SA Rugby able to deal with the Covid-19 pandemic from a position of strength after posting a post-tax profit of R8.5 million - CEO
SA RUGBY chief executive Jurie Roux says they are able to deal with the Covid-19 from a position of strength after posting a post-tax profit of R8.5 million at the end of 2019.
“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,” said Roux following their annual general meeting on Wednesday.
“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.
“If this crisis had hit us two of three years ago it might have been a very different story.
“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 R1.2 billion 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.”
Roux said operations continued to be funded by way of a bank overdraft for significant parts of the year and solutions had 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 R62 million 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 (R372 million in total) was rewarded with a Rugby World Cup 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% of operating expenditure (R275 million).
“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,” said Roux.
“We reduced the overdraft from R68 million to R7 million, but we have subsequently agreed an increased facility for 2020 to manage the inevitable cashflow issues create by the pandemic.”
Meanwhile, Pat Kuhn and Jannie Louw were elected onto the executive council via electronic ballot for four-year terms and Schalk Liebenberg for a two-year term (the latter filling a vacant position) during the AGM.
Francois Davids was re-elected as deputy president for a four-year term in a contest with Jerry Segwaba.
SA Rugby paid
tribute to long-serving executive members Tobie Titus and Harold Verster.
Verster’s involvement of more than 50 years in rugby came to an end when he stepped down
as managing director of the Free State Cheetahs (Pty) Ltd at the end of May.
Titus, whose career in sport spanned six decades, service officially came to an and at the AGM.