the business, to maximise all income streams and control our expenditure, to ensure that Scottish Rugby gets value for money and we actively manage expenditure in all areas.”

“The Board remains determined to reduce the burden of debt at the earliest opportunity, as servicing the level of debt we have at the moment is deflecting valuable cash resources away from the game.

“We are now in the process of consolidation and have control over the financial management of our business, which will enable Scottish Rugby to move towards a more stable position in the near future.”

The financial statements will be presented to the sport’s member clubs at a Financial General Meeting on 27th August.

This article was posted on 13-Aug-2006, 22:25 by Hugh Barrow.